Every type of agreement has its own tricks and traps. The contract made between the advertiser/brand and influencer is a unique agreement. There are several issues you should pay attention to when you are signing one. One of the most obvious and top-priority provisions include the influencer’s services in detail and compensation. In this article, we will not talk about them but other things that should not be ignored.
Depending on whether you are an advertiser or an influencer, some of the other provisions are more important to you. Although in an excellent agreement there aren’t any unimportant clauses, some terms are always more central. In this article, we will share 5 clauses that we think should be carefully formulated in an influencer agreement.
LEGAL COMPLIANCE – WHO NEEDS TO FOLLOW THE LAWS?
Depending on the jurisdiction, the brand is also responsible for following the relevant regulation if the influencer does not. For example in Finland that is the case. In most jurisdictions, the advertiser has a duty to inform the influencer about the relevant legislation, such as consumer protection and marketing laws.
Falling foul of the relevant laws puts you on the risk for sanction and negative publicity. For example, in many jurisdictions, it has been made clear that using only the social media platform tool to mark commercial collaboration is not sufficient.
We recommend using a clause that requires the influencer to acknowledge and comply with the relevant laws, regulations and soft law instruments in your jurisdiction. It is good practice to include a written guidance that has the relevant legislation and guidelines that needs to be followed.
It is important to bear in mind that being in compliance with relevant legislation benefits both parties of the influencer agreement. In today’s world, ignoring legislative obligations and requirements in social media influencer marketing campaigns can be hazardous for both the influencer and the brand.
Consumers are fully aware of the sponsored content on social media and they don’t generally like if they see advertisement that is not clearly disclosed as such. Non-compliance with legislation affects negatively on the influencer’s and brand’s reputation. Making sure legal compliance is in the top priority for parties should, therefore, be highly important for both parties.
Do not forget to include writing about following the terms and conditions of each platform and not infringing others’ intellectual property rights.
CONFIDENTIALITY – WHO HAS TO BE HUSH-HUSH?
Social media influencer agreements often contain confidentiality provisions to protect sensitive information both parties may learn during the agreement’s term. For example, the brand might launch a new product or tell other sensitive information to the influencer. Often it’s also in the advertiser’s interest to keep the influencer from sharing the terms and conditions of the influencer marketing campaign.
It can also be that the influencer discloses to the brand something that they want to stay confidential, for example about their metrics. Quite often the writing of confidentiality provision is such that it only obligates the influencer. If two-way confidentiality is desired by the parties, pay special attention to the writing of this clause.
Usually, unless there is a large quantity of confidential information, a separate confidentiality agreement is not necessary to broaden the scope of the protection provided by a well-drafted confidentiality provision. On the other hand, a separate non-disclosure agreement might be needed if confidential information is shared during the negotiations before signing the final contract.
Remember to decide whether the confidentiality will survive expiration or termination of the agreement. Sometimes the confidentiality obligations should only survive for a certain period after termination of the contract, and if that’s the case, it should be clearly stated.
SCOPE AND OWNERSHIP OF INTELLECTUAL PROPERTY – WHO OWNS WHAT?
There is a lot of intellectual property (at least copyright and trademarks) related to the influencer agreement. The brand owns intellectual property, for example its’ trademarks. The influencer will usually be creating content for the brand and owns the copyright for that unless nothing else is agreed. Sometimes the influencer has trademarks, perhaps their own name is trademarked, and the brand can not use it without a license.
Therefore, negotiating the scope and ownership of intellectual property is a huge part of the deal. From the influencer’s point of view, assigning the copyright ownership of the content that has been created is not very alluring – unless the compensation is very good. The brands don’t often want to pay that much extra for owning the copyright. That’s why it’s quite usual to agree upon licensing the copyright to the brand.
From the brand’s point of view, the license should be as extensive as possible. It’s good to consider where they want to use the posts, photos and names: only “repost” on social media or also on other platforms, such as in print? Pay also attention to the time the license is valid.
Sometimes the brands forget to permit a license to their logo and other trademarks. From the influencer’s point of view, in that case, there is a risk that the brand could accuse the influencer of trademark infringement if something goes wrong. From the brand’s point of view, it is never good practice to allow anyone to use your trademarks and logo without a license.
EXCLUSIVITY – WHAT ELSE CAN BE PROMOTED?
Influencers are loved and respected for their authenticity. Part of that authentic image is engaging with several brands and products. Their followers value their opinions which is the point of using them in marketing campaigns and collaborations.
In the influencer’s interest is to be as unlimited as possible when it comes to choosing brands they work with. Of course, working with two or several competing brands from the same sector is not good for the influencer’s creditability either.
From the brand’s point of view, an influencer-led campaign may easily lose its effect if the influencer goes on to promote a competitor’s brand or products not long after. Many nasty disputes are caused because of not including an exclusivity provision in the contract. However, negotiating about exclusivity may be hard and expensive when dealing with the major influencers. Micro-influencers are more willing to agree on exclusivity.
It is good to say explicitly in the influencer agreement what is prohibited: name the direct competitors and define similar products or services. Don’t forget to set a time limit for this obligation.
When drafting an exclusivity clause, make sure it’s in compliance with relevant laws.
TERM AND TERMINATION – WHAT HAPPENS WHEN THE CAMPAIGN IS OVER?
Normally the relationship between the influencer and the brand is not meant to be eternal, and in any case, it never will be. Even if the co-operation is for longer time, there should still be provisions about the term and termination.
In the brand’s interest is to obtain strong termination rights for reputational damage, failure to comply with applicable legislation and breach of the terms of the agreement.
If the advertiser sets special success results, the influencer needs to be very careful that they understand what is actually expected from them. The measures of success need to be in clear writing.
One important thing to consider related to the termination is survival of other clauses in the contract. Which provisions shall still apply after the termination? Think especially confidentiality, exclusivity and ownership of the IP.
HOW CAN VEDINOR HELP YOU?
If you are dealing with influencer campaigns and need help with contracts, we are more than happy to assist and advise you. We bring to the table the following combination: our profound understanding of this unique form of marketing, an in-depth understanding of social media and how different platforms work, and a sound legal experience. If you are interested in our influencer marketing related services, please schedule a free consultation, email us at email@example.com or reach out to our Partner, Legal Counsel Anne Nyström directly.