Influencer Agreements: What Are They & When Do You Need Them?

Brand managers are entering into agreements with social media influencers to promote the value of their brands. These arrangements are commonly known as Influencer Agreements. Influencer Agreements explore and measure quantifiable ways expectations can be met for how owners of popular accounts on social media can be compensated for endorsing the products and/or services of particular brands.

As the market for influencer campaigns has increased, the Federal Trade Commission (FTC) has taken a closer look at these types of business dealings. The FTC is the federal government agency tasked with protecting consumers from deceptive advertising and unfair trade practices. As a result, the need for well-drafted Influencer Agreements has increased. Well-crafted requirements tempered by the FTC’s guidlines will help Influencers, their followers, and associated brands.

Influencer Agreements can be one-off engagements or can establish guidelines for a longer campaign over a variety of social media platforms. The length and complexity of these agreements will be determined by where the business relationship in this continuum lies.

It is important that Influencer Agreements include the following points so that both parties are satisfied when the timetable of deliverables is met:

  • Who controls content? Will Influencer retain the rights in the content?
  • Image specs? “The Influencer must post five or more original lifestyle photos (no stock photography) in their sponsored posts.”
  • Copy Content? The Brand will provide copy bullet points for the Influencer to rephrase and incorporate into the campaign.
  • Are tracking links/codes included? Brands will include tracking links and promo codes for the Influencer to incorporate into sponsored content.
  • Dedicated or Non-dedicated? The Campaign should differentiate between “dedicated” and “non-dedicated” sponsorship—dedicated posts, won’t include other brand name mentions. On YouTube videos that are dedicated, Influencer promises to only mention the sponsoring brand in the video.
  • Previews prior to posting? Brand should set preview expectations, deadlines, and schedules to review/approve subsequent posting.
  • Will content created be cross-promoted on other social channels? Both Influencer and Brand should clear up expectations concerning social media campaigns on other platforms.
  • Length of campaign? Both parties should agree on a campaign schedule and the period of exclusivity for content. Influencer will cease working with or mentioning brand competitors for a specified time.
  • Payment terms? Both parties should agree on payment logistics and timing of payments.
  • Industry custom contract clauses? Both Brand and Influencers will accept contract clauses that are standard within the industry such as a non-disparagement clause.
  • Brand and Influencer will agree on content ownership, licenses, copyrights, and other intellectual property rights.

The FTC requires that influencers disclose any content that is advertisements or brand sponsored marketing materials. Disclosures of advertising and marketing materials by influencers must be clear and conspicuous. The placement of the disclosure is important in determining clarity. Disclosures in close proximity to the claim made by the Influencer are often deemed clear and conspicuous. Other criteria to determine if a disclosure by an Influencer is clear and conspicuous include whether scrolling is required to tie a disclosure to a claim, whether disclosures are displayed before the decision to buy, whether disclosures are written in simple language, and whether hyperlinks containing disclosures are correctly labeled.

Examples of FTC Guidelines for sponsored content on social media include:

  • Hashtags for use on Instagram can include #paid #spon, #sponsored or #ad. These help consumers distinguish between paid posts and opinion.
  • Language for use on sponsored blog posts, include “sponsored by,” “brought to you by,” “thanks to” or “in partnership with,” serve to disclose sponsored content. Additionally, sponsored blog posts can be labeled as “sponsored” or “collaborations.”
  • Disclosure on YouTube videos can involve, stating the sponsor (whether visually, verbally or both) at the beginning of the video and including a sponsorship statement at the top of the video properly informing consumers of the sponsorship.

The following Instagram post demonstrates how hashtags can be used to disclose sponsored content:

A post shared by Dianne Erika ? Mom Blogger (@momsjourneytoforever) on May 23, 2017 at 10:50am PDT

Following FTC Guidelines are important for assuring that consumers are aware that social media influencers are being paid for the content they are featuring. Ensuring that influencer sponsored content is differentiated from influencer opinion reinforces the integrity of the online marketplace, which is where an increasing amount of commerce transpires. It is in the interest of both influencers and brand managers to comply with FTC guidelines to avoid harsh oversight by the government and a loss of consumer confidence by the public.