In the past, PR and marketing professionals and their influencer partners reached informal agreements through email or messaging apps. Larger influencer marketing budgets, more attention from regulators, and well-publicized PR mishaps have prompted companies and their communications agencies to create written contracts with influencers to avoid legal quagmires and safeguard their reputations.
Clear contracts benefit both influencers and brands. When influencers understand the brand’s expectations, they are better able to create and publish content that meets the brand’s goals. When both sides are satisfied with results, they’re more likely to work together in the future. Micro-influencers and nano-influencers, who may lack extensive experience working with brands, may especially benefit from the guidance the business agreements provide.
These are some essential components of influencer marketing contracts.
Managing rogue behaviors. Influencers sometimes post controversial comments or images that endanger the brand’s reputation. A “continuity of persona” clause that requires a consistent character and tone during the campaign can protect brands against rogue behavior, says Procter & Gamble’s Associate General Counsel Thomas Adams, reports Marketing Drive. The clause also lists topics to avoid, such as race relations, reproductive issues or politics. It can even cover trivial issues such as the influencer’s hair style.
Endorsement disclosures. Well-written contracts specify how influencers will comply with Federal Trade Commission (FTC) rules that require them to disclose when their posts are paid advertisements. Influencers who don’t adequately disclose paid relationships expose themselves and brands to FTC fines and class action lawsuits from consumers. Rules mandate that disclosures be clear, unambiguous and visible. Be explicit about disclosure practices. Some influencers add tags like #sponsored or #ad to posts.
It’s important to note that financial relationships aren’t limited to money. Influencers must disclose the relationship if they received anything of value to mention a product, including free samples. The FTC recommends including simple explanations like “Thanks to Acme brand for the free product” in an obvious location.
Specific activities. Detail the influencer’s activities during the campaign. That can include frequency of posts, the types and length of posts, due dates for specific deliverables, and time between posts. Specifying the start and end dates of the contract stipulates the campaign duration. Also include a provision that permits the brand to re-post social media activity through its own digital media channels.
“Provide as much detail as possible on the content the influencer is going to create, including format and length, and how the influencer is expected to promote it,” advises Michael Lasky, a senior partner at the law firm of Davis & Gilbert. “PR agencies entering into these agreements on a marketer’s behalf should be sure to provide influencers with detailed brand guidelines or a program brief establishing key messaging requirements for the content.”
Exclusivity. The contract should be exclusive during the campaign’s term. That provision prohibits the influencer from entering into a comparable contract with a competitor. Influencers should certify that they have no existing contracts with listed competitors.
Content ownership. Who controls re-use of the content is an ambiguous area. Document whether the influencer or the brand owns sponsored content after a campaign goes live and concludes. Brands often want to reuse content for other marketing initiatives and should specify content ownership rights in the contract. “Sometimes this stuff is fairly ephemeral, so when we don’t really have to own it, I don’t want to make that a major negotiating point if it’s not that critical,” Adams advises.
Pre-approvals. Requesting pre-approvals depends on the scope of the assignment and how much flexibility the company gives the influencer. “If there are strict rules around how something is to be presented or referred to in a post, you will want an approval process and the right to request changes,” recommends Lee McMahon, co-founder and principal at Support Legal, in Entrepreneur.
Termination. The agreement can allow the company to terminate the agreement if the influencer commits a material breach of the contract. It can also permit termination if the influencer is convicted of a felony or crimes of moral turpitude or in the event of personal insolvency or bankruptcy. Ideally, the contract will allow the company to terminate the contract for convenience at any time.
Payment. Explain how you’ll pay the influencer. Payment could be based on cost per engagement, commission or clicks. Influences may also receive free products or services or invitations to special events. While influencers were initially paid based on number of posts and reach, the sector is moving to a performance model based on conversions.
Measurement. Increasingly concerned about measuring the effectiveness and value of influencer marketing campaigns, more marketers, now require influencers to report results by exporting social media analytics results or providing a screen shot of their analytics dashboard. Define what data you’d like the influencer to report in order to improve influencer marketing measurement.
Misinformation. Influencers can substantially increase the spread of misinformation and fake news, given their large followings. Brands can help limit the spread of misinformation by forbidding influencer partners from sharing obviously fake news. A social media monitoring and measurement tool can review influencers’ content for spurious medical claims and other bogus assertions.
Bottom Line: Well-developed contracts with social media influencers specify expectations and help protect brands from rogue behavior. Although some contract clauses may seem overly restrictive, professional influencers may appreciate explicit expectations that help them meet the brand’s underlying goals.
This article was first published on July 8, 2018 and updated on May 14, 2020.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.