Social Media Influencer Contracts: Beware these Pitfalls

female influencer in coffee shop

Should Influencers have Influencer Contracts with Sponsors?

Influencer Contracts are an absolute must-have for any Influencer looking to take on a Sponsor because Influencer Contracts provide protection in both the financial realm as well as the legal realm.  There are lots of stories and examples in the Influencer industry that illustrate why Influencer Contracts are hugely important. 

To take just one example of how things can go wrong: Sponsors have, after hiring an Influencer for one legitimate promotion, then gone on to use their voice samples to create deepfakes and create entirely new advertisements with voiceovers from the Influencer that were not actually the Influencer themselves, but the deepfake (and the Influencer only got paid for the first ad). 

Do you think it’s pretty important for an Influencer to maintain rights over the use of their own voice?  I do too.  That’s where a contract comes in.

How do Influencers get taken advantage of by Sponsors?

A legal mistake Influencers sometimes make is focusing only on the money.  “I get $10,000 if I read a 1-minute ad during one of my YouTube videos?  Great, where do I sign?!” 

Sometimes these sponsorship agreements take place in the absence of a written Influencer Contract, simply on the basis of a few emails hashing out the details.  Those types of deals can go wrong in a number of ways, one of which is alluded to above (having a Sponsor reuse your voice in ways you didn’t anticipate or agree to).

Other sponsorship agreements do take place in the context of a written contract.  This, of course, broadly speaking, can be preferable to the absence of a contract for both the Influencer and the Sponsor, but oftentimes these contracts are drafted by the Sponsor’s attorney and, because of this, are one-sided in favor the Sponsor’s interests. 

How do Sponsors get taken advantage of by Influencers?

Again in these “deals” we see that are concluded over email (without a written contract) there are just a lot of things that can go wrong because the “deal” very often just isn’t thorough enough and doesn’t answer all of the questions and eventualities that are attendant to an Influencer-Sponsor relationship.

There are stories of Influencers getting paid up front and then just ghosting the Sponsor.  There are stories of Influencers lying about their subscriber count or reach in order to get a sponsored deal.  There are stories of Influencers taking sponsorship deals for two competing brands in the space of a few months.  There are lots of ways these deals can go sideways.

social media addict

What types of Influencer Contracts are there for Influencers?

Social Media Influencer Contracts, sometimes called “Sponsorship Contracts,” come in lots of different shapes and sizes.  Usually the basic structure is the same across these different types of Influencer Contracts: the Sponsor is paying the Influencer money and the Influencer is performing a service for the Sponsor, typically producing and distributing content that promotes the Sponsor’s company, products, or services.  What varies most frequently from Influencer Contract to Influencer Contract are things like:

  1. the medium of distribution of the sponsored content (g., YouTube, Instagram, Tiktok, Facebook, Twitter, LinkedIn, Snapchat, Twitch, Pinterest, podcasts, blog posts, email campaigns);
  2. the medium of the content itself (e., video, audio, written text);
  3. whether a single piece of content is being commissioned or there’s an ongoing relationship requiring multiple pieces of content to be created and distributed over a certain period of time; and
  4. the data and analytics the Influencer is obligated to provide to the Sponsor.

What problems does an Influencer Contract help an Influencer avoid?

An Infleuncer Contract can help an Influencer avoid a myriad of problems down the road such as:

  1. Loss of control over their own content, images of the Influencer, or the sound of the Influencer’s voice;
  2. Loss of the ability to produce sponsored content for other companies in the future (g., competitors of the Sponsor they are currently engaging with); and
  3. Loss of the ability to speak freely and candidly about the Influencer’s feelings towards a particular company or product.

travel influencer

What points should an Influencer negotiate into their Influencer Contract?

