Want an influencer to promote your business? Put it in writing.

Every day an increasing number of companies use influencers to promote their products to consumers. Whether it be a sponsored post on Instagram, ?a clever and trendy video on TikTok, or a “traditional” Facebook post, influencers can greatly increase a brand’s visibility by marketing its content to, potentially, millions of consumers. While the most high-profile influencers have their own agents and corporate structures to handle their media requests, many other influencers handle these affairs by themselves, and the services agreements they provide (if any) can be a massive liability to your business.

You might think that this is just a lawyer’s anxiety, as we are known for trying to plaster every last detail of an agreement in writing.?However, the misconduct (to be gentle) or downright sloppiness of an influencer’s promotion of your brand can make you liable and may result in civil penalties against your business. For instance, under the Federal Trade Commission’s (FTC) Guidelines for Influencers (the Guides Concerning the Use of Endorsements and Testimonials in Advertising), , any post for which an influencer is getting paid (or receives any type of consideration) must be disclosed as an ad or paid sponsorship. ?The consequences of failing to do so, may be serious. For instance, in March of 2020, the FTC announced it had reached a settlement requiring a tea brand to forfeit one million dollars as a penalty for allowing its influencers (Cardi B, no less) to promote the brand without disclosing that they were doing so as part of a paid partnership.

In order to avoid hefty million-dollar fines, companies should sign written agreements with the influencers they hire. Moreover, these agreements, at a minimum, must include language which clearly establishes the influencer’s obligation to comply with FTC Guidelines. They should also include language meant to hold the company harmless, should an enforcement action by the FTC result.

Companies should also consider the possibility that influencer posts may results in intellectual property infringement.

Imagine that your hired influencer’s post discloses that they are posting as part of a paid partnership (success!); however, said post makes use of third-party video clip and a Metallica song (and elder millennials know just how much Metallica loved unauthorized downloads). As a result, the copyright owners of both the video and music could pursue legal action against the influencer for copyright infringement. Additionally, they could also pursue legal action against your brand under the theory that the infringing post was a joint effort, and one where you, the brand, benefited monetarily. To avoid this scenario, you want to ensure that your written agreements with influencers provide that their posts must be clear in their representations as to ownership or license of the content they use. It would also be useful to include an indemnification clause, and, depending on how big the influencer is, you should even consider pushing for insurance coverage in your favor.

While it is true that lawyers want to put everything in writing, the fact is that we do it for a reason; we know how bad it can get when you don’t. Influencer advertising is here to stay, and if you want your company to thrive under this marketing style, make sure to have a thorough contract at hand when you reach out to influencers.?