How Legality bounds Influencer Marketing

Let’s talk today about how legality bounds influencer marketing.

Every commercial business is bounded by legality & influencer marketing is no special.

I will be taking an example of US based legality for influencer marketing.

I have chosen FTC because I felt its very simple to explain, very clear & advanced legality surrounding influencer marketing.

In the coming posts, I will be taking other country legality examples & how it impacts influencer marketing industry.

FTC stands for Federal Trade Commission & it was established in 1914.

Why should Influencer marketing industry should comply with laws of FTC?

1. Because it’s the law of the land & its mandatory
2. When an industry & its players are compliant with laws, it creates a sense of trust, safety, inspires transparency & confidence among all industry players.
3. If as an industry player if you are non-compliant then you run the risk of getting sued.

To whom are the laws of FTC applicable?

It’s applicable to Brands aka Advertisers, Ad – agencies, Influencers & Representatives of Influencer.

As an influencer you are required TO DISCLOSE your commercial transactional relationship with the brand or agency for any product or service endorsements you do on social media.

So, what are the commercial transactions that an influencer needs to disclose?

There are multiple of commercial transactions take place between influencer & brand/agency.

It could be Cash | Product kit given by brand | Services offered by brand | Promocodes | Coupons/Deals | Gift cards | Contests | Sweepstakes.

When influencers become consumers where they actually purchase product/services & have no agenda to commercially promote, they are okay to not disclose & can post on social media as organic content.

As influencer, it’s important to be authentic in their promotional posts, should not give any fake/misleading claims, should use the product/service, should have certain degree of expertise & should not oversell/exaggerate in their promotions.

Influencer should disclose?#ad,?#sponsored?#[Brand]partner in their promotional posts. They can additionally use hashtags such as?#sweepstakes? #contest ?#paid & even tag brands in their posts.

Influencer should not use any shortforms in hashtags such?#collab?#sponsy?in their posts for disclosure.

If influencer fails to use disclose hashtags, as their audience please remind the influencer to disclose their promotional nature of posts & use hashtags.

Also, influencers should read social media platform guidelines on disclosures before promoting posts.

On social, there are multiple formats to promote it, please ensure that you disclose accordingly – Text overlay in the story or in the caption in the second/third line.

When influencers sign brand deals, it’s important that they should read brand contract & even understand the ask of the brand very objectively.

It is advisable that influencers can hire lawyer to help them with nitty gritty of legalities.

There are several types of agreement in contract. Let’s try to understand it in brief.

• Brand service agreement – It’s all about deliverables/required disclosures/legal clauses.
• Non-disclosure agreement – It's about confidentiality about company’s product before/during or even after the promotion. It’s usually applicable in new product launches.
• Ethical commitment agreement – It’s about reputation of a brand. Please don’t badmouth intentionally or unintentionally about the brand online/offline.
• Assignment agreement – It’s about transfer of ownership of Intellectual property rights from existing owner to new owner. It’s usually applicable in whitelisting posts.
• Licensing agreement – It’s about assignment & use of IPR for definite period of time but there is no transfer of ownership.
• Morals clause – It’s about mutual indemnity. So, if by chance any controversies/damages happen to brand for a breach of contract, both brand & influencer are obliged to pay to the third pay who raised the breach.?
• Fraudulent Follower Trigger clause – Follower buy outs/ usage of engagement trails/usage of bots, a brand can sue the influencer legally for breach if found usage in the promotional campaign.
• Right to approve/reject content - In stated events, brands reserve this right
• Exclusivity – When brand signs the deal with an influencer, for a certain period of time an influencer before or after cannot sign any deal or competitor deal. Usually, the period is 3 days before or after the deal. It can go to 1 week or even 2 week before/after deal.?Influencers can here negotiate for the payment of non- advertise of other brands during this period.
• ·Termination clause:?Conditions & timings are clearly defined for both the parties to terminate the campaign.
• Payment conditions - Credit period & Disbursement of payment are defined here. Credit period can be of 7/15/30/60/90 days. Disbursement of payment depends on the negotiation of the influencer with the brand – it could be 50: 50,25:75,40:60 or any other combinations before/after the deal. The credit period starts once the influencer raises the bill.

Influencers specializes in content & content amplification with the audience but most influencer don’t know the business & legal side. Being a serious influencer is like running a media company. So, all influencers don’t become very commercially successful & common reason is attributed to their lack of legal & business knowledge.

Most contracts are usually one-sided contracts where brands remain safe & liability of breach is mostly on influencer for any breach. If you are a serious influencer, you need to know the basics of legality & to up the game, get your brand contracts reviewed by lawyer & thereafter get the contract amended by brand or even you submit your own addendum to brands to make it legally safe for you.?

#legal #legalcontracts #influencermarketing #influencermarketingagency #influencer #creatoreconomy

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