In the dynamic world of social media marketing, platforms such as Instagram, Facebook, YouTube, and TikTok play a crucial role in bridging the gap between brands and their target demographics. Major brands like Nike, Adidas, and Coca-Cola, as well as some emerging companies such as Chinese fast fashion giant Shein, have all successfully harnessed the power of influencers and micro-influencers, to authentically engage their audiences.
The dynamic and visually driven nature of social media brings unique legal challenges. As brands seek to leverage these platforms’ vast potential, understanding and mitigating the legal risks associated with influencer partnerships is crucial.
Influencer Agreements
Following the completion of the influencer vetting process by the brand, the brand and the influencer will proceed to sign an influencer agreement, which outlines the terms of their collaboration. Typically structured as a fixed-term service agreement, it coincides with the length of the associated advertising campaign. This contract is essential for setting out clear expectations and explicitly defining the responsibilities of each party involved.
Scope of Work
An influencer’s primary task is to market a brand’s products and services to their followers, as it is defined in highly detailed influencer agreements. These agreements usually outline responsibilities including the creation and dissemination of diverse content forms (blog posts, videos, and social updates), ensuring all materials conform with the brand’s requirements.
These agreements also specify the format, length, and quality of the content, and set a clear posting schedule across designated platforms. They also often institute the brand’s right to review and approve the influencer’s content before it is published, including timelines for review and criteria for approval.
Compliance with Advertising Standards
During collaboration with a brand, influencers are required to comply with the rules and regulations established by the governing authorities and industry groups that oversee the marketing of products and services to the public. These standards are intended to guarantee that advertisements are honest, not deceptive, and fair.
In some jurisdictions, influencers are considered transmitters of the advertising message and share liability with the advertiser (the brand) for any damages resulting from the publication of an advertisement that is clearly against advertising laws upon.
Confidentiality Clause
Influencers often have early access to a brand’s marketing strategies, planned and ongoing business operations, upcoming product details, pricing, and other sensitive information. Agreements with influencers therefore often contain non-disclosure and confidentiality clauses, together with contractual penalties for breach.
Non-Disparagement Clause
When brands enter into agreements with influencers, they often include a provision that prohibits influencers from making negative, damaging, or derogatory comments about the brand they are partnering with or its products. This clause is designed to protect the brand’s reputation and ensure that the partnership remains positive and mutually beneficial.
Brand Exclusivity
Brands often require that influencers agree to an exclusivity period during and after an advertising campaign, especially if there is a risk that the influencer might work with competitor brands. It is not unusual for this clause to even extend to prohibiting the mention of competitor brands.
Usage Rights
Repurposing content from influencers can significantly boost a brand’s marketing initiatives. Influencers often bring authenticity and strong engagement to their creations, making their content highly effective across multiple marketing platforms. It is crucial for brands to obtain clear authorization to use this content beyond its initial intent. Expanding usage rights for influencer content typically involves higher compensation, reflecting the additional value provided.
Compensation Models
Influencer compensation is an important aspect of the partnership agreement, encompassing various models like flat fees, performance-based commissions, product seeding, or a combination thereof. Flat fees offer a direct, predetermined payment for specific tasks, often on per-post basis, while commissions incentivize influencers with earnings based on sales or engagement metrics, and product seeding involves compensating with goods.
Termination Clause
Termination clauses are essential in influencer agreements as they specify how and under what circumstances either party can terminate the contract before its scheduled end. These clauses clearly outline the conditions and repercussions of such decisions.
Key TakeawaysAs the influencer marketing industry continues to grow at a rapid pace, the importance of robust influencer contracts cannot be overstated. These agreements are vital for protecting a brand’s reputation, intellectual property, and sensitive business information, by ensuring that influencers adhere to clear guidelines and confidentiality terms. Such safeguards are vital for maintaining a brand’s integrity and achieving its strategic goals in a competitive marketplace. |
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For additional information, please contact Mr. Matija Markovic, attorney at Doklestic Repic & Gajin.