Business development · 2 May 2017

Influencer marketing: An essential guide to celebrity product endorsement

Influencer marketing
Brands use influencer marketing to target potential customers through specific individuals using a product

Bringing his marketing law series to a close, Grid Law founder David Walker explains the mechanics of product endorsements and provides a how-to guide to running a lawful influencer marketing campaign.

Anyone scrolling through their social media feeds, especially Instagram, can’t help but notice the huge rise in “influencer marketing”. This isn’t surprising given the fact that we’re now seeing strong evidence that it works really well.

However, the big problem with it is, that not everyone is playing by the rules. Celebrities such as Rihanna, Kim Kardashian and a whole host of other non-celebrity influencers have been accused of not making it clear when they are being paid to endorse a product.

Now, you may think that this is their concern, but it’s not. As the business owner, you are ultimately responsible for everything the influencer says about your business. This is because influencer marketing is recognised by the ASA (Advertising Standards Authority) as a form of affiliate marketing.

Therefore, the CAP Code (the rule book for non-broadcast advertising and marketing) applies to it and if you breach this, you could be in trouble.

Not only would you receive adverse publicity (the complete opposite of what you were trying to achieve), you could find that search engines are asked to remove your offending content from their results and the matter could be referred to Trading Standards to take further action.

Running an influencer marketing campaign

So, before entering into an influencer marketing campaign, what issues should you be considering?

First, you must ensure that it’s absolutely clear that the content produced by the influencer is an advert.

We’re influenced by what our friends, family and general peer group say when making purchasing decisions so, when someone we follow on Instagram or Twitter raves about a product, we take notice.

When this happens in a blog, or in a social media post it’s not always clear whether they genuinely love a product or whether they are being paid to endorse it.

To avoid any confusion, blogs should specifically say if the influencer has been given the products for free, or if they are being paid to write about them. Where space is limited in social media posts a hashtag such as #ad should be used.

However, where a number of hashtags are used, or where content must be expanded to be viewed, it mustn’t be hidden. It must still be clear that this is an advert.

Once it’s clear that the content (or even just part of it) is an advert, it must then comply with all of the other advertising rules. Not least it must be legal, honest, decent, truthful and not misleading in any way.

When influencers have a commercial relationship with the brand owner, or have been given the products for free they shouldn’t be giving the impression that they have bought the product. This is clearly misleading and in complete contravention of the CAP Code.

Influencers usually produce their own content, in their own way and in their own style. This is what makes influencer marketing appear more authentic and appealing. So, as the business owner how do you control what is said about your products?

Do you just trust them?

Well, the influencer is going to want to be paid so you will have some sort of contract with them, even if it’s just a handshake. (For more information on this, see my previous article – Does a handshake form a legal binding contract?)

You could make the contract a little more formal and include some guidance as to what is expected of them.

The contract should also make it clear that they must comply with all advertising rules and regulations and if they don’t, they’re in breach of contract which gives you the right to sue them, or simply withhold their payment.

However, you don’t want to place too many restrictions or constraints on the influencer or the campaign will lose its authenticity and appeal.

Another danger to protect yourself from is when an influencer falls from grace after posting unacceptable content online. If this happens it could have a negative impact on your brand, so you will need to be able to sever all ties with them.

You also need to protect yourself commercially. Think about the return on investment you’re expecting and how you’re going to assess this.

Paying for reach may be risky if you’re working with a non-celebrity influencer and you’re unaware that they have bought the majority of their 100,000 followers.

If they’re not true, engaged fans of the influencer they’re not going to listen to what they say and so are unlikely to buy your products. So, rather than a fixed fee, you may wish to have some sort of performance based payment.

My final point is that the influencer will not be your employee. They will be a freelancer so they will own all of the intellectual property rights in the content they produce.

If it’s really good and you want to be able to reuse any of it elsewhere, you will need their permission to do so. Therefore, your contract with them should give you this right.

If you have any legal questions about influencer marketing or engaging an influencer to promote your business, email me at editors@businessadvice.co.uk.

Catch up on the rest of David Walker’s series covering all aspects of advertising law:

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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