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Insights

11 January 2018

The meteoric rise of the so-called ‘Influencer’

You would have to have your head buried fairly deep in the sand to not have noticed the rising influence of so-called ‘influencers.’ Celebs (in the recognisable, old-fashioned sense of the word) from sport, TV, film and music; vloggers; fashion bloggers; fitness experts; wellbeing gurus; Instagram stars and many others comprise this efficacious group who have just one thing in common – a huge online following.

Brands spent 2016/2017 beginning to comprehend the power of these individuals to influence the buying decisions and opinions of their followers.  Marketing strategies and advertising campaigns started to shift to something more dynamic, agile and modern. After all, why rely on your existing database of customers to promote your products to directly when you could access a far broader audience via an individual who is already popular and considered aspirational by millions of potential customers?

The commercial rationale is clear and the results are quantifiable. Brands can access verifiable data clarifying the impact of each social media post - impressions and click-through purchases can be counted and the data can be included in Annual Reports.
Towards the middle of 2017 we saw legal teams and commercial advisers in the big brands start to reconsider their contracts and arrangements with influencers but to date it has been a largely undocumented (in the legal sense) trend. A traditional un-wieldy, all-singing, all-dancing sponsorship agreement would be inappropriate to govern one post on Instagram and the basic ‘provision of services’ T&Cs on the back of a purchase order doesn’t really fit the bill.

Instead, brands require shorter term, very commercial T&Cs governing one-off engagements relating to a specific campaign or event or even a single social media post.  In a world where an individual’s popularity fluctuates rapidly and is easily tracked checking the number of followers on an app, this trend seems likely to continue.

Some things to think about:

Get a contract

From what we have seen in the market, influencers aren’t surprised about the requirement to sign a contract before they post and are paid. While some of the most powerful influencers are young (if you’re contracting with an under 18 have a think about getting their parent to sign on their behalf and amending the terms accordingly) and/or don’t seem to be business-savvy, contracts are becoming the norm. That said, if you want someone to abide by the terms of your contract it is very important that the terms are easily understood. Make sure the contract is relevant and clearly sets out exactly what you are expecting the influencer to do / not do. 

Control vs impact

Where sponsorship arrangements have traditionally included stringent approval processes prior to the dissemination of any content, as the world of advertising becomes increasingly responsive, contractual terms must keep up. Requiring approval rights over every Tweet could seriously reduce the impact of that post. 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 parameters in terms of what is acceptable without approval and what is an absolute no-go.

Reputation management Incorporating morality and reputation clauses in sponsorship contracts is nothing new but if an influencer’s reputation falls by the wayside it is no longer the case that terminating their sponsorship deal will give you the instant separation you are looking for. Historic social media posts will exist until they are deleted. Including a ‘cleansing’ clause in an influencer contract which can be activated if the arrangement is terminated for certain reasons might give some comfort.

The regulator

Social Media sponsored advertising has been a hot topic for the advertising regulator in recent years. The recent ASA adjudication against Wahoo Fitness looked again at the concept of ‘editorial control’ reminding businesses that ‘control’ over an ad will not just be determined by whether the business has an ultimate right of approval – rather the ASA will look at the relationship of the parties as whole. Consumers are also more savvy these days and will report marketers who fall foul of their obligations. As a reminder, a consumer should know immediately they are looking at an ad. Including “#ad”, “advertorial” or “ad feature” in a social media post or video title is a simple way to ensure this.  We are yet to hear from the regulator how to manage this requirement in the context of Live Feeds and videos.

Influencers have transformed the advertising and sponsorship scene. Where rights and obligations have previously been meticulously described (often in legalese), we are moving to a contractual standard that is agile, responsive and principles-based, added to which contracts need to be concise, commercial and not overly onerous.

Giving up more detailed contracts and some control of your brand messaging is no doubt something that the Board may struggle with but considering the amount of time people spend browsing social media and the number of followers these influencers have, it is probably worth it.


For more information on this topic, please contact Caroline Swain on +44 (0)20 7203 5158 or at Caroline.Swain@crsblaw.com.

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