In this new economy of content creators we see how much of the investment in advertising and marketing has shifted from traditional channels to influencers (Tik Tokers, Youtubers, Instagram, etc.). In turn, this democratization of advertising has led to new players entering this market, sometimes without as much experience in dealing with contracts. Therefore, we expose a series of points to analyze in the contracts, to avoid problems seen in other cases.
1. Management of expectations (quality) and metrics
Unmet quality expectations. One of the main risks is that the content does not meet brand expectations in terms of quality or alignment with brand identity. To mitigate this, the contract should include detailed descriptions of the type of content expected, the tone and style, and sample publications. This will prevent either party from being dissatisfied by either not delivering what is expected.
Metrics: This can be looked at before and after. Before to really know the reach and audience to be reached, and after to really see the scope of the activities carried out, since the brand does not have access to that data. We recommend defining the metrics to be analyzed.
2. Payment method and bonus
How it is going to be paid, when and in what way. Clarity in this aspect is mandatory. In many cases there will be different countries where the company and the influencer are located, so it is necessary to define the compensation, currency, form of payment and deadlines. All this before signing, after that it is more complex.
Bonuses and penalties. If we are going to establish a variable bonus or penalty system to incentivize effort, it has to be very clear, especially in relation to point 1.
3. Intellectual property and use of content
Copyright: Who will be the owner of the graphic material obtained? This has to be defined, who will obtain rights over the intellectual property, the period of time that a campaign can be used, if one of the two will be able to take advantage of the image… Establish conditions in this regard.
Unauthorized Use. The contract should include clauses limiting unauthorized use of the campaign or relationship and the consequences.
4. Regulatory Compliance Risk
Advertising Regulations – Are we advertising objects that require authorization? The biggest example has been advertisements for cryptocurrencies or gambling. You have to make sure that the objects advertised do not require prior authorization. Otherwise there may be legal sanctions and reputational damage.
Data protection – how will customer data be passed on in the event that someone else handles it? Complying with data laws is critical.
5. Risk of reputational damage
The reason to define all of the above well is to avoid reputational risk on either side. The influencer could do something contrary to the brand image, or the brand could do something against the influencer.
6. Conflict of interest and unfair competition
Conflict of interest. To avoid conflicts of interest, the contract should include exclusivity clauses that prevent the influencer from collaborating with direct competitors during the term of the campaign.
Unfair competition. To avoid that one of the two parties can immediately go to the nearest competitor to take advantage of the data obtained. For this reason, there is usually a period that limits collaborations with competitors.
7. Early termination
Causes and competencies. The causes must be defined (non-compliance, metrics, image) and the consequences of the termination must be indicated. They may be reason-dependent or general.
8. Dispute resolution
Resolution Mechanisms. To handle any disputes that arise, it is essential to establish clear methods for dispute resolution, such as mediation or arbitration; or directly in court.
To ensure that your contracts with influencers are solid and problem-free, it is essential to have specialized advice. At Navas&Cusí, our influencer lawyers are ready to help you manage every legal aspect of your collaborations. Trust us to protect your interests and maximize the success of your campaigns.In this new economy of content creators we see how much of the investment in advertising and marketing has shifted from traditional channels to influencers (Tik Tokers, Youtubers, Instagram, etc.). In turn, this democratization of advertising has led to new players entering this market, sometimes without as much experience in dealing with contracts. Therefore, we expose a series of points to analyze in the contracts, to avoid problems seen in other cases.
1. Management of expectations (quality) and metrics
Unmet quality expectations. One of the main risks is that the content does not meet brand expectations in terms of quality or alignment with brand identity. To mitigate this, the contract should include detailed descriptions of the type of content expected, the tone and style, and sample publications. This will prevent either party from being dissatisfied by either not delivering what is expected.
Metrics: This can be looked at before and after. Before to really know the reach and audience to be reached, and after to really see the scope of the activities carried out, since the brand does not have access to that data. We recommend defining the metrics to be analyzed.
2. Payment method and bonus
How it is going to be paid, when and in what way. Clarity in this aspect is mandatory. In many cases there will be different countries where the company and the influencer are located, so it is necessary to define the compensation, currency, form of payment and deadlines. All this before signing, after that it is more complex.
Bonuses and penalties. If we are going to establish a variable bonus or penalty system to incentivize effort, it has to be very clear, especially in relation to point 1.
3. Intellectual property and use of content
Copyright: Who will be the owner of the graphic material obtained? This has to be defined, who will obtain rights over the intellectual property, the period of time that a campaign can be used, if one of the two will be able to take advantage of the image… Establish conditions in this regard.
Unauthorized Use. The contract should include clauses limiting unauthorized use of the campaign or relationship and the consequences.
4. Regulatory Compliance Risk
Advertising Regulations – Are we advertising objects that require authorization? The biggest example has been advertisements for cryptocurrencies or gambling. You have to make sure that the objects advertised do not require prior authorization. Otherwise there may be legal sanctions and reputational damage.
Data protection – how will customer data be passed on in the event that someone else handles it? Complying with data laws is critical.
5. Risk of reputational damage
The reason to define all of the above well is to avoid reputational risk on either side. The influencer could do something contrary to the brand image, or the brand could do something against the influencer.
6. Conflict of interest and unfair competition
Conflict of interest. To avoid conflicts of interest, the contract should include exclusivity clauses that prevent the influencer from collaborating with direct competitors during the term of the campaign.
Unfair competition. To avoid that one of the two parties can immediately go to the nearest competitor to take advantage of the data obtained. For this reason, there is usually a period that limits collaborations with competitors.
7. Early termination
Causes and competencies. The causes must be defined (non-compliance, metrics, image) and the consequences of the termination must be indicated. They may be reason-dependent or general.
8. Dispute resolution
Resolution Mechanisms. To handle any disputes that arise, it is essential to establish clear methods for dispute resolution, such as mediation or arbitration; or directly in court.
To ensure that your contracts with influencers are solid and problem-free, it is essential to have specialized advice. At Navas&Cusí, our influencer lawyers are ready to help you manage every legal aspect of your collaborations. Trust us to protect your interests and maximize the success of your campaigns.
