Instagram has become a major social media platform. Millions of people use it every day to share their lives through photos and videos. Instagram influencers are those who get paid to promote brands or products on their accounts. But it is important to deal with questions such as, how much should they charge and under what terms? That is where an Influencer Agreement comes handy!
The Influencer marketing industry is set to grow to approximately $16.4 Billion in 2022 and influencers can be key workers in promoting your brand via social media platforms such as Instagram, Tiktok, YouTube or Twitter. No matter if you want to collaborate with micro or mega-influencers, the need of a contract is essential and beneficial for both parties to set clear metrics on the rights, obligations and expectations of the parties and also to create a transparent relationship.
There are thousands of Instagram influencers out there, and each one has his/her unique style. Some prefer to post only photos, while others focus on video and stories. Some are even paid to post sponsored content.
It’s important to note that these influencers are not employees of the company paying them. They are independent contractors who are free to choose whether or not to accept a job offer from a brand. In some cases, influencers may have other clients as well, so there is the potential for conflicts and further disclosures might be needed.
So that both parties can get the maximum benefit, a proper legal contract should be put in place. Such an agreement would cater for things such as:
- Provisions about the mechanics – what platform(s), how often, what type of media?
- Payment – how much, when, and on what basis?
- Terms & Conditions – what is expected from the influencer, and what will they get in return?
- Confidentiality – how can the brand ensure that the information shared with the influencer remains confidential?
- Intellectual Property Rights – how does the brand protect its intellectual property rights?
- Liability – how will the brand or influencer deal with any liability issues (defective product or defective promotion)?
- Indemnification – if the influencer gets into trouble, who will pay for damages?
- Brand guidelines – what kind of content should the influencer post? Is raunchy content ok? Or should it be kept more family-oriented?
- Brand conflicts – what other brands does the influencer represent? Are these brands in competition or in sectors that are mutually exclusive (such as baby care products and gambling)?
- Social Media Policy – how will the brand handle negative comments posted by followers?
- Endorsement policy – what type of endorsements should the influencer provide
- Copyright issues – what happens if, for example, the influencer uses images/videos to promote your product without permission?
- Breach – what happened if any of the key terms are breached? Is there a right for damages and do these extend to loss of profit and/or goodwill or reputation?
- Termination – how long can the influencer work for the brand? What happens if the relationship ends amicably or contentiously?
The above list is just a sample of the many things that need to be considered when creating an effective Influencer Agreement; however, there are other less obvious provisions crucial to the influencer contract which are regulatory in nature and non-compliance may result in negative publicity and/or fines. Already the Advertising Standard’s Authority has expressed its intention to carefully monitor influencer arrangements for potential breaches of advertising standards. It’s best to consult your lawyer or a professional business consultant to draft a document that suits your specific situation.
The best way to find an influencer is by using platforms like Instagram. You can search for hashtags related to your product or service and see which influencers are posting content around it. If you want to hire someone specifically, you can look at their follower count and engagement rates.
The influencer agreement must clearly state the responsibilities of both parties. For example, the influencer must ensure that all content posted by him/her is original and authentic. He/she must often disclose that compensation is received from a brand or advertiser (although the amount does not necessarily need to be disclosed).
The influencer agreement should also outline the payment structure. This includes details like the number of posts required per month, the rate at which he/she gets paid, and the duration of the contract. It is advisable to pay influencers based on the value of the followers they generate rather than the number of likes or views. An alternative, which is not always acceptable to the influencer, is to pay based on sales achieved through the influencer. That said, often this is hard to track and the influencer might not want to be remunerated in such a way.
As mentioned earlier, influencer agreements vary depending on the type of account being run. However, most influencer contracts usually last between 6 months and 1 year.
If you are looking to hire an influencer, here are some tips to help you find the right person:
- Look for someone who has already been working with your target audience. You can do this by checking her/his profile. If you see lots of posts related to your industry, then she/he is probably worth hiring.
- Be clear about what kind of work you want done. Are you looking for a blogger, vlogger, photographer, or something else entirely?
- Check if the influencer has any current clients. If yes, then consider asking them about the quality of service provided.
- Make sure that the influencer has a strong social media following. A large following means more exposure for your product or service.
- Ask the influencer how much time she/he spends on each post.
Finally, make sure that the influencer is easy to reach out to. You can check this by contacting the influencer directly via the social media platform which typically has the ability for direct messages, and then setting up follow-up communication through email or phone.
Influencer marketing is a great way to promote your business online. However, it is important to have a solid legal agreement in place before signing up an influencer. Otherwise, you might end up regretting your decision!
TYPES OF CONTRACTS WE HAVE CREATED FOR OUR CLIENTS
Depending on your situation, we can help you to get the best terms and relationship. There are many variables and no relationship will ever be the same, but, the following are some of the most common types of agreements used by influencers and the brands that hire them:
- Exclusive Promotional Services Agreement (EPSA): This is the standard agreement used by most brands. It covers all aspects of the relationship between the two parties, including payment, exclusivity, etc.
- Non-Exclusive Promotional Services Agreement (NEPESA): This is similar to an EPSA but doesn’t cover exclusivity. Instead, this agreement provides more freedom for the influencer to work with multiple brands at once.
- Content Creation Contract (CCC): This is a variation of the NEPESA where the influencer agrees to create original content exclusively for the brand.
- Product Placement Contracts: These are used when products are placed within the influencer’s video or story.
- Sponsorship Agreements: These are usually created when the brand wants to sponsor a contest or giveaway.
- Collaboration Agreements: These are typically used when the influencer works with another person or brand. The collaboration could be anything from posting videos together to working on a project together.
- Agency Agreements: These are contracts that allow the influencer to act as an agent for the brand. For example, they might represent the brand in social media forums, conduct research, etc.
- Referral Program Agreements: These are often used by eCommerce sites. The influencer receives a commission whenever someone purchases through his/her referral link.
- Consultancy Agreements: These are used when the influencer offers advice or guidance to the brand. They are also called “coaching” agreements.
- Consulting Agreements: Similar to consultancy agreements, these are used when the influencers offer their services to clients other than the brand.
- Merchandise Placement Contracts: These agreements are used when products are sold directly to consumers via online stores like Amazon.
- Partnership Agreements: These are long term relationships where both parties have equal rights and responsibilities.
- Joint Venture Agreements: These are agreements that combine the efforts of two different companies into one venture.
- Licensing Agreements: These are very broad agreements that give the right to use the influencer’s name, image, voice, likeness, etc. for any purpose.
- Rights Management Agreements: These are similar to licensing agreements except that instead of giving the right to use the name, image, voice etc., the company only gives permission to use certain images, videos, or audio clips.
- Social Media Accounts Agreements: These are the agreements that govern how the influencer manages his/her social media accounts.
- Brand License Agreements: These are extremely broad agreements that give the brand ownership over the influencer’s identity.
- Digital Distribution Agreements: These are mostly used by TV networks to distribute their shows online. In this case, the network owns all the copyrights and distribution rights, and the influencer has no rights at all. However, if the influencer signs such an agreement, he/she will receive compensation based on the number of views the content gets.
We would be happy to discuss with you which is the best way forward based on your unique circumstances.