Social Media Influencers and Brands

Qasim Ali

Published by
Qasim Ali

19th February 2020

Businesses and brands (Brands), as part of their wider online strategies, are now more regularly engaging (often for payment in kind) “social media influencers” or online personalities (Influencers) to post promotional content on their social media channels. The engagements of Influencers may be on one-off or a longer ‘retained’ basis and can cover all of an Influencer’s social medial channels or only some of them.

The practice is not free from criticism but for those Brands that do decide to enter into such relationships what particular matters should be kept in mind before and during negotiations and when drafting any agreement?

Prevention is better than cure
Research on the Influencer should be carried out before any agreement is entered into. Brands should ensure that the prospective Influencer has no history of acting, and is unlikely to act in future, in a manner inconsistent with the Brand’s values which may risk damaging the Brand’s reputation by the association. Agreements can be drafted to be terminated on such events but the damage may already have been done by that point.

Similarly, where the Influencer is not exclusively engaged and is entitled to promote other brands then the Brand will want to ensure that these other engagements are consistent with its image and values. The Influencer can be required to notify the Brand in advance before agreeing to any other engagements.

Guiding the Influencer
If there are Brand social media guidelines in place, these should be provided to the Influencer beforehand and incorporated into any agreement. These can set out the detail of the Brand’s values as well as subjects to avoid when posting. This may help in ensuring that the Influencer is clear on what is expected from him or her and what the Brand is seeking to achieve from the relationship.

The guidelines can set out the Influencer’s degree of creative freedom and this may negate the need for a formal approval system on a post-by-post basis which may be administratively burdensome to operate.

Whose Copyright is it anyway?
Copyright will be one of the key matters to be agreed between the parties and is where a written agreement would be required.

The law of copyright is complex and the terms and conditions of each social media platform would have to be considered, however, in very basic terms the Influencer will usually be the owner of the copyright arising from any content posted under the agreement. The Brand will want to have as much control over the content as possible and so typically will require the copyright in the content to be transferred to it. This can only be done in writing.

Brands may need to secure rights from third parties in cases where the Influencer is not actually the copyright owner of the content.

Influencers may also have moral rights in the content which they have posted. These cannot be transferred and so Brands will usually require that the Influencer waives these rights under the agreement so that it has full editorial control over the content.

A licence to the Influencer’s so called image rights should also be granted to the Brand. This would permit the Brand to use, for example, the name, image and signature of the Influencer in connection with promoting the relationship.

Concerns about the transparency of Brand-Influencer commercial relationships has led to particular attention by the Committee of Advertising Practice (CAP) and the Competitions and Markets Authority (CMA). Updated guidance to Influencers was published earlier this month by the CAP and CMA and Brands should be aware of and understand this guidance.

Brands should ensure that Influencers comply with all applicable laws, codes and guidance when posting content to avoid an adverse ruling against the Brand following a complaint to the Advertising Standards Agency, for instance.

In particular, Brands should specify how content is to be labelled as an advertisement within the social media guidelines. Influencers should not be allowed much discretion here: “#ad” is perhaps the industry standard whereas the Influencer simply “tagging” the Brand or thanking the Brand may not be sufficient.

Calling time
Brands will typically not wish to enter into an indefinite agreement with an Influencer and the agreement should specify a date on which it is to terminate. However, a right to renew the agreement or an automatic roll over of the agreement can be included.

It is of the utmost importance that a Brand has the ability to end its relationship with the Influencer on some period of notice or, where there is a risk of reputational damage to the Brand, immediately. The Brand will wish to be the sole judge as to what would damage its reputation but the agreement can provide non-exhaustive examples.

On termination, the Brand will want to ensure that the Influencer stops associating itself with the Brand or its products and removes all past promotional content from its online platforms if requested to do so by the Brand. Termination mid-way through an agreement may require consideration in respect of payment to the Influencer. In particular, where the payment was in kind and was by way of a particularly expensive item then the Brand may wish for a proportionate payment by the Influencer on termination.

The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at February 2020. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.