You may have the impression that only the ‘coolest’ brands work with influencers. That it’s all about gadgets, beauty products and fashion accessories. The truth is, all sorts of businesses use influencers to help promote their products and they’re not all being marketed to under-30s hipsters, although admittedly quite a few are.
The point is influencers have always existed - they used to be that person in the office who everyone went to for restaurant recommendations. Now they’re on social media potentially reaching audiences of millions. They are trusted advisors, allowing their followers to save time on research because the products the influencer rates are generally the ones their followers will also covet. Whether that be tech, services, cosmetics, travel, homewares or almost anything else. There are all sorts of influencers of different ages and interests, working with all sorts of businesses.
Influencer partnerships and agreements can be highly effective. However, they can also be risky. As with most marketing endeavours, there is no exact science and sometimes the conversion rate can be difficult to predict, which makes working with influencers challenging.
There are 5 legal considerations when working with influencers:
Advertising Standards Authority (ASA) Compliance
Setting Expectations
How You Will Measure Campaign Success
Payment Terms
Exclusivity Clauses
Having a proper and robust influencer agreement in place will not only protect your business but may also increase your chances of success when working with influencers.
Let’s look a little more at those 5 key Influencer Agreement considerations:
ASA Compliance
Anyone engaged in advertising has a responsibility to ensure they are compliant with the Advertising Standards Authority (ASA).
The CAP Code, supported by the ASA, refers to a set of rules and regulations that influencers must follow to remain compliant. Key to this is ensuring that any paid promotions must be immediately recognisable as an advertisement. This includes mandatory use of the hashtag #ad on social media, but also other stipulations that can be found in this Influencers Guide To The CAP Code.
Although it may technically be the influencer who breaks ASA rules because they are promoting your product or service you may find that this could damage your reputation. It may even be assumed that it was the brand who requested the influencer not declare the post as a paid promotion. Therefore, it may be wise to include a clause in your Influencer Agreement that the influencer should be ASA-compliant in all publicity associated with your brand. Not only does this highlight the importance of ASA compliance with the influencer, but it also protects your brand.
Paid promotions should be immediately clear, whether the promotion is in the form of a blog post, a social media post or any other medium. Partnerships should be stated clearly in posts labelled as paid promotions or adverts. The general guidance is that any individual post should be recognisable as an advert without the viewer needing to search the related content or scroll through the ‘small print.’
Expectations When Working With Influencers
Setting expectations when working with influencers can be difficult but it’s really important. Open and honest communication is essential. It better allows brands to estimate how much engagement they might get as a result of working with a particular influencer.
Brands will be looking to work with influencers whose followers reflect their target audience. No matter how influential a social media promotor may be, they will likely only be able to encourage those who might already consider buying your product. An effective marketing campaign will ensure a company’s products are promoted in spaces where their ideal customers already are, which is why Saga Holidays don’t advertise on Tik Tok (where the average users are mostly 18-24-year-olds). Therefore, it’s important to ensure your target audience and your influencer's followers are aligned. That’s not to say that you cannot use influencers to bring your products or services to a younger, older or otherwise more diverse audience, but expectations may be adjusted if doing so.
With the various success stories and general buzz around influencer marketing, it can be easy for a brand to believe working with an influencer will have an immediate impact on sales but this isn’t always the case. Social media audiences, in particular, are unpredictable and so any marketing drive comes with risk. However, knowing an influencer’s general reach, follower demographics and past paid promotion conversion rates can help with forecasting and with setting expectations.
Measuring Campaign Success
Before you enter into a partnership with any influencer you should have a plan for how you will measure the success of campaigns. This would start with setting out what the goals are and then putting in place a process for tracking these. You may choose to focus on impressions on the promotion (how many people see it), on engagement (usually clicks through to the given link) or on conversions (sales). Most brands will measure all three points so they may follow the user journey from exposure to the product up to the decision to buy. Having a high amount of views and click-throughs but a low number of sales could point to a problem with the landing page or the product price. Whereas a high number of impressions but few click-throughs could suggest that the product does not appeal to the influencer’s followers. However, a low number of impressions may lead you to question the timing of the promotion or the influencer’s reach, which may deter you from working with the influencer again.
Although measuring campaign success will not have an impact on the results, knowing the outcome of each campaign will help you to develop your strategy and improve your return on investment (ROI) in the future.
Measuring campaign success is essential if you’re paying an influencer on a commission basis. How you intend to measure success does not necessarily need to be included in your Influencer Agreement, unless you are using this data to determine the commission that will be paid to the influencer. In this case, you should be clear about how you intend to track the campaign and which metrics will be relied upon to calculate payments you'll make to the influencer.
Payment Terms For Influencers
Generally, there are three ways to work with an influencer:
Flat Fee
A flat fee payment structure would be an agreed-upon fixed fee for an agreed-upon promotion or campaign. The Influencer Agreement should stipulate the number of posts and the mediums for these posts. Flat fee structures are arguably the fairest and simplest arrangement for both parties and can be fixed on a per-post basis or collated as a total for a series of posts.
Commission-based Influencer Agreements
A commission-based Influencer Agreement is arguably the lowest risk for the company since the influencer will only receive payments based on sales derived from their promotion. Reliable metrics gathering is essential if paying influencers commission to ensure they are fairly paid for the buying influence they have had and so you're assured it's their promotions that have led to sales.
Product Exchange
Gifting free products or services, including free travel, experiences or hospitality, is another non-financial way of attracting and rewarding influencers. This is usually a payment structure used by smaller brands in partnership with less experienced influencers. However, this also depends on the value of the products or services being offered as payment. A luxury holiday provider offering a five-star holiday in return for a series of social media posts tracking the experience can attract influencers with a very high following.
Payment Terms In Influencer Agreements
However you choose to reward your influencers, this should be laid out clearly in your Influencer Agreement. Most businesses will have a professional Commercial Lawyer draft their Influencer Agreement to ensure payment terms and conditions are properly laid out.
Exclusivity Clauses
One thing you'll want to consider when working with influencers is who else they’re working with and what else they’re promoting. This can serve as guidance for whether they will be able to effectively promote your product. Influencers achieving success with promoting items or services similar to yours have a proven track record. However, there’s a difference between an influencer working with other brands with shared audiences and working with direct competitors.
If an influencer is already working with a competitor of yours then this could negatively impact your sales, being that their audience has already been exposed to a similar product. Likewise, you would not want an influencer under contract with you, promoting competitor products.
Exclusivity clauses in an Influencer Agreement are common and highly recommended. Usually, they stipulate that the influencer be unable to work with competitor brands or products during their contract with you and also for a set amount of time after. Exclusivity does not mean the influencer can only work with you, just that they must not promote similar products or services.
Exclusivity clauses need to be reasonable from the influencer’s point of view and not prevent them from accepting most other work offers. However, they also need to be specific and clear and have a set time frame. The proper drafting of an exclusivity clause is another strong reason to have a professional lawyer provide your Influencer Agreement.
My Final Word On Influencer Agreements
Professional influencers care about contracts. Despite the relative newness of the industry, or perhaps because of it, there have been a fair amount of stories of informal arrangements going wrong. Especially because of the failure to disclose promotions in line with ASA regulations due to the influencer-brand relationship being unofficial. Robust Influencer Agreements protect both the influencer and the brands they work with. They can help to ensure that the brand gets the exposure desired and that its products are not promoted alongside rival items. Furthermore, it ensures proper payment structures and time scales are laid out, as well as expectations on how and when products should be promoted.
For an Influencer Agreement that provides both protection and clarity, get in touch and let's talk through the legal considerations when working with influencers.