It’s impossible to lay out specific rules or contractual provisions that should be included in every single Influencer Contract.  The provisions in a given Influencer Contract need to be tailored to the specific facts and circumstances attendant to the situation.  Here are some questions both the Influencer and Sponsor should be asking themselves when contemplating entering into a given Influencer Contract for sponsored content:

  1. Who owns the content once it’s created?
  2. When does the content have to be produced and distributed by?
  3. Can the Sponsor modify, remix, and/or redistribute the content after the engagement is over?
  4. Can the Sponsor independently advertise their association with the Influencer (e.g., posting a page on the Sponsor’s website with a picture of the Influence and referring to the Influencer on their website as a “fan” of the Sponsor and/or their products)
  5. If the contemplated transaction is a product review, is the Influencer free to speak honestly and candidly about their opinion of the product they tested? If not, how should a situation where an Influencer hates a trialed product be handled?
  6. Should the Influencer be permitted to take the sponsored content down after some period of time or upon the occurrence of some precondition (g., the sponsored product being subject to a product recall)?
  7. Is the Sponsor free to subsequently hire other Influencers whose publicly-held views or opinions are anathema to the Influencer?
  8. Does the Influencer have to write the script or will the Sponsor supply a pre-written script?
  9. If the Influencer is free to “freestyle” and create their own script, what are the guardrails around what they can and cannot say, if anything?
  10. Does the Sponsor have the right to request the sponsored content be taken down at any point in the future (g., if the Influencer subsequently suffers serious negative publicity unrelated to the contemplated sponsorship).
  11. What are the Sponsor’s needs around having the Influencer deploy tracking pixels, marketing tags, other JavaScript, cookies, or other AdTech or MarTech tools in conjunction with the distribution of the sponsored content?
  12. How will the Sponsor and the Influencer track the effectiveness of the sponsored content on the Sponsor’s business, if at all?
  13. Should the Sponsor have the ability to direct the actions of the Influencer during the engagement cycle (the period of time after the sponsored content has been distributed) (g., requiring that the Influencer mute or delete users or comments that are negative toward the sponsored content)?
  14. Who is on the hook if the product or service being promoted ends up being total garbage?

Do Influencers have to disclose the identity of their Sponsor?

Yes, when producing and distributing sponsored content Influencers are required by law to disclose their relationship with the Sponsor and/or the product or service being promoted.  This is true even if the Influencer isn’t being paid.  For example, if an Influencer is promoting his brother’s company the Influencer must disclose that relationship to avoid running afoul of federal law.  The Federal Trade Commission has published a plain-English guide explaining all of these rules for Influencers.  The FTC also recently published a new guide covering endorsements and testimonials that Influencers and Sponsors should both be familiar with.

male wine influencer

Is being an Influencer in certain industries legally riskier than others?

Yes, absolutely.  One example of a higher-risk area for Influencers and Sponsors is food and beverage and health products.  Any content making claims about a product being “good for you” or making specific, concrete claims about health effects is more likely to  draw scrutiny from the FTC.  For example, in 2023 the FTC issued warnings to the American Beverage Association and the Canadian Sugar Institute for their improper use of Influencers and their claims about sugar and sugar substitutes.  The FTC has also recently sent warning letters to health influencers and dieticians for related activity.

What’s the definition of a Social Media Influencer?

A “Social Media Influencer” is any person or company that attempts to influence the purchasing decisions of a given target audience by way of the production and distribution of content through social media platforms.  Social Media Influencers are not always producing sponsored content; in fact, it’s often that case that years or unsponsored content are produced in order to build up a following or presence prior to a given Influencer attracting interest from would-be sponsors.

What’s the definition of a Sponsor?

A “Sponsor,” in the context of social media marketing, is a person or company who gives something of value to a Social Media Influencer (e.g., money) in exchange for the Influencer’s producing and distributing content in which the Sponsor has a significant interest, monetary or otherwise.

Can Influencers show products from companies they aren’t sponsored by?

Yes they can.  Influencers are free to produce content that refers to or displays products of companies with whom the Influencer has zero relationship, and that includes saying positive (or negative) things about the product.  Contrary to popular belief, the Influencer is not obligated to disclose that they do not have a relationship with the company in this scenario, as the FTC has explained (“If you have no brand relationship and are just telling people about a product you bought and happen to like, you don’t need to declare that you don’t have a brand relationship.”).

Having said all of this, showing products that contain a trademark (e.g., a logo) in an image or video can raise trademark law issues under certain circumstances.  You can read more about the basics of trademark law here or, if you’re short on time (or attention span!), download this trademark infographic.

What hashtags can Influencers use to protect themselves from legal trouble?

