The day-to-day use of social-media platforms (e.g., Instagram and TikTok) means that content creators, influencers, streamers, and celebrities (Influencers) are now significant avenues for brands to advertise their products and/or services. Brands are increasingly looking to capitalise on the ‘influence’ Influencers have on their followers and the trust followers place in an Influencer-endorsed product and/or service. Influencer marketing agreements, also known as influencer endorsement agreements or brand ambassador agreements (Influencer Agreements), are now critical to document the expectations and obligations between a brand and an Influencer when using an Influencer’s account to advertise a brand’s products and/or services.
Why are Influencer Agreements important?
It is important for both the brand and Influencer to get a formal written Influencer Agreement in place so that both the brand and the Influencer have clarity on:
- What is expected of each other
The parties will want to agree to (i) the number of posts to be published; (ii) the timing of the post(s) – does the brand need it to be published at a particular time in line with the launch of a new product and/or service; (iii) the type of post(s) (e.g., a reel, story or post); and (iv) the platforms it will be published on.
- How will the Influencer be paid and how much
Typically, this will take the form of monetary payment, but the Influencer may be paid in exchange for the brand’s products and/or services or other benefit (e.g., given a discount or commission on sales generated).
- Who will own the rights in the content posted
Key legal issues in an Influencer Agreement
The brand and/or Influencer’s reputation
It is essential for both parties to ensure there are adequate provisions in an Influencer Agreement if either the brand or Influencer is subject to adverse press. In these events, the innocent party (whether that be the brand or Influencer) may be at risk of reputational damage by association and should have a right to terminate the agreement as well as a right to withdraw any posted content.
Intellectual property and image rights
Content published may attract intellectual property protection, most notably copyright protection, and the Influencer Agreement should set out ownership of any intellectual property created. The brand will typically want a full assignment of intellectual property rights in the content so that it may be able to re-use the content (e.g., to repost it on its own social-media accounts and website) as well as a potential waiver of the Influencer’s moral rights (if applicable).
An Influencer Agreement should also include a non-exclusive licence for the brand to use the Influencer’s image rights such as their name, biography, and images. This licence may last for the duration of the campaign and/or for a period of time thereafter.
Advertising law and regulations
As social-media posts are a form of advertising, published content falls within the remit of the Advertising Standards Authority (ASA), the Committee of Advertising Practice (CAP) and the Competition and Markets Authority. A brand will typically require the Influencer to provide an absolute statement that its content shall comply with applicable advertising laws and regulations such as The Consumer Protection from Unfair Trading Regulations 2008 as well as guidance and codes such as the non-broadcast CAP Code. Helpfully, the ASA has published specific guidance for Influencers here. An Influencer Agreement should make it clear what the brand expects from the Influencer and may include the following obligations:
- That all content posted will be disclosed as an advertisement (e.g., by using #ad and other platform-specific functions);
- That the content will be truthful and not mislead consumers. Often a brand will provide and incorporate its social-media guidelines which will set out how the brand’s intellectual property such as its logos and slogans can be used as well as permitted statements that the Influencer can include; and
- An approval mechanism for the brand to approve the contents and the timeline for such approval.
Exclusivity will be a key provision for both the brand and Influencer. For the brand, it will prefer for its engagement of the Influencer to be non-exclusive allowing it to freely appoint other Influencers to advertise its products and/or services.
For an Influencer with significant influence such as a mega influencer (i.e., with a following over 1 million) or a macro influencer (i.e., with a following between 500,000 and 1 million), he/she may have sufficient bargaining power to be an exclusive ambassador for a set period of time, for a particular platform or for a particular campaign. The exclusivity clause may also set out an Influencer’s restrictions including prohibiting it from providing its services to a direct competitor of the brand during the campaign and for a set period thereafter or to anyone providing similar goods and/or services to the brand.
Influencer Agreements are integral to ensure the brand and Influencer start the relationship on a good note. Not having an agreement in place or simply relying on more informal exchanges such as DMs (i.e., direct messages) may leave gaps and be silent on key provisions such as intellectual property and exclusivity. Further, more informal arrangements will not touch on key points such as liability and indemnification. As to what is an appropriate liability cap, and whether an indemnity is covered under the liability cap, will very much depend on several factors such as the risks involved, the level of control that the brand has over the content, the consideration being paid, and the bargaining power of the parties.