The first part of this article discussed corporate social responsibility (CSR) and how brands and businesses should be mindful in forming partnerships.
In building an influencer partnership, being reactive, as well as proactive, is key. Respond to potential partners that reach out to you while proactively researching potential partners with whom you would like to form a relationship. Have concrete ideas about what you would want to gain from such a relationship before entering it.
If this sounds a bit like dating (or online dating), that is not surprising. A brand-influencer partnership is, quite literally, a relationship that requires investment. In considering how best to invest, also consider which influencers on which platforms are most likely to be able to reach your consumers and form authentic, credible connections with them.
Avoiding Legal Pitfalls
While influencers gain credibility and influence from forming authentic relationships that do not appear to be tools of traditional advertising, it is important to remember that traditional advertising laws and regulations do apply to influencers — including that advertisements and sponsored posts must be designated as such and cannot masquerade as spontaneous praise for a brand when that is not the case. It is strongly recommended (and, indeed, legally mandated) to clarify to consumers when an influencer is in fact posting an advertisement or sponsored post, even if that appears to cost some authenticity or credibility or take on the guise of a traditional ad. Using hashtags such as #ad, #advertisement, #sponsored, or #sponsoredpost can make clear the existence of advertising/sponsorship without tipping the scales too far into the traditional advertising realm.
Brands and influencers should also expect that any claims made by an influencer could be construed as advertising claims that are subject to regulation by federal law and law enforcement agencies. Brands should understand that an influencer’s claim about a product or service could be attributed to the brand as though the brand made the claim itself. It is imperative to evaluate claims and potential claims in advance, to look under the hood to confirm that claims are literally true and do not have potential to be misleading and to have backup data for any comparative claims.
Both brands and influencers should also stay abreast of changes in the rules — not only FTC and advertising rules, but the rules set by the social media and other web platforms on which the influencers operate. In particular, brands and influencers should stay abreast of FTC Warning Letters. Compliance is key, especially in brand-influencer partnerships when the actions of one partner can (and often are) imputed to the other partner.
While many brands and influencers prefer not to negotiate long-form contracts to govern their brand-influencer relationship, contracts are in fact a solid solution to avoiding potential legal pitfalls and a souring brand-influencer relationship.
In entering into a written contract, you are not planning for failure but planning to exit a literal relationship with grace, dignity and minimum conflict. Like influencing itself, contracting between brands and influencers should be a collaboration..
Brands should involve their legal departments. While legal often has a reputation for being a barrier to getting deals done, a thoughtful and business-minded partner can help both parties avoid legal pitfalls while ensuring consistency of workable deals that do not violate the law. For example, the legal department (or trusted outside counsel) can advise as to the use of disclaimers, conduct due diligence of past posts and other relationships, highlight required terms and spot potential compliance issues. Legal will also consider such matters as proper trademark usage and content ownership, which is extremely important in advertising. Indeed, content ownership and trademark usage are issues that have caused brands and influencers to walk away from potential partnerships before they’ve begun.
Other red flags, especially for influencers, entail control — control over the products to promote, the posts to make, the claims to make and frequency. Discuss these topics in advance in order to avoid disputes over them later. Discuss how compensation is calculated. Non-monetary compensation should be in the discussion as well (e.g., travel, expenses, gratis items, etc.).
In particular, do not fail to discuss the brand’s level of control in terms of prior approval rights for posts, removal rights for posts and correction rights for posts that may contain an error. This is particularly important for claims subject to regulation by the FTC or subject to scrutiny for potential false advertising.
Finally, do not fail to discuss termination. A trial period or a short-term agreement may be appropriate. Both parties may benefit from the option to terminate the agreement for any reason.
Christiane Campbell is a partner at Duane Morris and can be reached at email@example.com. Victoria Danta is an attorney at Duane Morris and can be reached at firstname.lastname@example.org.