Foley’s top 10 tips for brands entering influencer marketing contracts
Foley & Lardner’s Grace Fucci explains how not to leave money on the table in the multi-billion dollar influencer marketing industry
In 2022, the influencer marketing industry was valued at $16.4bn, and that number is expected to grow to $21.1bn by the end of 2023. For brands who have not yet taken advantage of marketing through influencers across social media platforms like TikTok, Instagram and YouTube, money is being left on the table. Research has shown that marketing content created by influencers performs better and garners more engagement from consumers than traditional brand-produced advertising. As many as 61% of consumers stated that they trust product recommendations from influencers, whereas only 38% reported trusting brand-produced content.
Whether it is your first time working with an influencer, or you are part of the one in four marketers currently using influencer marketing, here are our top 10 tips for drafting a successful influencer marketing contract.
1. Clear description of the deliverable
‘Influencer marketing’ covers an expansive range of deliverables, so it is essential to specify what will best serve your brand. Are you looking for a static post that highlights an image, a short-form video like an Instagram ‘reel’ that shows the product in use, or a longer-form video review like those on YouTube? Are there specific keywords or images you want the influencer to include in the content, or a larger marketing theme you want the post to be cohesive with? The more details you can provide in writing on what the final deliverable should look like, the clearer the expectations will be. Similarly, if there are specific phrases, images, or styles you do not want included, it would also be advisable to include those visual guidelines in the language of the contract. Clearly defining the scope of the work allows the influencer to freely create within your parameters and leads to a successful collaboration.
2. Timeline and review process
As is good practice for any contract, specifying a clear timeline for the relationship is important. When do you need the deliverable by? Will you let the influencer post their content ‘live’ as they create it, or does the content need to go through an approval process within your company? Do you want the ability to review and provide feedback? If so, you will need to build that extra submission and revision time into the contract’s term. Consider also including provisions that address terminating the relationship in cases of delays if there is a specific date that you will need the content posted in advance of, such as a product launch or a store opening.
Your timeline should also make clear the duration of the relationship. Once the content is posted, how long can your brand use and repurpose it? After a certain period, is the influencer able to ‘archive’ or delete the post from their feed, or does some of the value of the relationship exist in keeping the post on the influencer’s page for future followers to see?
3. Content rights and usage
Consider drafting the contract to allow you to get the most bang for your buck: if the influencer makes a post about your product on their Instagram, can your brand include the content of that post in marketing emails, repost it to your website, or use the image in print advertising materials? Determining who owns the content is an important decision. When drafting your contract, you must decide whether the influencer owns the content and is licensing you to use it – either in perpetuity or for a specified duration – or if the influencer is granting you exclusive ownership rights over the content.
In addition to outlining the extent of your rights over using the content created, a strong contract should also include provisions addressing the intellectual property rights of both parties. For example, if the influencer uses a particularly unique and effective phrase to describe your product, are you able to trademark that language and repurpose it in your larger marketing campaigns? To avoid any ambiguity, address ownership rights and expectations in the contract upfront.
How much is the influencer’s content worth? Some contracts are based on a flat-fee and others include clauses that increase the compensation paid in relation to the metrics the content achieves. For example, the brand may provide the influencer with a certain code or affiliate link as a way of tracking how many consumers purchase the product as a result of engaging with that influencer’s content. Does the influencer need to reach a certain level of engagement to be paid? Are you incentivising them to continue to post and promote your product if the relationship is intended to extend beyond a one-time deliverable? It is also important to include payment logistics ahead of time to ensure a smooth and timely start to the work.
5. Escape plan: morality clauses
One reason influencer marketing is so effective is because influencers have distinct personalities that their audiences can connect with. However, with great personalities comes great reward – and risk. There are many instances of brands deciding to drop their spokespeople or celebrity partners in situations of bad behaviour. If the influencer you work with no longer aligns with your brand’s values, it is important you have a contractual escape route. While a standard morality clause outlining bad behaviour is a good place to start, you should also consider whether there is something essential about the influencer’s image that needs to be maintained for the relationship to work. For example, if you are contracting the influencer to promote your haircare line, it may be important to include a clause in your agreement that as a condition to the relationship, the influencer cannot shave their head or drastically change their hair without running it by your brand first.
