In the run up to last Christmas, viral marketing was a popular advertising strategy used by a number of high street chains. Several circulated e-mails containing discount vouchers or promotions were generated with the hope they would be forwarded to friends, so creating an advertising chain letter e-mailed the length and breadth of the country.

In 2005, online shoppers in the UK were reported to have spent approximately £4.98bn during the Christmas period and a total of £8.2bn throughout the course of the year.

These figures demonstrate the enormous potential of the online market and the sizeable opportunity for businesses to take advantage of cheap and effective advertising through this medium.

Strategy or slip-up?

Threshers Wine group made headlines when a voucher offering a discount was circulated by e-mail to hundreds of thousands of people.

The Threshers 40 per cent off voucher was allegedly only ever intended for a small target of existing customers and their contacts. However, there were apparently over 800,000 downloads in a couple of days resulting in the Threshers website crashing.

Speculation about the motivation of the campaign is divided - some think it was a careful and strategic plan devised to raise Threshers' profile which was achieved by the national headlines. Other, less cynical spectators, have considered it a marketing disaster with Threshers being backed into a corner and promising to honour all vouchers validly presented to save its reputation in the market.

We will have to wait for Threshers' end of year accounts to be published to reveal the actual impact of the Christmas promotion.

Making the advertisement - wording your offer We can learn some valuable lessons from the Threshers incident and all businesses that intend to promote themselves on the Internet and implement viral marketing strategies need to ensure campaigns are carefully considered and controlled.

Drafting precise wording and a well thought-out strategy which takes account of risks may help avoid some of the pitfalls associated with such advertising techniques.

Developments in technology have meant rapid transfer of information and it is imperative to ensure any promotion or offer made has watertight terms and conditions attached.

This allows businesses to restrict the offer and limit its scope, for example by focusing on a particular store, target group or country or a specific amount of goods or services each customer is entitled to. A business may also target particular stock the offer applies to and qualify the voucher with the phrase "while stocks last".

When placing any advertisement for your business on the Internet, appropriate security measures should be implemented to prevent users altering your offer/advertisement before forwarding it on.

The MasterCard "priceless" campaign fell victim to this when official photos were altered by Internet pranksters. Although many of the "new" photos were considered amusing, some caused offence and this ultimately resulted in damage to the MasterCard brand.

It is important to ensure an advertisement is secure, cannot be easily altered and that there is a link back to your business website to ensure the correct offer or official advertisement is readily available.

Sending out e-mails - the law on direct marketing There are a number of regulations in force governing the sending and storage of e-mails for marketing purposes. The law is specifically designed to protect individuals. A business may not transmit unsolicited communications to individuals for the purposes of direct marketing unless the recipient has given their consent or the sender has obtained the contact details in the course of another sale to that recipient.

Also, all such e-mails must contain the identity of the person/company who is holding his data and the purpose for which that data is intended.

All such e-mails must include a simple means of refusing the use of his or her contact details for the purposes of such direct marketing, both at the time that the details were initially collected, and at the time of each communication.

Where a business sends marketing e-mails to individuals at their workplace without the recipient's prior consent, they must relate specifically to the nature of their business to avoid breaching privacy laws.

All businesses should also note that where they hold personal data or e-mail addresses of individuals they must comply with eight principles set out by the Information Commissioner, which make sure that personal information is: l Fairly and lawfully processed l Processed for limited purposes l Adequate, relevant and not excessive l Accurate and up to date l Not kept for longer than is necessary l Processed in line with your rights l Secure l Not transferred to other countries without adequate protection.

To get around the limitations of direct marketing which demands individual consent, businesses are attempting to make Internet users spread the word about their goods or services.This technique is not illegal if it is correctly implemented, but there is significant potential to stray into problems with privacy laws.

There are practical tips to consider when using viral marketing for advertising: l Do not offer an incentive to people for telling a friend. - you may be viewed as the instigator of the e-mail and this would be illegal as the recipient must consent to receiving marketing material from you.

l In all communications put a consent statement in an obvious position.

l Make sure friends' are clear about how your business obtained their e-mail address.

l Once the friend has been sent the message from your business, do not collect or save any data on them unless they contact you and give you permission.

Ultimately, careful consideration should be given to all elements of any online advertisement campaign to ensure your business and brand is protected from abuse from competitors or customers and complies with relevant legislation.

n Contact: Michelle Breen, michelle.breen@morgan-cole.com