Learn about influencer contracts

Under The Influencer_ What Social Media Personalities Need To Know

From printed advertising in marketing to radio and finally, to television commercials, the medium for marketing seems to be constantly evolving. With the advent of smartphones, ultra-fast networks, and a variety of free-to-use social media platforms, marketers across the country have taken note. They are once again re-writing the rules on selling their products to us. 

We know massive merchants and advertisers can and do pay big bucks to subscribe to social media giants to determine consumer preferences based on the aggregate, anonymized behaviour of social media users. This is, itself, a relatively new phenomenon. However, another trend which appears to be to be emerging is what has become known as “influencers”. More and more, celebrities and seemingly ordinary people alike are endorsing products in fashion, skincare, tourism, hospitality, and cuisine. Some of these “ordinary” people themselves have hundreds of thousands of followers. This is a win-win for Small and Medium-sized Enterprises (SMEs), who may want to increase their social media footprint but do not have the advertising budgets to hire A-list celebrities. It’s lucrative too for the influencers who can monetize their efforts to grow and maintain their grassroots following. In essence, social media has given influencers the power to teleport their own personal brand all over the world, and they’re wisely using paid partnerships to take those recognizable (and up-and-coming) brands along with them. 

But before you think that influencers are a fly-by-night fad, think again. Influencer marketing was an industry worth roughly $14 billion last year and is expected to hit up to $16 billion this year. There is serious money at stake for both brands and their advertisers, so how should these relationships be properly structured?

We’ve been receiving more and more questions from marketing departments and influencers looking to enter this industry, and we wanted to address some of the most pressing questions here:

How do we as a brand pick the right influencer? 

The short answer is to do your homework. If you intend to enlist the services of an influencer, remember that you’re placing your marketing and your brand’s image in the hands of someone that you’ve likely never met in person. They’re not just a stranger, though – they’re a stranger with a megaphone. 

Make sure the influencer is someone that you would want to work with and that the values that they are promoting align with your own. You’ll know to avoid the obvious signs of people who would not fit (a vegan food brand working with a home butcher, for example) but check out the person’s history on social media and do a deep dive into former online postings.  You may want to review the comment sections to see how they respond to their audience or how the audience response to them. 

Remember that the internet can be an unforgiving place. If the influencer skyrockets in popularity, past controversial posts expressing racist or homophobic views for example will be quick to surface. Don’t let those become inadvertently tied to your brand. 

What do influencers need to disclose to their audience?

This question comes up frequently, especially because the relationship between influencers and merchants/advertisers can change so quickly. It can be a quick jump from “a lot of people like watching me and I like using these products” to “I’m now being paid to use these products in my videos” which then forms the basis for a paid partnership.

Popular platforms are already ahead of the game. Facebook, YouTube, Instagram, Snapchat and Twitter already assign special tags to paid partnerships and branded content to declare to users of the platform that they’re essentially watching a paid commercial, not just an average joe happy to be using a product. 

This also maintains integrity within the influencer process. While the Ad Standards council acts as an oversight body for advertising, they can refer matters to the Competition Bureau of Canada, which has released a statement saying that these types of paid relationships need to be made clear for consumers. If there is a failure to inform, the Competition Bureau can issue serious penalties including fines or even imprisonment.  

What should go into an influencer agreement?

No matter what the relationship is between an influencer and the brand supporting them, both sides should have a written contract in place for their mutual protection. 

Here are just a few of the key points that should go into these agreements:

  • Duration – How long will the agreement last? Will there be an automatic renewal, or will the parties have time to re-evaluate? Remember, for influencers this is guaranteed income and for brands it can be guaranteed marketing, so both sides need time to prepare if the agreement will come to an end.
  • Territory – Even though an ad can be seen anywhere, influencer promotion can be targeted. Will the influencer be expected to use hashtags and other marketing strategies to focus on a specific region?
  • Exclusivity – Will the brand be receiving exclusivity from the influencer in this space so that they will be the only one in their category promoted? Will the influencer be locked out from seeking other contracts, and if so, will they be compensated to make that worth their while?
  • Warranties – If a brand is going to invest money into working with an influencer, they’ll want to be sure that the influencer does not have any conflicting agreements that will get them into trouble. If those issues do arise, the brand will expect compensation. 
  • Termination – What happens to the brand if the influencer decides to go on an unsavoury political rant, or makes headlines for doing something that does not align with the brand’s values? Or, what happens if the brand does something that does not align with the influencers? Will both parties be able to ‘pull the plug’ from the agreement quickly, and if so, what will the consequences be?

Final Thoughts

This is only the tip of the iceberg when it comes to influencer marketing. Both influencers and brands need to act with integrity when it comes to this sort of marketing and ensure that everything that they do is clear and above board. Not only does this help maintain legal compliance, but it strengthens the reputation of a rapidly growing business model.

We have been regularly working with brands and influencers throughout the Cambridge, Kitchener, and Waterloo region to help them establish their relationships. Influencer marketing is nothing to fear, but agreements should be drafted smartly to consider all possible situations and how they may be handled to keep relationships running smoothly. Contact us today to set up a consultation with our team. 

Pavey Law Logo

Please Note:

As of Monday, October 3, we will have a new Address:

73 Water St. N. Suite #200
Cambridge, ON
N1R 7L6