#ad or #sponsored are commonly-used hashtags in the context of sponsored content.  “sp,” “spon,” or “collab,” or stand-alone terms like “thanks” or “ambassador,” are not effective.  Ultimately a hashtag, by itself, is not necessarily enough to shield an Influencer from legal liability.  Influencers should consult with an attorney who has familiarity with the Influencer industry and can advise on the unique facts and circumstances attendant to a given scenario.

Can Influencers run giveaways?

Yes, Influencers can (and often do) run giveaways.  A “giveaway” is a blanket term that refers to what’s legally called a “sweepstakes” or a “contest.”  A sweepstakes is a giveaway where the winners are selected randomly and a contest is a giveaway where the winners have competed with other contestants in some way. 

Giveaways are actually fraught with legal risk because they are subject to both strict and complicated state laws as well as the rules of the platform on which the giveaway is occurring (e.g., YouTube has strict rules governing contests run on its platform). 

Influencers and Sponsors should consult with an attorney familiar with these laws and rules prior to running giveaways.

That the 50 U.S. states and the social media platforms have strict rules governing giveaways is no surprise; giveaways (contests and sweepstakes) have historically been very fertile ground for fraud.

Can an Influencer use songs in their promoted content?

No, not unless they created the song or have acquired the rights to play the song (or the Sponsor has).  Most songs are copyrighted –you can learn about copyright in this helpful article.  This has become less of an issue with the advent of free AI-generated music, such as UdioAI. 

female fashion influencer with cameras

Can a Sponsor have an Influencer post content that the Sponsor entirely created?

Yes, but only if the Sponsor-created content is an accurate and honest reflection of the experiences and opinions of the Influencer themselves.  Posting content that is false or misleading can subject an Influencer and their Sponsor to legal liability.

Influencers should be careful when taking on engagements such as these for non-legal reasons, however.  Many marketers believe that Influencers can damage their own personal brand if they distribute content that is not in the Influencer’s unique voice and style because a large proportion of their followers or audience can tell when this is happening and may be disappointed – or even angry in the context of an Influencer whose personal brand has elements of counterculture – to perceive it. 

Does an Influencer need to disclose exactly what they are getting from the Sponsor?

Not necessarily.  For example, an Influencer need not disclose the exact amount of money they are being paid by a Sponsor for a given promotion; it’s often sufficient to disclose the existence of the sponsorship itself.

If an Influencer’s sponsored product review isn’t all positive, do they still need to disclose the sponsorship?

Yes, saying or writing negative things about a given product or company does not remove the legal requirement to disclose the existence of a sponsorship.

If an Influencer honestly believes all of the positive things they are saying about a sponsored product, does they still need to disclose the sponsorship?

Yes.  Although only communicating honest opinions about a given product is a legal requirement in the context of a sponsorship, doing so is not sufficient to comply with the law.  The Influencer in this situation must still conspicuously disclose the existence of the sponsorship and the identity of the sponsor.

male social media influencer beer expert

If an Influencer Contract doesn’t require an Influencer to say or write anything about the product, does the Influencer still need to disclose the sponsorship?

Yes, this question often pops up in the apparel context.  Merely carrying a handbag or wearing a piece of clothing can trigger legal obligations, depending on the context.  An attorney familiar with influencer law can provide advice when armed with the specific facts and circumstances of the sponsorship and the sponsored content being created.

What can a Sponsor do if they end up not liking the content an Influencer produced for them?

The rights and options available to a Sponsor in this scenario depend on the nature of the agreement they initially struck with the Influencer.  That contract (or the emails or other communications that make up the agreement in the absence of a written contract) will need to be analyzed by an attorney familiar with influencer law in order to shed light on the Sponsor’s available courses of action.

If an Influencer changes their mind about a product, can they tell their audience about it?

Maybe.  What the Influencer can do in this situation depends on whether the original opinion they put out on social media was sponsored and, if so, what the Influencer Contract governing that sponsorship says.  Sometimes restrictions on comments like these are time-bound and expire at a certain point.

Is there anything an Influencer can do if a Sponsor didn’t pay them the money they’re owed?

Yes, an Influencer very likely has a lot of options, legally speaking, in a scenario such as this, even if there is no written Influencer Contract.  Any Influencer in this scenario should seek the counsel of an attorney who is familiar with the social media influencer industry to get a better understanding of their options going forward.

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