Recent weeks have brought a raft of estimates and forecasts for UK advertising spending in 2010 and 2011. For digital media, the news is excellent; for traditional channels, more sobering.

Spending on internet ads grew 10% in the first half of 2010, the UK’s Internet Advertising Bureau (IAB) declared in October. As reported by MediaTel, online spending came to almost £1.97 billion ($3.09 billion), or 24.3% of all UK advertising during the period.

According to the IAB, online display returned to healthy growth in H1 2010, with spending of £381 million ($598 million)—a rise of 6.4% compared to the first half of 2009. Banner ads accounted for 72% of the display market, or £272 million ($427 million), while pre- and post-roll video ads shot up to £20.7 million ($32.5 million), and display placements on social media sites contributed around £41 million ($64 million).

Display ad impressions (excluding video) rose even more steeply than spending between Q3 2009 and one year later, to judge by figures from comScore Ad Metrix. This suggests that advertisers were getting much better value for their display budgets in 2010, which doubtless encouraged more committed spending.

Classified ads also staged a comeback in 2010, the IAB reported, climbing 11.4% to £379 million ($595 million) during the first half of the year. Paid search marketing rose by 8.9%, to claim 59.9% of all online ad spending, or just over £1,180 million ($1,853 million).

The IAB saw the double-digit rise in online ad spending as part of a more general recovery; by its calculations, total UK ad spending reached £8.1 million ($12.7 million) in H1 2010, 6.3% higher than spending in the first half of 2009.

The Bellwether report, issued by the Institute of Practitioners in Advertising (IPA) and accountancy firm BDO LLP, was less upbeat, noting that the ad budgets of UK marketers rose by an average 0.5% in Q3 2010—a marginal gain, though a welcome contrast to the 4.6% fall registered in Q2.

Like the IAB, the IPA found that the internet delivered the outstanding success stories, with spending on search up 9.9% in Q3 2010, and display spending up 13.3% compared with the previous quarter.

The IPA did point out that most of the 300 or so firms polled for the report were less optimistic about the financial prospects for their industries than in Q2. Moreover, the report’s author ventured that the strong economic performance in Q2 “likely marked the peak of the recovery cycle.”

Looking ahead to 2011, the latest Consensus Forecast from the World Advertising Research Centre (WARC) projected that worldwide ad spending will rise by 4.5%, following a gain of 4.4% in 2010.

Most of that growth will be driven by emerging markets, such as Brazil (where ad spending is predicted to leap 11.4% in 2011), China (13%), India (14%) and Russia (16.3%)

The UK and most other major European countries can expect minor gains by comparison. UK ad spending will rise 2.7% in 2011, said WARC, or just over half the 5% growth anticipated for 2010.

France and Germany will see 2% growth in total ad spending, while Spain will register a gain of 2.2%, after a decline of roughly 1% in 2010.

Globally, WARC foresaw average 2011 increases in Internet ad revenues (13%) far outpacing growth rates in traditional media (5.2% in TV, for example).

The UK, long a leader in internet advertising, will show the lowest growth rates, according to WARC. But even then, online ad spending will be an estimated 6.2% higher in 2011 than in 2010.

Most recently, key companies in the WPP Group, including agencies Ogilvy & Mather and Mindshare, raised their overall forecasts for revenue growth in 2011. According to CEO Sir Martin Sorrell, the revisions were based in part on WPP’s own 4.5% growth between January and October 2010. Group companies had earlier suggested that they anticipated expansion of between 3% and 4% in 2011.

Where does this leave UK ad spending, and online ad spending in particular? Some key aspects to keep in mind:

1. The economic situation remains volatile. In the past week alone, the UK has been buffeted first by news of another national financial bail-out in Ireland (the UK’s number one trading partner) and then by claims that the economy grew by 0.8% in the third quarter, and that spending cuts by the Conservative/ Liberal Democrat coalition government will not have as drastic an effect on public sector jobs as previously feared. The arrival of good and bad economic news in quick succession has been a hallmark of 2010, and looks set to continue as 2011 approaches. This uncertainty will weigh on advertisers, but most have little choice but to maintain spending at or above current levels. After the declines of 2009, further trimming might affect their market shares.

2. For the moment, the consumer mood is largely positive, buoyed by the prospect of Christmas. Many high street retailers—and several online players, including Amazon—are already offering mark-downs, and sales are healthy in many sectors. In the week ending November 13, the John Lewis group recorded sales of £76.93 million ($120.78 million), up 11.5% on the previous week, and 6.8% higher than the corresponding week of 2009. January may bring a less happy mood, however, as the holiday spirit recedes, some jobs are in jeopardy and value-added tax on most purchases goes up to 20%.

3. While growth in total ad spending may languish in the low single digits, there is little doubt that digital will again outpace traditional media, as in 2009 and 2010. Industry observers are unanimous in predicting that display (driven by sharply higher spending on video ads and social media placements) will gain further momentum, while paid search also thrives and mobile marketing moves up a gear.

A new forecast from the Online-Vermarkterkreis (OVK) sees spending on Internet display advertising rising between 8% and 9% in Germany during 2010. The OVK noted that interest in a range of display formats, including video and banners, has been growing faster than expected since the beginning of the year, prompting it to revise its predictions upward.

Advertisers were also more willing to invest than last year, said the OVK, now that the worst of the global economic crisis appears to be over.

Further rises in Germany’s online population are also encouraging marketers to boost their Internet presence. The most recent edition of “Internet Facts” prepared by the Arbeitsgemeinschaft Online Forschung (AGOF) reported that 49.7 million residents had been online in Q1 2010. 

Men still dominate online, accounting for 53.7% of Web users in Germany. The direct correlation between youth and Internet use remains too; 97% of individuals ages 14 to 19 were estimated to be online in Q1 2010, compared to 71% of those ages 50 to 59. These figures are unchanged from Q4 2009.

Interestingly, 35.2 million people in Germany were estimated to go online only or primarily for private reasons, and did not use the Net for work. Almost 64% of respondents said they regularly shopped or bought items online – roughly the same number who said they used the Web to follow world news.

Detailed results from “Internet Facts 2010 – I” are available here.

Online shoppers in Germany spent roughly €15.5 billion ($21.5 billion, at average 2009 exchange rates) last year, according to recent data from GfK’s WebScope Panel. That marks an annual rise of 14%—well below the 19% growth rate in 2008, but distinctly positive given the difficult economic conditions.

The average expenditure per online buyer in Germany rose by 10% in 2009, to €506 ($703), though the number of purchases, on average, remained constant at 9.4 per year.

Of the non-food product categories monitored by GfK, clothing and fashion showed the greatest gain (24.5%) since 2008. Sales of electronics were up 12.3%, and sales of durables (such as furniture, toys, books and household goods) grew 11.5%.

So far, expectations for growth in 2010 are modest—though e-commerce should continue to perform more robustly than offline sales. Consumer confidence in Germany fell marginally (0.1%) in February 2010, according to GfK’s monthly assessment, and a similar slippage is expected in March. The German economy is beginning to pick up steam again, but prospects of further job losses and wage constraints due to lingering effects of the financial crisis are weighing on consumers.

GfK’s WebScope Panel research is based on a nationally representative sampling of 10,000 Internet users ages 14 and older. GfK has surveyed online buying habits in Germany continuously since 2001.