Influencer Agreements: How Brands Can Work Effectively With Influencers

by | Oct 11, 2022

Influencers may seem like an entirely new and modern approach to marketing products and building brands. However, the truth is that influencers have been around forever. They’re the person in the local pub who always knows the best-undiscovered restaurants in town. They’re the colleague who has all the insights needed to help you put together a winning Fantasy Football team. You know what styles will be trending each season because there’s always that one friend who has transformed their look long before the new fashions have hit the stores or the style pages. Yes, influencers have always been amongst us. Only in the last 10 years has influencing become a market and, as with many emerging markets, there are rewards to be gained and several pitfalls to watch out for.

The relationship between influencers and brands can be one of loyalty, admiration and respect. All too often though, poor communication, unrealistic expectations and lack of proper influencer agreements have lent to the breakdown of many influencer/brand partnerships.

If you’re a business looking to build your brand through working with influencers, then there is a good way to go about this and a bad way. LegalDrop are here to help you work effectively with influencers by ensuring your influencer agreements are clear, fair and robust.

Read our guidance below on what should be included in your influencer agreements, as well as how to build relationships and work effectively with influencers.

Do You Need Influencer Agreements?

You most probably have contracts for all your suppliers and for your client relationships too. Even if they are just standard agreed terms and conditions. You need these agreements so that you may:

  • Establish trust in your working relationship
  • Set and agree on expectations
  • Agree on fees and delivery dates
  • Know what the next steps will be if these terms are not met

Contracts protect both parties and make working together simpler since you have both been provided with a set of guidelines to follow. Influencer Agreements are arguably even more important since it’s a fairly new profession and there are many different ways of forming an influencer/brand partnership. Therefore, it’s wise to provide influencer agreements for any influencers you work with.

Influencer agreements should:

  • Be detailed and clear (no legal jargon necessary)
  • Be fair and beneficial for both parties
  • Adhere to ASA and other legal requirements for advertising
  • Include details of fee arrangements
  • Include details of how metrics are gathered if this is being used to measure success, especially if a commission is payable

Although templates for influencer agreements are available, as influencer/brand relationships are fairly new and often unique, a bespoke contract drafted by a professional lawyer may offer more specificity and protection.

What To Include In Your Influencer Agreement

Whether you are using an influencer agreement template or are using a contracts lawyer who specialises in influencer agreements, you will want to ensure your agreement has covered the following:

Expectations

Influencer and brand business relationships often fall apart because each party has a different idea of expectations. An influencer may charge a fee for a single product-related post whilst the company may be expecting thousands of sales. Or else the influencer may give an honest personal assessment of a product where the brand was expecting a rave review.

It is essential that before fees are paid, products or services are accessed or promotions begin, expectations must be set.

This begins with either the influencer or the brand laying out the details of the work that is to be carried out. This should be done within the influencer agreement and might include:

  • How many product-related posts
  • Frequency (if more than one)
  • When the posts will be made
  • The social media or other platforms that will be used
  • Content of the posts

Although it is not necessary to include in the influencer agreement, brands may want to set their expectations by finding out some basic information from the influencer, including:

  • How many people on average view the influencer’s posts
  • Any previous sales numbers from similar promotions
  • The influencers’ preferences and values

As well as considering what results might be expected, it may also be important to consider what the influencer might say about the product. Under ASA regulations, it is unlawful for an influencer to make false claims about a product or service, including whether they even liked it. Therefore, a brand may wish to look into what the influencer’s values are and what they have said about other products and services. For example, you may not choose to promote a product that has a significant carbon footprint, with an influencer who is eco-conscious. Not only could this affect the promotion itself, but since audiences of influencers tend to share their tastes and values, you will likely find they are the wrong customer base for you.

ASA Compliance For Influencers

The Advertising Standards Authority (ASA) can and will intervene if advertisements break any of its rules and regulations. Action will be taken, potentially against the influencer and possibly against you. Certainly, you are likely to have your brand reputation affected if an advert for your promotion is found to be non-compliant.

Your influencer agreement does not necessarily need to go over the stipulations of the ASA that decides whether or not an advert is compliant. However, you may want to include a clause to specify that ASA compliance is the responsibility of the influencer. In addition, it would be a good idea to read up on ASA compliance for influencers yourself.

You mustn’t be asking anything of an influencer that could lead them to break Advertising Standards. Key to this is that any paid promotion must be instantly recognisable as an advert. Any influencer using a social media post to promote your product, whether they have been paid through a flat fee, product exchange or commission, must specify that the endorsement is an advertisement.

The ASA will sanction influencers who break this rule. They have also started to publicly name influencers who consistently find themselves non-compliant.

“Our rules are clear: it must be obvious to consumers before they read, ‘like’ or otherwise interact with a social media post if what they are engaging with is advertising.”

ASA News, January 2022

Payment Terms In Influencer Agreements

Generally, there are three ways to pay influencers for their work:

Flat fee – Agree to a fixed price, usually per post or for a package of social media promotions.

Commission – An influencer can share in the profits, reaping the rewards of their talent by taking a cut of the sales that their promotion resulted in.

Product Exchange – No paid promotion but the influencer may keep the product.

Whilst commission is the lowest risk option for you because if the promotion is unsuccessful there is little or no fee, it can be more complicated. You must be able to track sales and the source properly. How you do this should be shared with the influencer and must be highly reliable because whether you have paid the fair share of commission can be legally disputed if the influencer believes the promotional sales are higher than the company has claimed.

Generally, a flat fee rate is charged by influencers with proven results, though some prefer commission-based agreements. Product exchange is more often utilised by those starting out as influencers. However, this does not necessarily mean they don’t already have a large audience and, if they do, that audience may be more responsive to a paid social media promotion from someone who doesn’t do it too often.

However you decide to reward your influencers, this should be included in your influencer agreements. A contracts lawyer will be able to guide and advise you on what would be considered fair and reasonable legally.

Exclusivity Clauses

If an influencer promotes your product one week after promoting a similar product, you may find that your sales are less as a result. This is a key reason why some brands insist on exclusivity. Exclusivity in general terms means that an influencer would not be able to work with competitive brands, or products. It does not mean they only work with one brand but usually that they are prevented legally from promoting similar products, much like a non-compete clause in an employment contract.

Usually, there are time frames regarding exclusivity, so it may be over a 6 month period, or else more, or less. Exclusivity clauses must also be quite specific so there is not too much room for interpretation. However, they must also be fair to the influencer as they are effectively freelancing and need to be free to accept most other work. Brands can expect to pay more when introducing an exclusivity clause in an influencer agreement.

Exclusivity clauses need to be reasonable for both parties and must be carefully worded so there is clarity. For this reason, many brands that opt for exclusivity have a professional contracts lawyer draft the agreement in this case.

Influencer Agreements For Businesses

There are many benefits to hiring a lawyer to draft an influencer agreement for your business. You can ensure your agreement is unique to your business and the relationship you wish to have with the influencer. You will also be assured that the agreement is fair, robust and legally secure. A good lawyer may also be able to advise you on inclusions and stipulations you may not have thought of.

Legal Drop offer two services that help businesses with influencer agreements. The first is drafting an influencer agreement and this includes:

  • A 30-minute consultation with a lawyer
  • A professionally drafted agreement to use with one named influencer
  • A tailored contract drafted for your business and the influencer

Find out more about professional influencer agreements.

Alternatively, if you already have an agreement, you may prefer to have one of the contract lawyers on our legal services platform review this for you.

Find out more about Reviewing Legal Documents.

 

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