Summary
- Businesses using influencer marketing must ensure contracts clearly define deliverables, disclosure obligations, and intellectual property ownership to avoid disputes.
- Influencers must comply with Australian Consumer Law by clearly disclosing paid partnerships, and businesses can be held liable for misleading content posted on their behalf.
- Failing to address exclusivity, termination rights, and content approval processes in agreements can expose businesses to significant legal and reputational risk.
- This article is a plain-English guide to the legal considerations of influencer marketing for Australian businesses, prepared by LegalVision, a commercial law firm.
- LegalVision specialises in advising clients on e-commerce and influencer marketing agreements.
Tips for Businesses
Always use a written influencer agreement covering content approval, disclosure requirements, IP ownership, and termination rights. Confirm influencers understand their Australian Consumer Law obligations regarding sponsored content. Retain rights to remove or request amendment of non-compliant posts, and include exclusivity clauses where brand conflicts are a concern.
Influencer marketing is a form of paid social media promotion where businesses pay individuals to endorse their products or services to their followers. Unlike traditional advertising, it targets specific audiences through trusted voices online. This article will explore influencer marketing and how it can benefit your company by improving your product’s visibility to potential customers.
What Does Influencer Marketing Mean?
Some people erroneously believe that influencer marketing is another way of describing advertising through social media. Influencer marketing involves asking an individual (known as the influencer) to make social media posts concerning your products or services. So, rather than simply posting an advertisement on Facebook, you would ask an individual to post positive comments about your product or services on their social media platforms.
An Example
Let us suppose your business specialises in the production of video game consoles. In this case, you would benefit from finding a video game influencer with a sizable following across YouTube, Facebook and Instagram. Given a majority of their followers will subscribe to their video game content, any positive social posts an influencer makes about your product will hit your target audience.
Let us consider some specific advantages of influencer marketing in the UK below.
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1. Lawful Targeted Advertising
The Advertising Standards Authority (ASA) is responsible for print and online marketing rules in the UK. However, in relation to influencer marketing, their rules are relatively straightforward and sensible and include the following:
- the social media post must be accurate concerning the product or service (for example, an influencer cannot drive a car and give a false top speed);
- any written, visual or audio social media post must explicitly state that it is an advertisement if the influencer receives monies to mention the product or service; and
- the influencer must actually try the product or service before making any claims about using it.
The most common issue arises when the influencer does not expressly state that the post is an advertisement. However, this risk lies with the influencer, not the business involved. Furthermore, given the recent headlines, many influencers are now very careful to make this clear and avoid ASA fines.
2. Low Cost
Traditional advertising can be costly, whether through electronic billboards or adverts within print publications. However, subject to the popularity of the influencer, marketing by influencer content creators can be much cheaper. This can especially be the case when mindful of the targeted nature of influencer marketing.
So, for example, it is better to get your new car in front of 10 million viewers of a popular automotive review Youtube star rather than 12 million viewers of a newspaper (where only a fraction may be interested in new cars).
3. Recorded Within an Influencer Agreement
An influencer agreement is a specific legal agreement that sets the terms for an influencer marketing campaign. This document allows your company to have good control over the social media marketing strategy (and comments about your service and product) and set payment terms.
Whilst influencer agreements differ according to the exact advertising deal struck between parties, most will address some of the following points:
- which social networks the influencer will post on;
- whether the social media posts will be in written, visual or audio format;
- how many social media postings the business wishes to pay for;
- whether the instructing company will pay per post or per view (for example, some deals pay a fixed rate and then an additional fee per 100,000 viewers);
- any exclusivity terms (for instance, that the influencer agrees not to engage in the marketing of similar or rival products for three months); and
- confirmation that the influencer can only use the company’s intellectual property (usually images of the product or service) for influencer marketing and nothing further.
These restrictions help protect the instructing business whilst also giving the influencer certainty about payment terms and what the company wishes them to do.
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Key Takeaways
Influencer marketing is a vital part of modern marketing in the UK. Social media usage in the UK is ever-increasing, particularly with the rise of affordable smartphones. In this way, digital marketing through social media platforms is an increasingly effective way of getting your product or service into the eye line of millions of people.
However, it is vital to understand the obligations placed on your business by the ASA and the benefits of legal certainty under an influencer agreement. Given the need to tailor these types of agreements, many business owners will obtain legal support to ensure the marketing arrangement is airtight.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced e-commerce lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Failure to comply with advertising rules can lead to your business incurring fines and negative publicity from the Advertising Standards Authority. As such, engaging a lawyer to best protect your business is valuable.
Influencer agreements can contain wording that allows a company to put out of an influencer marketing arrangement if the influencer starts posting abusive or explicit content. Naturally, a children’s toy manufacturer will not wish to use an influencer who uses explicit language in their YouTube videos.
Influencer marketing involves paying an individual to post positive content about your products or services on their social media platforms.
It sets payment terms, post formats, exclusivity clauses, and intellectual property usage rights.
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