What should a commercial contract include if using social media influencers for advertising?

Using social media influencers can be a powerful tool to increase sales in overseas markets. In this article, our commercial partner Lucy Pringle outlines the common pitfalls to avoid and provides the key elements a robust contract should include.

Traditionally, brands who wanted to expand their international sales had a choice of appointing a local agent to broker deals for them, sell products through a local distributor, or incur the cost and risk of setting up their own operations in new territories.

In today’s fast-paced, digital world, social media is king. One of the most effective ways to reach a global audience is by collaborating with social media influencers with an online following in your target market. They can help you leapfrog the language barrier, and the social media platforms they use may also be able to act as e-commerce sales channels.

What do you need to look out for?

First, make sure you partner with an influencer whose market matches what you are selling and whose followers fit your intended audience. Otherwise, you risk wasted investment and inauthenticity.

Next, do your homework – make sure you research the background of anyone you plan to collaborate with. Do they align with your brand values? Have they been in any trouble in the past?

Make sure they understand their legal obligations. If influencers are being paid to promote your products, local laws may require them to disclose that fact in their post (e.g. using #ad).

Always document the terms of the arrangement with a robust contract before the collaboration launches. The contract should cover all legal and commercial terms, such as payment arrangements, intellectual property rights, confidentiality, liability limits, termination rights, and which law applies to the agreement.

The contract should also give you editorial control over content. Ensure you’re able to check and amend all posts, to make sure statements are both accurate and in line with your brand standards.

Can you walk away if something goes wrong?

Unfortunately, bad behaviour by your influencer will catch media attention for your brand in all the wrong ways. Drug-taking, antisemitic remarks, violence, misleading posts – the list of ways that brand ambassadors have hit the headlines is long. That reflects badly on the brands, who come under pressure to terminate their association with the influencer, and to do it quickly.

To protect yourself, include a ‘non-embarrassment’ clause in any influencer agreement. This allows you to terminate the partnership if the influencer does something that damages your brand’s reputation. It’s important to draft the clause broadly enough to anticipate any potential triggers that could lead to ‘cancel culture’.

While collaborating with social media influencers can be an excellent way to reach a global audience, it’s critical to be aware of what can go wrong and use a robust contract to guard against that.

If you need advice on drafting or reviewing a commercial contract, please contact Lucy Pringle.

You can learn about how to have a successful relationship with distributors in her other article in this series. Read it here.