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The web is a great medium for building brands and corporate reputations.

But, as a growing number of companies have been finding out, it is also the mass medium in which brands can most easily be attacked and damaged.

The recent 'anti-capitalist' demonstrations on the streets of London have highlighted the fact that there is a small, but well-organised, minority of activists prepared to take direct action against big business.

While the violence and vandalism of 'guerrilla gardening' grabs the headlines, cyber-attacks on corporate interests tend to have a much lower profile, but might be even more dangerous in terms of undermining the credibility of a brand. Public claims about unethical corporate behaviour or doubts raised about product safety can have a negative impact on consumers' perceptions if they are not speedily addressed - even if there is no factual substance to the criticism.

Ericsson, McDonald's, KFC, Red Bull, Procter & Gamble, Nike, Nestle, Chase Manhattan, Wal-Mart and Ford are just a handful of the corporations that have had to deal with attacks on their business practices or products through digital media. Some like KFC, Ericsson and Red Bull (see panels, pp36 and 37) have been the victim of malicious email hoaxes. Others have seen web sites specifically created to protest at their activities by groups nursing grievances or holding strong beliefs that certain business practices are unacceptable.

The now famous McSpotlight site is a thorn in McDonald's side and Chase Manhattan has to endure the indignity of the Chase Bank Sucks site on which an animated figure urinates on the bank's logo and complaints are orchestrated. On other sites, the safety of certain Ford trucks is called into question; Nike is hauled over the coals with regard to its third- world manufacturing policies; and consumers are urged to boycott all Nestle products because of the way in which the group markets baby milk formula in developing countries.

"In my opinion, the internet will completely redefine the nature of relationships between companies and consumers," says Mark Bunting, head of consulting at online reputation management consultancy Infonic. "It's levelled the communications playing field - these days, a company's voice is no louder than those of its critics, and often what its critics say has a lot more credibility.

"Increasingly, activists, NGOs, journalists, consumers, employees and former employees can all talk directly to one another on the internet and the safe-but-bland voice of the corporate PR machine is simply left out of the conversation. In this context, most companies are vulnerable on one issue or another, regardless of whether or not their business practices genuinely deserve inspection."

Fast food chain KFC, for example, had to react quickly when it emerged in January that an email containing untrue allegations about its production processes was doing the rounds. The defamatory email claimed that KFC was cutting its costs by breeding poultry with no beaks, feet, feathers or bones. As concerned consumers began getting in touch with the company, it moved swiftly to scotch the falsehoods and protect its reputation.

A detailed rebuttal was put up on its site and an email reply vigorously refuting the allegations was quickly dispatched to those consumers that had emailed the company in order to bring the matter to its attention.

Moreover, KFC and its PR agency Freud Communications decided that all "points of access" to the company had to be informed of the problem, so that it would not get out of control. Restaurant staff and the head-office customer service team were briefed so that they could deal with the issue if it was brought up by consumers. Additionally, Freud worked with The Mirror newspaper to put a positive spin on the story, with a view to killing it off once and for all.

Freud also made sure that there was a strong, positive brand message in statements about the incident. Specifically, it was made clear that KFC's chickens are reared in a traditional environment with no use of "genetic manipulation" or artificial nutrients. KFC survived the crisis with its reputation intact, but Freud director Oliver Wheeler cautions that other companies might be vulnerable to onslaughts via digital media.

"The UK hasn't yet got to the point where we dismiss e-myths in the same way that we dismiss pub gossip. We're not culturally there yet," he says.

"Maybe that's because we're a nation in love with gossip, which is why we have tabloids that write nonsense every day and magazines like Hello! and OK."

Yet it is easy to see why many members of the public are susceptible to such "e-myths". If viral marketing on the internet can be a highly persuasive communications tool, it is foolish to suppose that viral mischief-making will not have as powerful an impact, especially when the claims being made seem plausible.

"One actually does find oneself believing some of the stuff that is being passed on by word-of-email, as it were," admits Anton Rush, managing director of The Zebra Consultancy. "There is a certain credibility that comes from something that is sent on by friends, relatives and colleagues."

"We all know how quickly email jokes can spread through a web of friends and colleagues," adds Firefly Communications director Kieran Moore. "One recent rumour - supposedly emanating from the BBC - said that the Queen Mother had died. Within an hour, there can't have been many people working in the City or in the media who did not have this gossip arriving in their in-box."

