Stuart Price, head of commercial law at Lodders, shares some insights for businesses considering engaging a brand ambassador or social media influencers.
In the 1970s and 1980s, identifying celebrities used to be quite straightforward: film stars, pop idols, TV personalities and sporting heroes. Everyone knew who these people were, and what brought them their fame. As a consequence, celebrities were often courted by large brands to endorse their goods and services.
Fast forward to the 2020s and times have changed. You will have had to have spent the last ten years living on a remote island with no internet connection to have missed the meteoric rise of the “social media influencer”.
With TV and radio advertising revenues falling year on year and a significant change in buyer behaviour in younger generations, many companies are seeking to tap into influencer marketing.
At Lodders, we are increasingly being asked to write contracts for clients who wish to align themselves with influencers for the purpose of both general and targeted marketing campaigns. Some of these contracts take the form of one-off endorsement deals, but often influencer agreements (or Brand Ambassadors agreements as they are also known) are quite often long-term deals, particularly where the person is to become the “face” of a brand.
The essence of such agreements is that an influencer will agree to post promotional material about a company’s goods or services, in return either for payment of fees, or payment in kind by way of products or services.
So, what should you consider when it comes to working with influencers?
For companies thinking about working with a brand ambassador, here are some of the most important aspects to consider.
Do your research (your ‘due diligence’) on any prospective brand ambassador before entering into an agreement with them. History of behaviour that is inconsistent with your company’s brand values, should raise a warning flag that the association could damage the company or its brand’s reputation. Disputes could also arise where there is a conflict between the company’s goals for the campaign and the ambassador’s own expectations about their personal freedom to express themselves. It would be a sensible idea to confront these issues during the due diligence stage.
Is the relationship exclusive or non-exclusive? This works both ways. While a company might not want their brand ambassador to promote the products or services of competitors, equally, the brand ambassador may not want to be one of a number of people associated with your brand, particularly if part of their reasoning for doing this is to increase their own personal profile.
How long should this relationship last? Is it just to endorse one specific product for a period of time, or is the relationship one whereby the ambassador is called upon to promote the brand in numerous ways over longer periods of time?
Even if the relationship is to be non-exclusive, should there be some restrictions on the brand ambassador working with other companies? For example, a company that engages its ambassador to promote sports or fitness products may not appreciate the same ambassador extoling the virtues of a fast-food restaurant.
Have you set out clear expectations with regards to what is expected of the ambassador? The more precise the agreement, the easier it will be to measure their performance, so that any issues can be addressed before the relationship deteriorates.
Your company may also want to use footage of the ambassador’s own video content where the endorsed products or services are mentioned. You should obtain assurances from the brand ambassador that it owns the intellectual property rights in the footage and gives permission to the company to use the footage. Furthermore, the ambassador should be invited to waive its moral rights in relation to any footage it has created to enable the company to use it without later interference.
Not all influencers are adults and companies may find that they want to engage young influencers. Children can enter into contracts, but there are complicated rules surrounding the enforceability of those contracts. Careful thought will therefore have to be given as to how a company may mitigate the risks inherent with these contracts.
What should a business include in an influencer or brand ambassador agreement?
Some examples of what an influencer agreement should contain might be as follows:
A restriction on making any claims as to the properties, functionality or other qualities about the endorsed product or service which the company itself would not give.
A restriction on the ambassador making any disparaging or pejorative statements about the endorsed product or service or the company itself.
An obligation to inform the company about any criminal convictions or other complaint raised against them, and of any actual or likely press speculation about them or their personal or business affairs.
An obligation not to endorse a competitor’s products or services.
How the company can use the ambassador’s name and images in its own marketing and promotional materials.
Entering into commercial arrangements with Influencers is now a key aspect of many brand owners’ marketing strategies. However, as with any contractual relationship, there are many things to be considered and documented to ensure a successful working relationship.
If you require bespoke advice in relation to your specific project, our expert solicitors can assist you. For more information, or for an initial chat, please get in touch with Stuart Price, head of commercial law at Lodders, using the form below.
Our answers should not be considered as formal legal advice as the background of any situation may affect the advice that we give.
Stuart is a partner in Lodders’ Corporate and Commercial team. He is an expert in commercial law and regularly advises clients on commercial contracts (including technology and media contracts) intellectual property and data protection issues.