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The Legal Side of Influencer Marketing: Contracts, FTC Guidelines, and More

Updated: May 28

Welcome to the amazing world of influencer marketing. Legal complexity is growing with this dynamic industry and for both influencers and companies, being aware of the legal implications is crucial when attempting to collaborate.


For the sake of your campaigns' smooth and lawful operation, we're going to dive into contracts, FTC regulations, and other legal essentials today.


The Legal Side of Influencer Marketing: Contracts, FTC Guidelines, and More

Table of Contents


Understanding the Basics of Influencer Marketing Contracts

Every influencer partnership is based on an influencer marketing contract. It basically states what is anticipated of each side. These agreements must specify in detail:


Deliverables

  • Type and Number of Posts: Specify whether the content will be blog posts, Instagram stories, tweets, etc., and how many of each type.

  • Content Requirements: Outline expectations for the tone, style, and any key messages or hashtags that must be included.

  • Platform Specifications: Detail on which social media platforms the content should be posted.

  • Approval Rights: State whether the brand has the right to pre-approve content before posting.


Due dates

  • Campaign Start and End Dates: Clearly define the campaign duration.

  • Posting Schedule: Include specific dates or time frames for when posts should go live.

  • Milestone Deadlines: If applicable, set deadlines for draft submissions, content review, and revisions.


Methods of payment

  • Payment Amount: Detail the total compensation and any conditions that affect it.

  • Payment Schedule: Outline when payments will be made (e.g., 50% upfront, 50% upon completion).

  • Payment Method: Specify how payments will be made (e.g., direct deposit, PayPal).

  • Performance Bonuses or Incentives: Include details of any additional compensation for exceeding KPIs or engagement targets.


Circumstances for contract termination

  • Breach of Contract: Conditions under which the contract can be terminated if either party fails to meet their obligations.

  • Mutual Agreement: Terms under which both parties can agree to end the partnership amicably.

  • Force Majeure: Clauses that allow for contract termination due to uncontrollable circumstances such as natural disasters.

  • Notice Period: Required notice time before termination and the method of notification (e.g., written notice).


Exclusivity

  • Exclusivity Terms: Specify if the influencer is restricted from promoting competing brands or products during the term of the contract and potentially for a period afterward.


Intellectual Property Rights

  • Ownership of Content: Define who owns the content created during the campaign (usually the brand or shared).

  • Usage Rights: Specify how long the brand can use the content, in what contexts (e.g., just on social media or also in print advertising), and whether the influencer retains any rights to use the content for their own purposes.


Confidentiality

  • Non-Disclosure: Include clauses that prevent the influencer from sharing confidential information about the brand or campaign details.

  • Privacy Obligations: Outline how both parties must handle sensitive or personal data in compliance with privacy laws.


Indemnification

  • Liabilities: Include terms where the influencer agrees to indemnify the brand against losses due to the influencer’s negligence, misrepresentation, or non-compliance with the contract.


Dispute Resolution

  • Governing Law: Specify which state's or country's laws will govern the contract.

  • Arbitration and Mediation: Outline processes for conflict resolution, typically through arbitration or mediation before any legal actions.


Clearly stated information may help avoid misunderstandings and shield both sides in the event that things go wrong.



Navigating FTC Guidelines for Influencer Marketing

Establishing rules to guarantee openness in influencer marketing is the Federal Trade Commission (FTC). In November 2019, the FTC re-released a set of social media rules for influencers to assist ensure that sponsored postings are properly identified and follow applicable endorsement regulations. You can find the official guidelines here.


The secret is disclosures, plain and easy. Should an influencer and a corporation have a commercial link, it must be made abundantly evident and easily understood by the audience. To save you time, we summarized the FTC guidelines for influencer marketing for you below:

The Value of Disclosure

Influencers have to reveal any financial, professional, personal, or familial ties to companies.

Even non-financial incentives like freebies or reduced prices need for disclosure.


When to Make a Disclosure

When there is any link or kind of payment with a brand, always declare it.

Even in cases where the influencer feels their evaluation is objective, disclosures should be given. Make even little endorsements, likes, tags, and pins, public.


Method of Disclosure

Make sure disclosures match the endorsement message and are difficult to overlook.

Steer clear of disclosures near the conclusion of articles or videos or in locations that call for further clicks. Spell things out clearly and simply, such "ad," "sponsored," or "Thanks to [brand] for the free product." Disclosures may be included in both audio and video of videos or superimposed over pictures in visual material. Occasionally, in live transmissions, reiterate revelations.


Extra Instructions

Influencers cannot recommend something they haven't tried.

It is required to provide honest reviews - influencers cannot say a product is nice if it is not.

Steer clear of unfounded statements, particularly those that need scientific validation.


Legal Obligation

Influencers should read the Endorsement Guides from the FTC.

FTC rules include influencers in the United States and, if their following includes American customers, may also impact those posting from other countries.


Additional Materials

Influencers may understand and abide by endorsement regulations with the aid of the FTC's wealth of examples and tools.


For further details and direction, go to FTC.gov/influencers.



International Laws Impacting Influencer Marketing

There might be variations in the laws depending on the country of your partnership takes place. To control influencer marketing, for example, the UK utilizes the Advertising Standards Authority (ASA) whereas the United States has the Federal Trade Commission. Should your efforts span national boundaries, it is essential that you be aware of these differences.


legal influencer contracts, ftc guidelines and more

Lessons from Legal Disputes in Influencer Marketing

It is imperative that we learn from previous errors. Think of the situation where a well-known company neglected to require proper disclosure, which resulted to heavy penalties and a PR catastrophe. These actual situations highlight the need of doing your homework.


Best Practices for Legal Compliance in Influencer Marketing

Following these best practices allows for that your influencer marketing campaigns are both effective and legally compliant:


  • Regularly Review Contracts: Always double-check the details in your influencer contracts before signing.


  • Stay Updated on Legal Changes: Laws and regulations in influencer marketing can evolve, especially concerning privacy and consumer protection.


  • Maintain Open Communication: Establish a clear line of communication with your influencers about compliance. Regularly update them on any changes in legal requirements and ensure they understand the importance of adhering to these standards.


Final Thoughts

Influencer marketing legal issues should not be intimidating to navigate. Your marketing initiatives may be both successful and legal if you have the correct information and resources. All set to go forward or need particular legal counsel? Please do not be afraid to ask for qualified assistance. Cheers to legally aware marketing plans that protect your name and standing!

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