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As suggested in an earlier article of this five-part series, … competition across brands has neither decreased nor decelerated. Social media postings featuring endorsements by so-called “influencers” are often key components of contemporary brand activations and are considered indispensable. Unfortunately, due to no fault of their own, personnel of in-house marketing departments and agencies are not always well suited to readily identify and handle business and legal affairs issues related to the hiring of influencers for social media applications. The present article is the fourth in the aforementioned series and concerns the engagement or hiring of corporate or individual endorsers, sometimes known as “influencers.”
About the Author:
Kurt R. Klaus, Esq., is a Partner at the law firm of Dunlap Bennett & Ludwig, PLLC, where he heads the Media/Entertainment Law section. Kurt regularly functions as lead attorney on domestic and international transactions involving many of the world’s leading media companies and provides creative and practical guidance with related legal and business strategies. He has been legal counsel to top world brand corporate marketing and social media departments, television networks, content production companies, musicians, and music composers. Prior to practicing law, Kurt produced television commercials, was an executive in two mid-sized media production and distribution companies, and earned a Master of Science degree in Communications (Advertising Emphasis). KKlaus@DBLLawyers.com, www.DBLLawyers.com.
Engagement of Influencers:
Today’s brand activations ever more utilize influencers, i.e., endorsers who prepare and publish content in order to influence consumer perspectives, perceptions, and purchase decisions. While such tactics support agile marketing opportunities, there likewise arise concerns: (i) brand control risks and (ii) state and federal consumer law compliance.
It is important for advertisers to understand that they can be held responsible not only for their own actions, but also for those actions or omissions of endorsers/influencers and agencies whom their brands engage. Challenges can be initiated by federal regulators and state Attorneys General (under state Unfair Deceptive Acts and Practices statutes), self-regulatory bodies (e.g., National Advertising Division of the Council of Better Business Bureaus), competitors, intellectual property owners, celebrities, advertising watchdogs, and consumers, … among others. Our focus in this article will be limited to a few key contract concepts brands and agencies should consider when hiring influencers.
When engaging an influencer, there is much more to consider than the number of followers or the extent of their celebrity. For example, marketers should not only consider whether a particular influencer has previously worked with a competing brand, but also whether- moving forward- the marketer would be comfortable with that influencer working with competing brands. Contractually, these interests may be covered using terms and warranties that provide assurances that the influencer has not in the past been engaged by competing brands (it’s very helpful to actually list competing brands in the contract) and that the influencer will not, for a reasonable period of time following the publication of the influencer’s deliverable, become engaged by competing brands.
Additionally, because the services provided by an influencer are personal and unique in nature, and compliance and brand control issues can arise, an influencer should be contractually prohibited from assigning or delegating their engagement contract (in part or in full) to a third-party. After all, it is that influencer the brand engaged, and it is that particular influencer who must reflect their own honest opinions, findings, beliefs, or experience in relation to the brand, product, conduct, or service as required by the FTC. Consistent with this, influencer engagement agreements must comply with the Consumer Review Fairness Act (CRFA), which prohibits contract provisions that: (i) disallow or restrict the influencer’s ability to review the brand, product, conduct, or service; (ii) impose a penalty or fee against the influencer for their review; or (iii) require an influencer to give up their intellectual property rights in the content of their reviews.
Although the CRFA provides these protections to influencers, brands may be generally allowed to evaluate influencer content for legal compliance, to both avoid intellectual property issues and ensure non-disclosure of confidential information. When engaging with influencers, brands should contractually maintain the right to reject and to demand takedown or removal of content that infringes rights of third-parties, is otherwise unlawful, or contains inappropriate, indecent, or obscene material.
Compliance with applicable state and federal laws pertaining to online publication of brand marketing content is a very doable, yet potentially complex, undertaking. If you are involved in the distribution and media content related to brand marketing and have questions concerning any of the information provided in this advertisement message, please contact Kurt R. Klaus, Esq., at Dunlap, Bennett & Ludwig.
Kurt R. Klaus, Esq., Dunlap Bennett & Ludwig, PLLC, KKlaus@DBLLawyers.com, DBLLawyers.com.
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