In addition to behavioural and image-focused morality clauses, consider also whether your morality clause should address political commentary and actions. As the upcoming election ramps up, can the influencer be photographed at a rally wearing your product? Can they publicly support a certain candidate while using your product, or more broadly, while serving as your brand’s spokesperson? If consumers potentially associating your brand with a politician or politics, in general, is something your brand would prefer to avoid, get ahead of any potential issue by including political behaviour in the morality clause.
6. Confidentiality and non-disclosure provisions
If part of the relationship involves the influencer gaining access to parts of your business the public otherwise would not have access to, such as accessing your website or social media accounts, it is important to include confidentiality and non-disclosure provisions to protect that information. In the age of ‘brand takeovers’, where influencers take control of a brand’s social media channel to show a day in the life or to draw followers over to the brand’s page, these kinds of contractual protections are especially important as the influencer will be inside your company’s account and may have access to internal business analytics or customer data.
These two-way provisions are also usually necessary for you to gain access to information held by the influencer, such as their social media login information or access to their own analytics if you want to measure followers’ engagement with the content or the post’s performance metrics.
7. Exclusivity clause
Consider who else the influencer may work with. If you want the influencer to be the face of your skincare line, perhaps it would be beneficial to restrict them from taking other skincare partnerships during and immediately following your relationship so that consumers associate the influencer with only your product. A well-drafted exclusivity clause enables you to capitalise on the influencer’s recognition and is still fair to the influencer in terms of ensuring adequate compensation in place of potentially turning down additional partnerships.
8. FTC compliance
Influencers perform so well with consumers in part because of their perceived unbiased independence from the brands they recommend or review. The Federal Trade Commission (FTC) requires influencers to give their honest opinions when working with brands on endorsements. Additionally, influencers are required to clearly disclose when content is created as part of a paid agreement or sponsorship. When these regulations are not followed, the FTC can fine both the brand and the influencer for misconduct and for misleading consumers.
It is therefore essential that you ensure the influencers you are collaborating with are in compliance with these regulations. Rather than including boilerplate language stating that the influencer agrees to comply with FTC regulations, your contract should specifically list out what the influencer needs to do so that there are assurances that any content created will be in compliance. For more information on the FTC’s regulations, find a related article from the Foley team here.
9. Indemnification clauses
Smart contracting anticipates the unexpected. The influencer recommending your product is expected to give their opinion but is not necessarily expected to be an expert on the use or potential side effects of the product. For example, say you contract an influencer to promote your cosmetics line and a follower uses the influencer’s unique URL to purchase the product. If the follower has an adverse reaction, the influencer will want to be indemnified from any potential claim the follower might bring; after all, the influencer was not involved in the creation of the product. Since the savvy influencer will be sure to require an indemnification provision, you can get ahead of the request by including an indemnification clause in advance with a damages cap. How much are you willing to set aside in case the product does have an adverse effect outside of the influencer’s control and legal action is brought? A well-drafted indemnification clause will also shield your company against paying for damages caused by misuse or negligence by the influencer. It is advantageous for both parties to include one.
In the age of instant messaging and video calling, our final tip is perhaps the most straightforward: make sure your relationship is memorialised in writing and that the writing is signed by both the brand and the influencer to ensure it is enforceable and remove any ambiguity. Instead of sliding into an influencer’s DMs to request a partnership, take the additional time to solidify the relationship in a well-thought-out contract.
Follow these tips to make sure you have a strong contract that protects you and your brand. And, if you would rather leave the contract drafting to the #lawyers, reach out to the Foley team – this is our favorite type of content creation.
Boston-based Grace Fucci is an associate in Foley & Lardner’s transactions practice. She can be reached at email@example.com.