Advertisers keen to appeal to consumers who complain of 'information overload' and instead look to friends and family for brand recommendations, are cautioned over the potential pitfalls of viral and word-of-mouth marketing.

A new report, Viral and Word of Mouth Marketing, from market analyst Datamonitor warns that over-reliance on the internet or consumers to spread the word may "backfire and result in a disastrous outcome." It also claims that: "bad news travels quicker than good news."

As an example, the report cites the Mastercard Priceless advertising campaign of a few years ago, which was parodied by internet users linking obscene images to the company.

Although Datamonitor analyst Daniel Bone warns that in viral and word-of-mouth advertising "it is predominantly the users and not the advertisers who are in control", the report nevertheless stresses the advantages of the marketing technique and explains how best to exploit it.

Young consumers are described as most amenable to peer-group recommendations, while women are more likely to give an opinion on a product. Combining humour and mystery is also suggested to get the message across.

Budweiser's Budvar beer is highlighted in the report as one of the success stories of viral and word of mouth advertising. Its healthy sales growth of 40% during 2003 was described as being due almost entirely to verbal communications.

For further information on the report click here.

Data sourced from: Media Week (UK); additional content by WARC staff