Influencer marketing has become one of the most popular ways for businesses to engage consumers and drive sales. From promoting your brand to new audiences to securing customer loyalty, engaging well-known influencers’ services can do wonders for advertising your business. However, there are certain risks when dealing with any third parties. A well-drafted agreement with the influencers you engage can help mitigate any risks. This article will outline some key clauses to include in your influencer agreement that will ensure your business is protected.
Details of the Services
It is crucial to be specific about the services you require from the influencer you are working with. You should detail all the essential elements of the services, including:
- whether you require the influencer for one-off content creation, a campaign or on an ongoing basis;
- how many posts, stories, and articles you need the influencer to create;
- which dates and times you require the influencer to publish the content;
- which social media platform you require the influencer to post on, specifying the handles/links to the accounts the posts are to be created under;
- any points that you need the influencer to mention in each post; and
- any specific hashtags and tags you would like the influencer to use in each post.
A key issue in the performance of the services will be the rights, if any, you have to curate content or have veto rights over the content the influencer creates. This is complicated legally by the application of the Australian Consumer Law. This is because allowing you these rights may mean the content is not a true representation of the influencer’s opinion. As such, the content may be misleading and deceptive. Therefore, you must have clear termination rights should you wish to terminate the influencer agreement.
Paid Endorsement Disclosure
The Australian Association of National Advertisers (AANA) requires advertising and marketing communication to be distinguishable. The Australian Consumer Law (ACL) also prohibits misleading and deceptive advertising. Therefore, it is crucial to ensure social media users know that posts published through influencer marketing are sponsored. It may be misleading if followers are unaware that you are paying the influencer to market your products and brand.
Accordingly, you should require the influencers you work with to prominently disclose any posts you are paying them for as an advertisement. You can do this by requiring the influencer to use hashtags like:
- #ad;
- #paid;
- #paidpartnership; or
- #sponsored.
Further, you should ensure that their posts reveal their honest opinion of your products, rather than something scripted and inauthentic.
To find out more about best practices when engaging in influencer marketing, view the AiMCO Influencer Marketing Code of Practice on the Australian Influencer Marketing Council’s website. This Code of Practice is a practical guide for disclosure standards, influencer vetting processes and other various recommendations to assist businesses with remaining transparent yet commercial when engaging influencers to market their products.
Continue reading this article below the formFees and Payment Terms
A fees and payment terms clause should outline how you will pay the influencer for the marketing they conduct. Typically a payment terms clause will include:
- a description of the fees;
- when payment is due; and
- the accepted methods of payment.
Failing to make this clear may result in disagreements with the influencer. This is particularly likely if their payment expectations differ from what you are willing to provide.
For example, you should consider whether you will pay the influencer a flat fee per post or a lump sum if they are working with you on a campaign. You should also explain how you will be making the payment, whether that be through:
- cash;
- a bank transfer; or
- a third-party payment gateway, like PayPal.
You may also wish to pay the influencer by providing them with certain benefits, either in addition to or in replacement of a fee. Such benefits may include products from your brand on a once-off, weekly or monthly basis for a set period of time or a percentage discount on your products.
If you are providing any benefits to the influencer upfront, you should consider placing conditions on the benefits in your agreement. One such condition may be that, if the influencer does not perform the services under the agreement, they must repay the retail price of the benefits or the difference between the retail price and the actual price they paid.
Confidential Information
You may need to disclose confidential information with the influencer you are working with.
For example, suppose they are going to be an ambassador for a new product. Accordingly, you want to ensure that they keep that product’s information confidential until the launch date.
Your influencer agreement should contain a clause ensuring they do not disclose any information you share with them without your consent. To avoid any confidential information being leaked before launches, it is vital to outline specific dates within the agreement.
Ownership of Intellectual Property
It is essential to consider who will own the intellectual property (IP) in the content that the influencer is creating for you. Generally, a photo or video creator is automatically its legal owner. So, upon creating content, the influencer has exclusive legal rights over that content. However, you may want the influencer to:
- transfer ownership of their content to you; or
- provide you with a license to use their content.
Transfer of Ownership
If the influencer transfers their IP rights in the posts they create, you will become a legal owner of the content. However, if you still wish for them to upload the posts or use them in different ways, you will also need to grant them a license to use the content for specific purposes.
License
If you do not transfer the IP ownership and the influencer retains their IP rights, you must obtain a license from them to use their content. Your influencer agreement should specify:
- whether they can negotiate how you use their content;
- whether you will have exclusive use of their content;
- the term of the licence; and
- whether the licence is revocable and/or sub-licensable to a third party.
For example, suppose you want to share the influencer’s content on your newsletters and print advertisements. Accordingly, you should ensure your licence outlines how you intend to use the content.
Exclusivity
Whether engaging the influencer for one-off content creation or a lengthier campaign, you should make it clear whether the influencer is allowed to work with other brands. Confirm with a solicitor, if you require exclusivity restrictions, to ensure it complies with the Australian Consumer Law.
For example, if you own a sportswear company, you may wish to prevent the influencer from promoting and working with other sportswear companies.
If you are engaging an influencer for a long campaign, subject to restrictions under the Australian Consumer Law, it may be reasonable to expect and require them to exclusively promote your brand for a certain time frame. If the influencer is working with you to launch a new product, you should specify a time frame in which you require exclusivity. This may be for the duration of the campaign launch and a set amount of time after the launch.
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Key Takeaways
Influencer marketing can be extremely effective in increasing brand awareness and driving sales. However, you should consider various factors that will mitigate your legal risk when engaging influencers. A well-drafted influencer agreement clearly outlines the arrangement between your business and the influencer you are engaging is crucial.
If you need help with your influencer agreement, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
By default, the creator of the content will own the intellectual property rights in the content. Typically, businesses engaging influencers allow the influencer to retain ownership over their content whilst providing a licence to the business to use the content for their business purposes.
At the moment, there are no laws or regulations that specifically regulate influencer marketing. However, the Australian Consumer Law will still apply to such marketing as well as industry codes and guidelines such as the Therapeutic Goods Administration’s Advertising Code, the Australian Association of National Advertiser’s Code of Ethics and the Australian Influencer Marketing Code of Practice.
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