Social media platforms such as Instagram have provided businesses with a significant opportunity for growth. Influencer marketing on social media platforms has grown in popularity and become a common part of marketing strategies.
Influencer marketing usually involves a collaboration between Brands and Influencers, whereby certain Influencers are selected to assist in the promotion of the Brand’s products or services in exchange for payment of a fee or free product. Influencers usually have a large following on their social media platform within a certain target market, for example fashion. A fashion brand may seek to collaborate with a fashion Influencer to promote their brand and sell their products to that Influencer’s followers.
Based on its research, influencer marketing agency, Mediakix, found Instagram’s influencer marketing to be a 1 billion dollar industry in 2017. Further, they project that in 2019, this market could reach almost 2.4 billion dollars. Read about their findings here.
Legal Issues for Influencer Marketing
Many legal issues should be considered in the context of influencer marketing on social media. Some of these include:
- The use of Influencer Agreements;
- Laws relating to intellectual property in Australia; and
- Laws and guidelines governing advertising in Australia and how they apply to influencer marketing.
We explore these below.
Do I need an Influencer Agreement?
Collaborations between Brands and Influencers should be documented in an Influencer Agreement. Some of the important issues that the agreement should cover include:
- Control of the content;
- Duration of the campaign;
- Any agreed exclusivity;
- Payment terms;
- Intellectual property rights; and
- Obligations of the Influencer in relation to disclosure of the sponsored content and monitoring comments on their posts.
Agreeing the terms of the relationship in an Influencer Agreement ensures that the expectations are clearly documented and sets out the rights and obligations of each party. This can avoid future disputes and potential damage to reputation following the campaign.
Influencer Agreements should be negotiated and agreed prior to the commencement of the campaign.
Intellectual Property and Influencer Marketing
In creating content for use in influencer marketing, intellectual property issues may arise, such as who owns the copyright in the content created.
The law in Australia recognises the first owner of social media content to be the person who first wrote, photographed, produced or broadcasted the content. This may be the person who first uploads it to the social media site, however in some cases, social media content may be created by others and in that case, the creator, not the social media user, legally remains the owner of the copyright, in the absence of any agreement to the contrary.
Copyright can however be assigned under contractual agreements (such as in an Influencer Agreement). It is therefore important to discuss and agree who will own the copyright when negotiating the terms of the Influencer Agreement. Licenses can also be negotiated whereby the owner of the copyright grants a licence to the other party to use that content in a certain way, for example to post the content on their own social media account or on their website. The specific terms of any licence should be carefully considered and documented.
Moral rights should also be considered and addressed in the Influencer Agreement. Moral rights continue regardless of any assignment or licensing of copyright. You may be required to name the creator of the work in the content you post to social media unless it is not reasonable in all the circumstances to do so or where the creator has given their consent for their work to be used in a way which would otherwise infringe their moral rights.
Disclosure of Sponsorship for Influencer Marketing
Under the Australian Association of National Advertisers Code of Ethics, Influencers are required to clearly label their sponsored content to make it clearly distinguishable as such to their audience. Compliance with the Code is however non-binding. It also does not specify exactly how such disclosure must take place. It has become standard practice amongst most Influencers to include hashtags such as “#sponsored” when posting sponsored content, specifically in cases where it is not otherwise clear that a paid sponsorship exists.
The real legal risk in terms of failing to disclose sponsored content is found in the Competition and Consumer Act (“CCA”). This legislation prohibits, amongst other things, misleading and deceptive conduct. Promoting a product or service without disclosing to the consumer that it is a paid sponsorship can breach this legislation.
The Australian Competition and Consumer Commission have a broad range of enforcement powers. These include, amongst other things, the power to require that any claims on social media pages be substantiated and the power to commence court proceedings where a breach of the law has been identified.
Further, where a party has suffered a loss or damage due to misleading and deceptive conduct, they may bring a claim for damages. This can include, and awards have been given for, damage to the commercial reputation of a corporation arising from misleading or deceptive conduct.
Minimising your risk associated with Influencer Marketing
In order to minimise your risk of being found to breach the CCA:
- a requirement to disclose the sponsorship should be included in the Influencer Agreement;
- sponsored posts should include relevant hashtags to disclose the fact that they are sponsored posts;
- the Brand engaging the Influencer should monitor the Influencer’s posts (and any comments made by social media users on those posts) to ensure that they do not contain any misleading or deceptive statements and that the paid sponsorship is adequately disclosed to the Influencer’s followers;
- any statements that could be found to be misleading or deceptive (including any made in comments on posts by social media users) should be deleted as soon as possible; and
- no false statements should be made (for example recommending a product or service that has not been personally experienced by the Influencer).
Boorman Lawyers can assist clients in drafting and negotiating the terms of Influencer Agreements. Contact us on 1300 941 900.
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