Prudent companies will look to identify, monitor and respond to online threats to their reputations. Hoping that problems will just go away is not a solution, says Infonic's Bunting. Once opposition has begun to build on the net, it can be very hard to contain.

Monitoring chat rooms enables organisations to keep up-to-date with developing issues and changes in public opinion. Web sites such as Deja News - which provides access to, and enables the searching of, content in 35,000 Usenet newsgroups and 18,000 proprietary discussion forums - makes searching the internet for discussion on a particular topic or corporation much simpler. But it is still a time-consuming process and it can often be expensive to carry out this sort of monitoring properly, which is why the corporations that consistently keep a watchful eye on such developments are in the minority.

Yet there are real dangers in not keeping up-to-speed with what is going on. Burson-Marsteller's managing director Martin Langford says he is still amazed at how few corporations take seriously the threat to their reputations which is posed by comment on the internet. Langford, one of the world's leading practitioners of crisis management, who was memorably dubbed the "master of disaster" by Dominic Lawson in the Daily Telegraph, says that companies are flirting with danger if they fail to identify who the real online opinion leaders are in relation to their areas of activity.

They should also not underestimate the amount of harm which negative comment about them on the internet can do.

"By and large, when it's a net-based criticism, there isn't the same level of concern as there is about a negative piece in the FT," says Langford.

"But the negative comment could be reaching many more people and have a lot more impact on the brand."

Nothing better illustrates the dire implications of failing to deal appropriately with negative comment on the internet than the case of Intel several years ago, when a problem was identified with the maths co-processor of its new Pentium chip. Although the company was aware of the bug, it chose not to announce the problem, believing that it would be unlikely to affect anyone other than people doing the most complex calculations. A user quickly discovered the bug and posted information about it online, in an Intel-related news group. At this point, Intel refused to replace any chips, unless the customer could prove they were doing the sort of calculations that would result in the error occurring.

Unfortunately, Intel was also in the middle of a multi-million dollar, worldwide advertising campaign, "Intel Inside", that was designed to raise its profile among end users, particularly small business and home-computer buyers. These groups reacted particularly badly to Intel's attitude. Although there was little chance that they would ever encounter the bug, they perceived it as a general problem with the Pentium chip. They lost confidence in Intel's products and grew angry at the company's apparent arrogance.

"Because Intel wasn't monitoring what was being said about it online, it was unaware of how strength of feeling against the company was escalating," says Firefly's Moore. "It was not until the story moved from the internet to the Wall Street Journal and subsequently to prime-time TV and radio news around the world that Intel was forced to respond. After six weeks of criticism, Intel caved in, agreed to replace all Pentium chips on demand and issued a humble apology."

This shows that what starts out as a reputation issue on the internet can, if it's left to fester, quickly move into other media and wreak serious damage on the standing of a corporation. John Kaye, managing director Europe at monitoring specialist Delahaye Medialink, describes this as the "cascading process". Kaye adds that in their internet monitoring and reputation management responses, corporations need to differentiate between legitimate, informed criticism and attacks that are totally malicious.

Flic Howard-Allen, Hill & Knowlton's managing director, corporate campaigns and crisis, says that the secret for dealing with such issues is preparation.

"It can be very damaging if you are not prepared for it or are unable to cope," she explains. "You need to have thought it through beforehand, planned out scenarios and experimented. It's straightforward, but not many companies do it. Some of the people behind negative comment are clearly in the funny farm area and become discredited. Others are background noise, which needs to be sorted out."

Langford says that it is useful to have briefed "e-advocates" on stand-by. These are people such as scientists and ex-employees who can be mobilised to provide some balance to the online argument. Howard-Allen recommends that organisations also have the "outline of a rapid-response site" in place, complete with contact details, so that they can put across their own view on a hot issue. She feels many corporations still have not grasped the extent to which NGOs (non-governmental organisations) and the like can mobilise on the web, but warns that corporations should not seek to put across their views in chatrooms. "Large corporations are not welcome in chatrooms, it's better for them to observe and take action away from there. Also, you shouldn't enter into debate and dialogue with extreme groups online."

However, that is not to say that corporations should not engage online with more respectable organisations that harbour opposing opinions to their own. Robert Grupe, AugustOne Communications' associate director, digital services, says that it is often a useful tactic for a corporation to position itself as "facilitating conversation" with NGOs. Petroleum giant Shell has blazed a trail in this regard, opening up an area of its site to free debate and creating links to sites that are not supportive of its activities. According to the company's PR agency Fishburn Hedges, the tactic has had a positive impact on its corporate image. Certainly, it is an approach that has found many admirers.

More corporations would benefit from acknowledging image problems where they exist and dealing with them openly and honestly. Says Infonic's Bunting: "Shell is an interesting example here - after facing a barrage of criticism over the past few years, it converted its site into a temple to openness and accountability, with whole sections devoted to "Issues and Dilemmas" and unmoderated discussion boards on the company's social and environmental performance. It's a risky strategy, providing a high-profile forum for its critics and opponents to raise their arguments, but Shell has calculated that it is better to have that debate within its own space, where at least it can listen to exactly what people are saying."

There are other ways in which companies can protect themselves: for a start, advises Grupe, by making sure that they own their own trademarks online. In the US, for example, toy e-tailer eToys.com has been criticised on the very similarly named eToy.com site. Moreover, corporations need to do the "hidden programming" that optimises their sites with search engines, otherwise those searching for their sites might be directed to sites opposing what they stand for.

Yet truly determined antagonists will find a way of making an impression, maybe even on a corporation's own site. Last year saw the appearance of some readily available software called ThirdVoice that enables users to post the digital equivalent of post-it notes onto sites which are then viewable by others with the same software. Needless to say, derogatory comment has been affixed to a number of corporate sites.

Given that the internet is not subject to the same editorial controls as other media, and is perceived by many as being slightly anarchic in nature, some people mistakenly assume that libel is not an issue. Yet defamation legislation does apply and corporations can use it to their advantage. But it should be seen as weapon of last resort, to be used only on malicious critics.

"Sometimes, if attacks on your reputation are not interfering with your business or causing distress to people, the best advice is just to ignore it," says Ian De Freitas, a partner at law firm Paisner & Co.

De Freitas says that, in his experience, online attacks on reputation fall into three broad categories. The first he disarmingly refers to as "nutters" - those making allegations so incredible that nobody would ever believe them. These generally can be safely ignored. The second category he defines as "potential credibles" - allegations which at face value might sound sensible and might increase in apparent substance if they are repeated often enough. These need to be addressed. Finally, there are the "harassers" - people who overstep the mark from criticism to causing people to fear for their safety. Employers need to protect employees from this type of behaviour and the law offers a remedy in the Protection from Harassment Act, which was originally drafted to address stalking.

As there has been little in the way of case law as yet, the picture is still evolving. However, there is a big difference between the US and the UK. Across the Atlantic, the Supreme Court case of Lumney versus Prodigy found that ISPs cannot be held liable for defamatory comment posted on their message boards by other parties, whereas in the UK, the case of Godfrey versus Demon reached the conclusion that ISPs should immediately remove any defamatory content once it has been brought to their attention.

This makes ISPs a soft target.

"If you're trying to control what people are saying about you, attack the ISP which is allowing the communication to take place," says De Freitas.

"Nowadays, because of the Demon case, most ISPs will take down any perceived defamatory content without asking any questions. They don't want the liability."

Consultant and writer David Phillips, author of Managing your reputation in cyberspace, says that the internet is making organisations more "porous", in that ever-greater amounts of information are leaking out into the public domain either maliciously or accidentally. Added to this is the fact that "people and internet technologies - including even the most humble search engines - can change messages by adding information of their own and through association of one message with another".

What all of this means is that corporations will have to work even harder in future to protect their online reputation.



RED BULL COUNTERS A DAMAGING URBAN MYTH

Reputation management issues can often be a headache, even more so when allegations are made that the consumption of your product causes headaches. That was the situation faced by energy drink brand Red Bull in March this year, when an email making potentially damaging claims about the beverage was circulated extensively.

The text of the email read as follows: "Ever wondered what's in a can of Red Bull energy drink? The small print lists a host of ingredients and among them is glucuronolactone.

