Customer Service

influencer marketing contractsAs influencer marketing has matured into a mainstream marketing strategy, legal concerns have grown. In the past, marketers and their partners reached informal agreements through email or messaging apps. Larger influencer marketing budgets, more attention from regulators, and well-publicized PR mishaps have prompted marketers to create written contracts 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. And when both sides are satisfied with results, they’re more likely to work together in the future.

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 list 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.

Specific activities. Detail the influencer’s activities during the campaign. That can include frequency of posts, the types and length of posts, and time between posts. Also include a provision that permits the brand to re-post social media activity through its own digital media channels. “The more of these expectations that are specified in the influencer agreement the better the engagement will be,” says Paul Gelb, counsel with Drinker Biddle & Reath LLP.

Exclusivity. The contract should be exclusive during the campaign’s term, Gelb advises. 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 specify the influencer’s requirements and allow the company to terminate the agreement in the event of a material breach, Gelb says. 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.

Metrics. Increasingly concerned about measuring the effectiveness and value of influencer marketing campaigns, more marketers, now require influencers to report metrics. Define what metrics you’d like the influencer to report in order to improve influencer marketing measurement.

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.