Brands and influencers — benefits and pitfalls

This article was first published on Lexis®PSL IP on 5 February 2018. Click for a free trial of Lexis®PSL.

What benefits might a brand get from using an influencer?

Influencers are so named because of their extensive social media following. They have a self-selecting, trusting audience that can typically be categorised by age, sex, location and/or interest.

By using Influencers effectively brands are able to deliver targeted messages to large, interested groups from a trusted source.

What sort of contract best fits arrangements between brands and influencers?

The length and complexity of the contract will depend on length and complexity of the relationship itself. A contract for a single post on Instagram will look different to an exclusive, long-standing brand partnership/sponsorship arrangement.

Influencers do not always have legal or commercial advisors so contracts should usually be short, relevant and easily understood. Ideally, clear parameters and commercial terms (e.g. frequency/number of posts, regulatory requirements, exclusivity restrictions and fees) should be set out upfront with legal terms to follow. The Influencer must understand exactly what is expected of them. 

If contracting with an Influencer who is under 18, the agreement should be entered into with the individual’s parents/guardian and the terms should be amended accordingly.

What are the key clauses that should be included in a contract with an influencer?

• Approval Rights / Brand Guidelines: Brands need to decide how much control they want to have over the content disseminated by the Influencer and this must be clearly reflected in the contract drafting (see below for more on this).
• Exclusivity:  clarity is needed around the extent of exclusivity. For example, is the Influencer restricted from working with competing brands? – if so, these should be listed or clearly defined. Does the brand have exclusivity in respect of certain platforms or channels or perhaps for all channels in relation to a specific matter? What about new technologies and platforms? 
• Morality / Reputation Clause: including a termination right exercisable by the Brand following any behaviour of the Influencer that could affect the reputation of the brand is essential. Brands may also want to incorporate a ‘cleansing requirement’ obliging the Influencer to delete all previous posts relating to the brand if this reputational termination right is exercised.
• Regulatory Requirements: the ASA made it in clear in its Online Affiliate Marketing Guidance that the usual CAP Code rules will apply to “affiliate” marketing. In particular, marketing communications must be obviously identifiable as ads and they must not falsely imply or claim that the marketer (in this case the Influencer) is acting as a consumer. Different rules of disclosure apply to social media posts, vlogs and blogs – setting these out clearly in the contract to set the appropriate expectation is helpful. It is the responsibility of both the Brand and the Influencer to ensure that the rules are followed and failure to do so can have damaging consequences for both parties.

How should approval processes be dealt with?

The most successful advertising content is often reactive – an individual honestly responding to a situation, experience or product. Stringent and time-consuming approval rights will restrict the impact that an Influencer can have. Striking a balance between maintaining the reactive appeal of social media and the protection of the brand is complex. One way for brands to manage this is to set out clear contractual parameters of what is acceptable without approval and what is an absolute no-go.  Providing brand guidelines can also be an effective tool.

Essentially, however, Brands must understand that Influencers are brands themselves. If a Brand’s tone is imposed on an Influencer their followers will recognise it intuitively and the advertising content may not have the desired outcome.

How should a brand guard its reputation in contracting with influencers?

Reputational damage is one of the key risks associated with working with Influencers.

The simplest first step is due diligence on the Influencer prior to engagement. If he or she has a history of erratic behaviour or act in a manner that is not consistent with the Brands’ values they should be avoided.

Having a PR strategy in place to quickly manage any situation that may arise is another good approach.

On a contractual level, termination for convenience or following reputational damage (as described above) is a useful way of preventing ongoing damage to the Brand’s reputation.

Another option is to contract with Influencer’s for one-off campaigns or even single social media posts rather than longer term collaborations. The popularity of an Influencer can fluctuate rapidly and is easily tracked by checking the number of followers on an app or engagements with a post. Keeping engagements short, while potentially adding an administrative and cost burden, may enable Brands to utilise the market more effectively.

How can brands fall foul of the regulator when using social media sponsored advertising?

If the Influencer’s content falls within the ASA’s definition of an advertisement it is essential that the content is clearly described as an ad. Early disclosure is key and different rules apply to different channels. The use of #ad is always advisable.

If the content seems to fall outside the ASA’s definition of an advertisement as assessment should be made of the whole contractual relationship between the Brand and Influencer. The recent Wahoo Fitness ruling reminds Brands that ‘editorial control’ takes many forms and isn’t limited to a final right of approval over content.

Disclosure isn’t the only thing to remember. If the content is an ad then the other CAP Code rules will apply as they do to all advertising content so, for example, the content must not be misleading and must not cause harm or offence. 

What is ahead for those contracting with influencers?

We are seeing an increase in the number of agency-managed Influencers. Contractual standards are likely to improve as a result.

Similarly, as Influencers become more business-savvy, contracting via an image rights company may become the norm.

Inevitably the growth in “Affiliate Marketing” will result in additional regulation and guidance from the ASA. Advertising methods and channels are rapidly changing and the regulator is struggling to keep up with this evolution. That said, this is a hot topic for the ASA and all those involved should keep an eye out for relevant rulings and guidance.

This article was written by Caroline Swain. For more information, please contact Caroline at caroline.swain@crsblaw.com or on +44 (0)20 7203 5158.