"Glucuronolactone was first used in the Vietnam conflict to boost morale amongst GIs who were suffering from stress and fatigue, but was banned following several deaths and hundreds of cases involving anything from severe migraines to brain tumours in personnel prescribed the stimulant.

That was in 1973 and glucuronolactone is still banned for commercial consumption in the US to this day. An article in this month's edition of the British Medical Journal has highlighted a growing number of cases reported by doctors and surgeons. All of the patients examined were regular drinkers of Red Bull. Next time you get a headache after drinking the stuff, you'll know why!"

Red Bull first became aware of the problem on 17 March when the hoax email was forwarded onto the company for the first time. "I immediately realised we needed a response to put people at ease and make them realise it was a hoax," says Red Bull communications executive Anoushka Hartop.

"We took it very seriously."

Red Bull drafted a response email to be sent out as quickly as possible to anyone that contacted them about the hoax. Its also briefed its product-sampling teams and student-brand managers so that they could deal with the issue. Information was added to the FAQ section of the Red Bull site and media relations activity was also initiated to handle the way in which the story was covered in trade and national news titles.

For several days, says Hartop, the company was getting an email on the subject "every two minutes". The wording of Red Bull's own email response provided a total rebuttal of the allegations, but also contained an element of humour in keeping with the brand's positioning.

It read: "Thank you for your question about Red Bull. I can put your mind at rest! It is totally an urban myth. Thank you for letting us know about it though. Red Bull does contain glucuronolactone, but it is a natural substance found in your body and accelerates the elimination of both endogenic and exogenic noxae (harmful substances). So it has a detoxifying effect.

When your body is under increased stress, or tiredness, your level of glucuronolactone in your body may be reduced. Therefore a supplement from Red Bull, may replenish your bodily needs.

"We have done a search in the British Medical Journal and there are no references to Glucuronolactone. Every country has very tight laws about EVERY ingredient in food products and all are extensively tested. The EU would not allow a product to be sold if it contained harmful ingredients. If a headache does occur, maybe it is due to the alcohol people sometimes like to mix Red Bull with! Thank you."



ERICSSON MUST STILL REBUT THE FREE PHONE HOAX

Early in April this year, many people received an email - purporting to come from Ericsson - which contained an offer that sounded too good to be true. It was.

The email in question promised free mobile phones. All the consumer had to do was forward the message on to their friends: eight friends and after two weeks they would be given an Ericsson T18; 20 friends and they were promised a brand new Ericsson R320 WAP-phone.

"By giving free phones away, we get valuable customer feedback and a great word-of-mouth effect," claimed the email, which was attributed to Anna Swelund in Ericsson's marketing department. Unfortunately for those consumers eager to snap up a freebie, Ericsson employs no such person.

The problem came to Ericsson's attention on 3 April and one theory has it that the email started out as an April fool and then got out of control.

Within 48 hours of Ericsson having it brought to its attention, the troublesome free-gift email had reached most parts of the globe and the company was already fielding a wave of enquiries from consumers wishing to find out if the offer was real.

The company responded by sending the following statement to the disgruntled consumers who got in touch: "Ericsson is not giving away free phones.

The chain mail you have received is a fraud and there is no person with the name of Anna Swelund working at Ericsson. At Ericsson, we are constantly looking at new and innovative ways to market ourselves, but chain e-mails are not one of them. We kindly ask you not to forward the chainmail further."

For 24 hours it even set up the bogus Anna Swelund email address, but then closed it down again for fear that this would simply create a further chain. The issue was also dealt with on Ericsson's site, but with the benefit of hindsight, says Ericsson press manager Helena Norrman, it would have been better to give it a more prominent position.

"When these sorts of things start, it's hard to decide how big they are going to be," she says. "You have to make a lot of decisions in the first few hours."

Norrman says that there was a genuine concern that the incident might damage the Ericsson brand, with some consumers believing it was an underhand tactic for building a list of email addresses. To this end, it was important to answer specific consumer concerns individually to allay any doubts.

This was time-consuming, but had to be done to protect the company's reputation.

Ericsson had been the victim of another hoax email about a year earlier, but this did not spread far geographically because it was in Swedish.

This year's hoax spread like wildfire because it was in English. It has also been translated into French and Spanish, and Ericsson is still having to handle occasional enquiries about it from far-flung parts of the world.