As many brands know all too well, with increased use of influencer marketing comes increased regulation and press exposure (unfortunately, not always for the right reasons). As such, it's never been more important to set out ground rules for any influencer collaboration in a watertight agreement and ensure both parties are covered by appropriate legal protections.
The beauty and personal care industry has been no stranger to the accelerating influencer marketing trend, and this year has been no exception. Indeed, after an "unprecedented" year, "unprecedented" statistics are emerging indicating a dramatic uptick in sales of self-care and skin-care products throughout the pandemic, with a significant proportion of ecommerce sales being attributable to influencer marketing.
These findings were recently demonstrated by L'Oréal confirming to the Financial Times, that it has increased the share of its marketing spend on digital media channels from 50% to 70% since the start of the pandemic.
The benefits for brands in collaborating with influencers are compelling: the potential to tap into pre-existing audiences, opportunities to convert loyal followings to loyal customers, cost-effective content with high engagement rates, greater visibility and granularity of audience reach data, real time feedback on collaborations and returns on investment, opportunities to align brand ethos and values... the list goes on.
Yet issues surrounding transparency and legal compliance are starting to signal possible challenges for the industry.
Just as one good influencer post can result in the success of a new product launch, one bad press story resulting from influencer failures can just as easily achieve the opposite and have a lasting detrimental effect on brand image.
The increasing scrutiny on influencer marketing is becoming noticeably more prevalent and a quick look back over the last year alone, flags multiple instances of complaints to the Advertising Standards Authority (ASA), breaches of the CAP Code (UK Code of Non-broadcast Advertising and Direct & Promotional Marketing) and brands suffering bad press as a result. GHD had the recent misfortune of this exact problem, when the ASA upheld a consumer complaint in respect of an influencer who failed to flag that their posts marketing GHD products were marketing communications and which attracted attention for all the wrong reasons.
The unfortunate reality is that these are likely to be the first of many ASA rulings and negative headlines, as the monitoring and regulation landscape continues to accelerate concurrently with the expanding use of influencer marketing.
Given influencer partnerships continue to resonate with consumers and prove a lucrative revenue stream, what can brands do to help themselves going forward?
Brands will naturally be keen to avoid bad press, achieve legal compliance, protect their brand and manage risk. As such, the key for any influencer collaboration is to get the deal written down in black and white at the outset, and put in place formal contractual provisions which the influencers must comply with, to ensure legal protection.
As a starter for 10, we suggest the following central issues be considered in formalising any collaboration:
- Duration – consider whether the brand will want the arrangement to run for a minimum term in order to be able to assess the impact of the endorsement on sales. The benefits of any minimum term should be balanced against the possibility of wanting to draw the relationship to an end if it does not prove viable, or if the influencer goes off message. Perhaps look to incorporate flexibility to extend the term by agreement if the collaboration goes well.
- The services – a description of the services and commitments being provided by an influencer will sit at the heart of the agreement. To maximise how effective this is and avoid disagreements later down the line, brands and influencers should have detailed two-way conversations about what will be involved, and ensure that the services are scoped out in as much detail as possible. For example, specifying the minimum / maximum length of posts, timing of posts, platforms on which the posts will be placed, the content of the posts and any key deliverables etc.
- Obligations – whilst balancing brand objectives against an influencer's creative freedom will always be key, ensuring that an influencer does not make claims or omissions that breach regulations or mislead consumers is crucial. Including provisions spelling out exactly what is and is not acceptable from the start will help this. For example, restrictions in respect of the use of filters and other image editing apps will be of particular importance in light of the #filterdrop campaign and recent ASA rulings against ads from Skinny Tan Ltd and We Are Luxe Ltd (both of which featured beauty filters which altered skin tone and were found to exaggerate the results that products can achieve, thus misleading consumers). Also, influencers need to clearly state when something is an advert, so this fundamental point needs to be included.
- Intellectual property rights – the brand will want to be really clear about how the influencer uses the brand's trademarks as well as who owns the rights in the content produced by the influencer. Given the lifespan of that content is typically relatively short it is generally fine for the influencer to retain ownership but the brand will want the right to use that content for marketing purposes (both online and offline) for a certain period. Additionally you should be clear that both parties have the right to store the content indefinitely as the practical reality of social media posts is that they are generally not deleted.
- Exclusivity – consider whether the brand will want to / is able to restrict the influencer's rights to engage other competitor beauty brands during the course of the partnership. If the arrangement will be non-exclusive, could the agreement detail the influencer's existing contracts for similar brand ambassadorial services and oblige the influencer to inform the brand before it commits to any new contracts?
- Damage limitation – whilst it may not be at the forefront of anyone's mind at the outset of an exciting collaboration, the agreement should account for when things go wrong. Will the agreement: detail provisions requiring an influencer to notify the brand if they receive complaints about a post, reserve rights to amend or remove content at the brand's request if an influencer posts something which the brand does not want to align with, and include financial remedies / indemnities where breaches occur owing to a failure to follow brand instructions?
- Help them to help you – we also suggest providing supporting social media guidelines, brand objectives and comprehensive briefs from the start of the relationship which, amongst other things, detail any key messages, permitted statements and instructions on preferred use of the brand's name and IP. Consider sharing helpful resources such as the ASA's useful "Influencers' guide to making clear that ads are ads" which summarises advertising requirements and stresses that "just because an ad is covered by the CAP Code, this doesn't mean it's a problem – it just needs to follow the rules".
In summary, a comprehensive and considered agreement should be the foundation on which to build the relationship and should act as a key risk management tool. Getting it right will allow brands to reap the rewards by protecting the business, ensuring a positive brand-influencer relationship and avoiding losing favour among consumers. It also helps to preserve the all-important relationship of trust and honesty between a brand and its loyal customers – something which takes time to build, but can be quickly lost.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.