Solicitor Fiona Kingscott, a contract specialist at Langleys Solicitors, unpicks the nebulous and often unregulated world of influencer marketing and explains what you can do to protect your brand.
Influencer marketing has grown significantly in recent years, with some brands now paying celebrities huge sums to advertise their products. Or they may work with small-scale niche social influencers, offering smaller payments or gifting clothes, make-up or haircuts, in exchange for a review.
While this kind of marketing is certainly powerful, it is important that businesses (and their agencies) understand the regulations governing it, so they can protect the brand from financial and reputational damage. This is why I’d urge anyone working with influencers to have a written contract in place, clearly setting out the rights and obligations of each party.
What are the rules?
All UK advertising is regulated by the Advertising Standards Agency and the Competition and Markets Authority – and influencer marketing is no exception.
Social media and blog posts are considered an advert, and therefore subject to the CAP Code, if brands pay for them in any way and they have some sort of control over it.
The second point is important because influencer marketing sometimes looks like PR. You send an individual a product, or invite them to a restaurant, hoping they will publish a positive review. As is the case with journalists, you may have no control over what or when they post, or even if they post at all.
But it is worth underlining that control does not necessarily mean paying for a post. While influencers have the freedom to publish what they want, you still have control if you check their posts before publication, tell them how many they must post and/or what to include.
The CAP Code says an ad may not be misleading, inappropriate or make claims that are unsubstantiated.
Even if the brand has no control over the post, if it is paid-for, even via the gifting of a product, it must comply with consumer protection law, so must not be misleading. It should be clear that the post is paid-for, and influencers cannot imply they personally bought a product when it was gifted.
It is up to influencers to state whether a post is paid-for – for example, using a hashtag #ad or declaring sponsorship.
The ASA has published a handy document, An Influencer’s Guide to making clear that ads are ads, which explains the rules in more detail.
Why should brands have written contracts with their influencers?
If an influencer breaks the advertising rules, they can be investigated by the ASA – which might ask them to remove or edit the post. An investigation or ruling will potentially harm their reputation as a credible figure, but what does it mean for their brand partners?
Apart from any reputational damage by association, businesses could take a serious financial hit if a paid-for ad has to be removed. Influencers may also:
- Break the law (e.g. copyright)
- Become someone you no longer want the brand to be linked to
- Work with a competitor
- Refuse to allow the brand to re-use their posts and testimonials, claiming they own the copyright in them – which they will do if there is no written agreement to the contrary.
The best way for businesses to safeguard themselves is with a signed contract, which sets out the rules of the partnership. It should define what the influencer will do in return for payment, sometimes state they cannot work with a competitor (even after the contract has ended) and specify who owns copyright on posts and pictures.
Remember that influencers are often just members of the public who have found success online – so, unlike professional journalists, they may not be aware of copyright issues, nor publish to deadline.
A legally-binding contract, drawn up by a solicitor, makes it easier to manage any disputes and claims because without a single written agreement, all communications between the influencer and brand (or agency) form part of the agreement.
As a final note, written contracts are not just for brands – they offer protection to influencers too. Wherever possible, they should ask for a signed agreement that specifies payment terms and enables them to define clear guidelines and objectives.
Source: Langleys Solicitors