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7 Issues to Consider When Working with Influencers

Posted by Chandana Rao on November 3, 2021 at 10:02 AM

FTC influencer marketing agreementThe growth of influencer marketing has been nothing short of meteoric since social media carved a place in our daily lives in the early 2000’s[1]. Today, most brand marketing campaigns include an influencer component, capitalizing on the follower base of prolific content creators and the trust they’ve built with their supporters. Because of its effectiveness in shaping consumer opinion, influencer marketing has not escaped the attention of the Federal Trade Commission (FTC)[2]. Although its endorsement guidelines may not have the full force of law yet, the FTC has begun taking action against both influencers AND the brands who engage them for violations of its rules[3].

It is within this evolving legal landscape that we offer the following suggestions for brands who work with influencers as part of their overall marketing strategy:

  1. Emphasize the importance of cultural awareness
    For brands with a global reach, it is critical that influencers understand and respect the cultural norms of consumers from different parts of the world. For example, as the world grapples with the COVID pandemic, companies should be mindful that COVID-safe guidelines (social distancing, mask wearing, gathering limits) will vary in different countries and jurisdictions. What might constitute safe behavior in some parts of the world may not be so in others. Influencers who intentionally or negligently disregard these cues can greatly harm the brand.

  2. Provide content guidelines
    Brands can support FTC compliance by providing content guidelines to influencers and influencer agencies, including examples of acceptable disclosures for each specific social media platform. These guidelines may include hashtag recommendations, as well as terminology that meets FTC disclosure standards.

  3. Adopt monitoring protocols
    Companies should consider implementing monitoring protocols to review content created by influencers. Likewise, they might seek creative control by requiring influencer content to be approved by the brand prior to posting and by reserving the right to take down content that is either inconsistent with the brand’s core values or potentially infringes on a third party’s rights. 
  1. Clarify content ownership
    Although it is common for influencers to own the content they’ve created, brands may prefer ownership in certain situations. In this situation, the brand should either include a “work made for hire” clause to ensure ownership of the influencer’s copyrightable work, or an assignment clause which gives the brand full rights to the content. Another option might be for the brand to seek licensing rights to the influencer’s content.

  2. Protect the brand from liability
    Brands should consider including strong indemnification provisions to protect themselves from possible IP infringement by influencers. When influences are represented by agencies or other third parties, the indemnification should come directly from these third parties. Additionally, it is wise to ask such third parties to represent and warrant that the influencers they represent will be responsible for following FTC guidelines and hold all IP rights to their content.

  3. Confidentiality and/or exclusivity
    If the brand will disclose any proprietary information to the influencer in the course of their relationship, it may make sense to include a confidentiality provision. Further, if the brand wishes to keep the influencer from working with competitors, an exclusivity clause covering a specified period of time may be warranted.

  4. Consider a morality clause
    A big trend in influencer relationships has involved the inclusion of a morality clause which gives brands the right to terminate their relationship with influencers when certain behavioral standards are violated. In the post-COVID environment, some companies have extended this clause to include violations of state and federal laws and/or executive orders regarding social distancing, masks, and vaccines.

Companies need to be thoughtful about how they engage influencers, not only to protect themselves from potential FTC enforcement action, but also to protect their brand reputation and image in the eye of consumers. A well-drafted influencer agreement can make the difference between success and failure of a brand.

If you have questions about an influencer agreement or a potential engagement with an influencer, please contact Chandana Rao at crao@outsidegc.com or 929-356-5940.  

 

Chandana Rao is a member of our New York-based team with nearly 20 years of legal and business experience. She regularly advises her clients on corporate, IP, and commercial matters, including influencer agreements, brand collaborations, MarTech agreements and social media collaborations. Chandana can be reached at crao@outsidegc.com or 929-356-5940.

 

 

[1]https://influencermatchmaker.co.uk/blog/age-influencer-how-it-all-began; https://influencermarketinghub.com/influencer-marketing-statistics/

[2] https://www.ftc.gov/tips-advice/business-center/guidance/native-advertising-guide-businesses; https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking#when; https://www.ftc.gov/tips-advice/business-center/guidance/disclosures-101-social-media-influencers

[3] https://www.ftc.gov/enforcement/cases-proceedings/182-3174/teami-llc

Topics: FTC, influencer marketing, FTC compliance, influencer agreement, brand marketing

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