To effectively manage the risks for brand campaigns with influencers, a coordinated effort between a brand’s marketing and legal teams is crucial. This collaboration ensures that practical measures are in place to minimise potential issues and provides strong contractual protections for the brand if problems do arise.
Here are some key practical and contractual considerations for brands before launching influencer marketing campaigns.
Ensuring regulatory compliance
In order to comply with regulatory requirements, a business must ensure that any influencer it works with complies with the applicable advertising and disclosure rules. All promotional posts by influencers must be clearly marked as paid content, in line with current regulations and industry standards. Additionally, there are specific requirements for certain sectors like products high in fat, salt or sugar, financial products, alcohol and NFTs.
Payments
Businesses typically pay influencers using one or a combination of the following approaches:
- A flat fee per social media post featuring a product or service.
- Affiliate marketing, where the influencer posts about a product or service with a link to a purchase gateway.
It is important to clearly outline the approach at the outset, and to correctly reflect the approach in the contract. This also includes any restrictions, suspension triggers and any agency involved.
Content approval and IP rights
Intrinsically linked to influencers is the creation of content; it is recommended that brands build an element of control into the contract. This might be pre-approval of content, amendments or the right to require removal. This is not only fundamental to ensure the correct use of the brand’s name, trade marks and any other IP rights at play, but also to allow for a review of regulatory compliance with relevant advertising and sector guidelines.
Transparency requirements in advertising
When a business compensates an influencer (not limited to cash payment) the content produced must clearly indicate that it is advertising. This is required under consumer protection regulations. Additionally, if the business has editorial control over the content (which is a low bar) it will be considered advertising within the scope of the CAP Code.
Avoid common pitfalls:
Unclear contracts
Ensure all agreements with influencers are documented in clear, comprehensive contracts which are easy to read to avoid misunderstandings and provide legal recourse if issues arise. We can help you build an influencer contract that suits your business and protects your interests.
Regulatory non-compliance
Failing to comply with advertising regulations can lead to legal penalties and damage to the brand’s reputation. Stay updated with current regulations and ensure influencers are aware of their obligations. We provide training to businesses to help them demonstrate compliance with the regulations.
Inadequate disclosure
Influencers must disclose paid partnerships. Inadequate disclosure can mislead consumers and result in regulatory action. We can help you understand when content is classified as an AD and what this means for you and your business. See our article on the CMA’s bolstered powers under new law.
Ignoring sector-specific requirements
Different sectors have specific requirements, and it is important that this is acknowledged, factored into the campaign and complied with. If your business falls into a highly regulated industry, it is important you understand your position before engaging an influencer.
Lack of content approval
Not having the right to approve influencer content can lead to posts that do not align with the brand’s values and guidelines or regulatory requirements. It is recommended that a brand retains the right to pre-approve content and to require amendments if the content does not comply with the brief. This can and should be dealt with in the contract.
Failure to monitor influencer activity
It is recommended for a brand to actively monitor the influencer’s activity to ensure posts align with the brief and address any issues promptly. This is part of one of the practical steps your marketing team can take to mitigate risk to your business.
If any of the content in this article resonated with you and your business, or if you would like to discuss the legalities of engaging influencers, please get in touch with our specialist team.