These days, everyone is doing it for the ‘gram. But those who are doing it well are also doing it for coin. Influencer marketing is a pervasive and persuasive type of marketing. By collaborating with influencers, brands are able to directly promote to their target demographic. By collaborating with brands, influencers are able to monetize their cache more immediately. Simply put, influencer marketing has democratized a new category of celebrity. In some instances, the side hustle becomes the main hustle. Of course, there are legal issues that should be addressed as influencers expand into a business. This article provides an overview of some of the legal issues that should be addressed.
1. Negotiate your Influencer Marketing Agreement
A brand-influencer collaboration is governed by an influencer marketing agreement. It is important to ensure that the expectations and obligations between the parties are clearly delineated, compensation is addressed, curated content is agreed upon, etc. In some instances, where the influencer is taking on a brand ambassador role, or where the product/services is more complicated, additional commercial terms should be addressed such as product liability, indemnification, morality provisions, etc.
2. Abide by Influencer Marketing Laws
In the past few years, governments have increasingly recognized the pervasiveness of influencer marketing and, as such, have issued out protocols, laws and white papers confirming that influencer marketing campaigns must abide by domestic marketing laws. In fact, last year, the Canadian government issued a statement confirming that the Competition Act, which governs federal marketing practices, does apply to and govern influencer marketing campaigns. Thus, it is important for both brands and influencers to ensure that their influencer marketing campaigns abide by the specific governing laws.
3. Abide by Laws Regulating Competitions and Contests
Oftentimes, brands will rely on influencers to held spread the word about a brand’s particular contest or competition. It is important to note that in Canada, contests and competitions are regulated by the Competition Act and also possibly the Criminal Code. Ensure that your contests are onside of the law.
4. Comply with Digital Marketing Laws
With any social media campaign, oftentimes a digital email marketing campaign assists with spreading the word. It is important to note that compliance with Canada’s Anti-Spam Legislation is important.
5. Structure Your Business
At Froese Law, we love helping entrepreneurs…but there’s a distinction between having a side hustle that has traction and a hobby. We view our entrepreneur clients as empires in the making. Incorporating your business is a wise and prudent first step to building that empire. Not only will it protect your own personal assets from risk, there may also be tax benefits to take advantage of.
6. Protect Your Brand
In consumer facing industries, brand is key. In fact, arguably, it is the most important corporate asset. The influencer may have his/her own brand and the type of work out may have a brand. Brand strategy and protection is key. Trademarks and copyright laws will become a critical tool in protecting the brand.
7. Negotiate your Commercial Agreements
Much like raising a child, it takes a village to build an
empire. That means that a number of different third parties will be
involved in various different aspects of building your empire. Here’s
just a sample of some of the players: investor, web developer, photographer,
social media strategist, agent, app developer, sponsors, brands using your
platform for influencer marketing, etc. As your business grows, the
opportunities should also grow in a multitude of ways that increases the
profitability of your business.
Negotiating and entering into written commercial agreements that apply to the business nuances of the third party relationship is critical. Examples of the types of agreements include non-disclosure agreement, independent contractor agreement, sponsorship agreement, shareholders agreement, agency agreement etc.
Important considerations should be given to term, termination, performance milestones, confidentiality, indemnification, representations and warranties, etc.
8. Curate and License Your Content
Content is king and there are a number of ways to monetize the content. This is done through licensing. As an example in the fitness influencer world, creating a signature style of working out, branding that style and then licensing it to already established brands can be very lucrative (think: “Zumba”). Creating a personal brand that translates into a lifestyle brand creates the ability to merchandise the brand beyond fitness (i.e. fitness clothes, supplements, water bottles, fitness equipment).
Bottom line: think big and diversify the reach of the brand to generate multiple revenue streams. But know that building a robust intellectual property portfolio and negotiating a comprehensive licensing agreement are foundational to this.
9. Establish Permanency through Merchandising
For the visionary influencer, the end goal for the influencer should be to eventually pivot from collaborating with third party brands to building its own product line using its own brand. Ultimately, a successful empire has to have a home: a place where consumers go to engage with your empire. In today’s world, there are so many permutations: a downloadable app, a book, a travelling photography exhibit, a brick and mortar store, an e-commerce store, a multi-faceted online profile. The options are endless. Depending on the permutation, there will be a number of legal considerations.