Influencer marketing is a powerful weapon for brands. Influencers engage with target audiences through authentic storytelling, improve brand sentiment, and so drive a successful return on investment. However, with regulatory authorities increasingly scrutinising campaigns, mitigating against potential legal, commercial and reputational damage should be considered when embarking on working with influencers on digital marketing campaigns. Gowling WLG's five-part series of Influencer 101 articles will equip you with the tools that your brand needs to ensure it's in the strongest position when approaching influencer partnerships.
Meet Gowlessence, the latest beauty brand to pop up on your social media feed. Gowlessence produces cleansers, creams and serums that its customers swear make them look good on the outside, while also making them feel good on the inside. Gowlessence's demographic is millennials that justify their indulgence on "self-care" by investing in Gowlessence's promise of organic, cruelty-free products and lifestyle.
In order to capitalise on the beauty industry's penchant for digital marketing, Gowlessence want to launch an influencer marketing campaign. Gowlessence has allocated a generous budget for this, in the hope that collaborating with influencers that already have loyal audiences will bring more eyeballs - and subsequently, sales - to the brand.
Exclusivity in influencer marketing agreements
Gowlessence invests both time and money into creating marketing campaigns with the objective of persuading consumers that its brand is preferable to that of the competition, namely, LawWow. As such, Gowlessence expects to tie the influencers into working exclusively with Gowlessence. If an influencer is free to collaborate with LawWow too, this will dilute Gowlessence's advertising campaign, making it seem less organic and rendering it less effective. Exclusivity, as with all commercial contract negotiations, will be a balancing act. The influencers will want any exclusivity restrictions to be as narrow as possible, leaving them maximum room to explore other opportunities, whereas Gowlessence will want this clause to be to the widest extent. In this article, clarity on the scope of exclusivity will be explored: what Gowlessence should push for and what it should concede on.
Gowlessence wants exclusivity over certain platforms, e.g. Instagram, but its demographic is such that Twitter isn't a concern. Consequently, Gowlessence limits exclusivity just to the platform that its audience is most active on. The prospect of new technology should also be considered. Gowlessence doesn't want a new social media platform to suddenly become popular only to find that LawWow has partnered with Gowlessence's influencers on that new platform. Gowlessence will want rights of first refusal - in other words, the first chance to decide if it wants to go ahead - on any advertorial content arrangements covering new technology.
Rather than list all the possible third party brands that the influencers are restricted from working with during the term of the agreement, Gowlessence includes a blanket category, covering a wide berth across other companies. Gowlessence, a makeup and skincare brand, limits the influencers from also working with lifestyle and fitness brands too. It also enquires as to which other brands the influencers are working or have worked with. Gowlessence wants an overall impression of the influencers to ensure that they complement its brand message. For example, it wouldn't be on-brand for Gowlessence, who don't test on animals, to work with an influencer that has recently worked with a mouse-trap brand.
Warranties and indemnities
Warranties and indemnities will be covered in detail in a later article, but, in summary, a warranty is a promise and an indemnity is compensation. Therefore Gowlessence requires the influencers to warrant to indemnify Gowlessence that they aren't breaching any existing exclusivity obligations in place with another brand - particularly as Gowlessence is aware that one of the influencers has worked with LawWow before. In the event that Gowlessence spends a lot of money on a campaign only to discover that a third party already has an exclusivity arrangement with one of the influencers, resulting in Gowlessence pulling the campaign, that influencer will have to provide Gowlessence with reasonable compensation.
Where Gowlessence wants the duration of the exclusivity provisions to be for maximum time, the influencers will want the opposite. Gowlessence should leave enough time towards the expiry of the term of its influencer agreements to get its next advertising campaign organised - so that there isn't a gap in content. Or Gowlessence may want to include the ability to extend the contract as the term nears its end, depending on how effective Gowlessence believes that the relationships with its influencers are.
Gowlessence considers which territories it wants the exclusivity to cover. This is less of a concern as the internet is borderless - however, as, for now, Gowlessence doesn't have aspirations of expanding outside of its primary territory, this is used as a bargaining tool to increase another aspect of exclusivity for Gowlessence.
Exclusivity is important for the success of Gowlessence's overall advertising strategy. By restricting its influencers from working with LawWow and other competitors, it is able to produce unique advertorial content. This, subsequently, leads to excitement and anticipation among consumers - ultimately, hopefully, driving sales.
Read the other instalments of Influencer Law 101: