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Legal Side of Instagram Influencers Business

Online connectivity is growing day by day. Thanks to so many private players, the internet is almost freely available in most parts of the world. This has lent a considerable boost to social connectivity. Alongside social connectivity came social media platforms.

From WhatsApp to Twitter and from Facebook to Instagram, the companies providing such platforms are bursting with new users and multiple accounts each and every second. Every other person seems to have a personal Facebook account and then another Instagram page for their pet. Today the active users of the best of these platforms range in hundreds of millions and some have even crossed the billion-user milestone. 

The Cause Behind Hiring Social Media Influencers

All the aforesaid facts might seem to be just a feat of the platform providers and a new mode of increased connectivity, but the lesser-known fact is that they in fact represent a global marketplace with transparent and widespread access to almost all the probable consumers worldwide. 

This customer base is not limited to physical surveys and local billboard readers, it is anybody and everybody who watches your reel or likes your photo. One can sell anything in this marketplace, to anybody they want to target. This marketability inspires companies and brands to hire social media influencers. Advertisements that are brought out through these influencers receive ample public outreach. 

Realizing the Commercial Value of Influencers

In the backdrop of the rising brand collabs with social media’s top-dogs, the issue of influencer agreements has been burning like a wild fire. The outreach and marketability of these social media influencers seems to be on the up and up. This makes them resources of precision and efficiency as regards to the marketing or endorsement of a product. Effectiveness of these influencers has made them a customary recourse of consumer-seller companies which they use to connect with large masses. 

From Instagram models or meme pages to youtubers and viners, the content creators are plush with corporate marketing work nowadays. Every other influencer is being approached by brands for getting them to endorse the company’s product. We all can witness and see the ‘paid promotion tag lines’ below videos of various influencers. That tag basically indicates that the particular influencer has tied up with a brand or a company and is endorsing their product on their behalf by getting paid for the market value that he or she brings to the deal.     

Social Media Advertising – The New Genre of Product Publicity

Social media
Social media

After the advent of social media, the game of marketing has been totally revamped and today it is hijacked by individual influencers. Recognizing the aforesaid marketing capacity, each and every company, especially the small business owners and budding corporates opt for social media advertisements for spreading awareness of their product or service, amongst the followers of the influencer whom they hire. Brands can tap into their consumer base by investing minimal principal amount and reach a larger audience in a much lesser time frame than the old school modes of advertisement. 

The prior disproportionality between costs and outreach has diminished astronomically. The companies can pay meagre amounts to budding influencers just to create a buzz of their product or service amongst smaller circles first. Due to the lower hiring cost of amateur content creators, a synergistic alliance is generally forged between them and amateur corporate company. Both are short on funds and both feel the need to establish themselves in the market, be it the digital one or the real one. Therefore, such business deals are beneficial both ways and consequently form symbiotic association between influencer and company.

Influencer Agreements – Need and Importance

So, it must be understood first, that it is the basic human tendency to emulate the person that one respects or admires. People want to do something just because their beloved social media celebrity tells them to do so. So, if he or she gives a particular piece of apparel their stamp of approval, then the followers generally tend to buy that commodity.

Or suppose, if your favorite athlete says that a particular protein supplement is good then one would ordinarily tend to think that the product is good. Analogous to the aforesaid illustrations, it is quite clear that people do, wear or want something just because their favorite social media influencer endorses it. This happens very subtly and most of the times, without any question.

Therefore, the companies have now pioneered themselves into this new field of marketing where promotional stints are performed by these social media celebrities. A person having a fan following in millions is much better endorser than a generic TV advertisement with a mainstream model or actor. That’s why influencer marketing is important and for the same reason, influencer agreements are necessary, so as to regulate the said promotional activities. Otherwise, there would no recourse left for either parties, to resort to, in case of a fallout between the two contracting parties, i.e., the branding company and the social media influencer. 

Precautionary Measures in Influencer Agreements

If the influencer is supposed to compulsorily disclose that they’re in a paid partnership, then they cannot shrug off their duty for a higher consideration. Such steps would consequently make the resultant content illegal and give a bad press review to the company, thereby defeating the objective of advertisement.

Furthermore, while hiring an influencer, due-diligence of their authenticity is a very important and necessary step. Recognizing the high payment opportunities in this field, a lot of phony influencers have stepped on to various social media platforms who have bought their followers in the form of bots, or they have fake ones. Again, the target of advertisement would turn futile if the promotion is being done in front of digital bots who are not going to buy your goods and services. 

Basic Components of Influencer Agreements

Handshake after interview on podcast
Handshake after Influencer Agreements

Just like any other contract, an influencer agreement stipulates the broad terms and conditions that are supposed to be abided by parties involved in the agreement. Such terms are worded comprehensively so as to not leave any scope for alternate interpretation. Drafting these clauses exhaustively is necessary for not leaving out any service that the company would expect from the influencer. This might include different aspects or modes of marketing which the brand would want for the influencer to follow. 

Another boilerplate clause that follows in most corporate documents and contractual agreements is the duration or validity clause. This provision mentions the date or time period for which the agreement would remain in force and open to be enforced. Before the expiration of such validity, the influencer would be restricted from signing with a competitive brand or product. 

Obviously, when there is an exchange of goods and services involved, there is some sort of consideration. As noted earlier, the tag of endorsement videos reads as ‘paid promotion’. So, therefore, it is deductively inferable from the same that, the influencers are getting paid for their services. Including this payment clause in the influencer agreement is a much-needed requirement. This allows both the parties involved, i.e., the influencer and the company to delineate what services are going to be exchanged and for what consideration this exchange would be carried out. 

In conjunction to the payments clause, comes the services clause. This is because, the consideration might vary with a variation in the services that are demanded by the company. An influencer may not charge the same amount of money for a detailed YouTube video and for an Instagram photo post. Even the number of times for which the influencers are told to post photos, videos or stories would also affect the costing. So, this should also be stipulated in the services clause. 

Adding onto the same premise, a company might want the influencer to frequently post their content on his or her wall or page. Such companies need to include a timing clause in their influencer agreement. This clause would prescribe a specific time limit for the influencer within which he or she is supposed to post a mutually agreeable post on their wall or page.

To show a clear sign of partnership, some brands may want the celebrity influencer to add their brand name in their personal bio of their social media handles. This is a big ask, so it is better to pen it down in the influencer agreement and adjust the consideration clause accordingly. 

Next among such specifics clauses is the clause prescribing creative control over the content that is posted. So, this clause basically mandates the ownership of the creative works or expressions that are formulated from the collaboration between the company and the influencer.

It also specifies whether the content that is posted would be created by the influencer on his own volition or would it be scripted and supplied by the company itself. Though influencers retain the creative control, it is substantially limited in cases of paid promotions and endorsement. Afterall, the company would want the exact message to be conveyed to the masses, in exchange for the money they’re spending for their advertisements.

The influencer agreements also include a termination clause which mandates the procedure which is to be followed if either of the parties intend to terminate the contract before the maturity of its term or validity. 

Just like any other civil contracts, even influencer agreements are not stranger to civil disputes. Such cases are bound to arise, no matter how tightly you word the document or how fool proof one tries to draft it. So, therefore, it is better to include a dispute resolution clause in the influencer agreements. This is a general clause which specifies the jurisdiction or proper forum in or before which the said dispute between influencer and the company or brand would be resolved. It can be arbitrated if it is mutually agreed between the parties. It is better to include that in the dispute resolution provision of the influencer agreement.    

Apart from all the aforementioned provisions, indemnification clause, compliance clause and exclusivity clause are a few other types of clauses that are included in influencer agreements. 

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Aayushi Chopra
Aayushi Chopra
Aayushi Chopra is a law student who is interested in creating content on education, lifestyle, law, health, and environment. She enjoys researching different topics and then expressing her views on them.

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