Clifford Chance

"Influencers" are individuals who have developed a large (and hopefully loyal) following of consumers on their various social media platforms. When the influencer endorses or recommends a product by way of a favourable social media post, the brand owner hopes to benefit by the endorsement or recommendation influencing followers' purchasing decisions.

In a previous article we looked at how the use of influencers is regulated from a marketing perspective in the United Kingdom and Germany. In this article we consider some other key points for brand owners to bear in mind when engaging influencers to participate in marketing campaigns. In many respects engaging influencers is similar to engaging other types of well-known individuals to provide endorsements, such as actors or musicians. The fact that influencers engage almost exclusively through social media does however create some additional challenges, as well as requiring a different approach to the more traditional endorsement-related issues.

Picking the right influencer

Has the influencer worked with other competing brands recently?

Influencers generally have a following which is limited to a particular sector, so are attractive to brands also targeting that sector. An influencer may be engaging with a number of other similar brands around the same time. It may not be immediately obvious with which other brands an influencer is working (although sponsored content should be obvious – see below).

Brand owners need to conduct thorough diligence on the influencer's channels to establish whether any previous or ongoing collaborations are not aligned with the brand owner's brand values or the proposed campaign. Equally brand owners need to understand whether an influencer is in the process of preparing a collaboration which would impact the effectiveness of the brand owner's proposed campaign. This is in addition to any discussions around exclusivity periods with the influencer the brand owner may wish to have.  

What is demographic of the influencer's followers (and are they real!)?

One benefit of social media advertising is that it is possible to use analytics tools to increase the chances that a brand owner reaches the right audience for its products. An influencer should provide analytics data which the brand owner can use to confirm that the influencer's followers are the right match for the brand owner and the campaign. The data can also be used to understand which social media channels the campaign should focus on, if different channels reveal slightly different demographics.

A major issue within influencer marketing recently has been the problem of fake followers. Unscrupulous influencers have been found to have purchased services which artificially inflate their follower numbers in order that the influencer appears more marketable (and can command higher fees). Fake accounts, often automated, can be used to boost interactions with content ("likes" etc.) which are a key metric for measuring success.

In order to counteract this risk, it is important to check whether followers are fake or possibly inactive (which may result in the conclusion that the audience is not worth targeting). Clearly it is not practical to check all followers and spot checks may not be sufficient to reveal a problem. Comfort can be gained by using software tools to track whether there has been a spike in following or likes. Significant increases in an influencer's following in a short period of time (sometimes a matter of seconds) is indicative that there is an issue. Comfort can also be sought through contractual protections which give the brand owner a remedy if the influencer is found to have misrepresented the size of its following.

Exploitation of the content

Channels and re-posting

Once the influencer is deemed suitable, attention should then turn to the content to be created and how that content will be shared. The agreement with the influencer should set out requirements for content sharing to ensure that the brand owner receives the exposure it has paid for. The channels to which the content should be posted and the number of posts per channel should be specified.  Equally it should be clear if a post is to be shared on all channels, or bespoke content made for each. Territory is also a key consideration. A campaign may be geo-blocked to users in certain countries, or for regulatory reasons may need to exclude users from certain countries.

Brand owners should also consider what use they want to make of the content. For example, if the brand owner wishes to share the content through its own channels, it should seek a specific right to do so. If the collaboration is limited in time the brand owner should also give thought to what should happen at the end of the collaboration period. Should content remain visible on the influencer's channels? Can the brand owner still include influencer content on its channels provided that it does not actively promote the content? Since it is likely that the content will have been created by the influencer the brand owner needs to ensure it has the necessary licences to that content to give effect to its commercial intentions.

Analytics

Brand owners should ensure that at the end of the collaboration (and/or other defined periods) the brand owner is supplied with analytics data which sets out the views of and interactions with the content. This information is easily available through most platforms and can often provide granular information on demographic of the users which engaged with the content. This information is not only useful for assessing the success of a campaign but also for scoping out future collaborations and marketing strategies.

Managing reputational risk

Responsibility for complying with advertising regulations

Applicable advertising regulations are discussed in more detail in our article - Using Influencers in Marketing. As discussed in that article, in the United Kingdom any payment (whether monetary or by way of free products/services) triggers an obligation to ensure the incentive is made clear to viewers of the advertisement/advertorial. Any element of editorial control triggers further obligations under the CAP Code – and if the brand owner only dictates the channels and timing of posts this is likely to be sufficient to be considered editorial control, even where the content has not even been seen by the brand owner in advance.

It is prudent for brand owners to ensure not only that the influencer is aware of and agrees to abide by its marketing regulation obligations, but that all content is in fact compliant. Brand owners should have the ability to object to content which is not compliant (irrespective of any other approval rights which may be agreed/advisable). Although such an approval right would be considered editorial control, a brand owner should ask on balance whether it is better placed to ensure compliance – particularly in light of the very low threshold for "editorial control" in any event-  and consider the risks to its own reputation if the content is non-compliant. Where content will be used across multiple jurisdictions brand owners should be mindful that even if an influencer can be trusted to comply with local rules it is unreasonable to expect awareness to go beyond that. It is also far more likely that that brand will be named and shamed than the influencer.

What to do if subsequent influencer content is inappropriate?

Reputation management should also be factored into the brand owner's agreement with the influencer more generally. Falls from grace on social media can happen even faster than through more traditional media. Should the influencer post something offensive or illegal, the brand owner needs to be able to distance itself from such behaviour quickly so as not to get caught up the inevitable furore. When social media stars have been ostracised in the past for causing offence, more often than not the offence caused was unintentional. No matter how "safe" the influencer is seen, brand owners should ensure a proper mechanism is in place to protect the reputation of the brand.