Clifford Chance

The influencer marketing industry is still relatively new but it is already a multi-billion dollar industry with a value that is only expected to grow substantially over the coming years. Some of the biggest social media influencers are now akin to celebrities and backed by management teams, legal counsel and marketing experts, but many influencers are self-employed individuals operating as a team of one. For some, social media content creation will be their full-time job, for others, it may simply be a lucrative side business to supplement their income.

As reported in our previous articles on influencers, due to their influence on social media, these individuals may be approached by brands to promote their products or services in exchange for complimentary products or monetary compensation. Influencers are increasingly complaining about being exploited by the brands they partner or collaborate with. A number of brands have reportedly been accused of drafting unfair contracts, processing payments late, intellectual property violations , and both gender and ethnicity pay gaps.

Given that the majority of influencers are often individuals without commercial or legal experience, many may struggle to negotiate commercial terms with large businesses or be unaware of their rights when things go wrong. As a result, a number of British influencers have decided to create an influencer union called The Creator Union. This union aims to launch in 2021 and will provide "strength in numbers", giving influencers advice and training whilst campaigning for change within the industry.

What does this mean for businesses?

At present, it is unclear how many influencers will enrol to become members of The Creator Union or what role the union might play in negotiating commercial terms between brands and influencers in the UK market. Still, the union has the potential to change the way that brands interact and contract with influencers in the future. We have set out some points for consideration by brands below.

Reputational risks

Influencers who band together and join a union may feel emboldened to speak out against brands that they consider to have treated them unfairly. If the  union grows, it may provide a large platform (beyond their own social media channels) for these influencers to voice their concerns. The Creator Union has already surveyed a number of influencers and the top concerns of those surveyed include: inclusion and diversity in campaigns, the ethnicity pay gap, and payment for image rights.

Failure to address an influencer's concerns, such as those outlined above, could lead to significant reputational damage to a brand. Firstly, an influencer could encourage their followers to stop supporting the brand, leading to a loss of customers. Secondly, other influencers may be reluctant to work with the brand in the future, leading to lost marketing opportunities.

Increased costs

Compared to traditional marketing methods, influencer marketing can be a cheaper method for brands to generate marketing content and reach their target audience. In lieu of staging photoshoots with contracted photographers, makeup artists and actors, which can require a large amount of time and investment, a business can pay an influencer a flat fee to produce content of a similar nature and promote it to their fanbase.

As influencers begin to share information about average fees and reasonable usage rights, businesses may begin to face push back on their contracts in relation to payment terms and the treatment of intellectual property rights. For instance, influencers may begin to negotiate for higher and/or additional fees for usage rights beyond sharing the content on their own social media platforms. Influencer marketing may start to become a much more expensive activity for businesses in the future.

Further, The Creator Union states that it will provide contract templates to their members, which will likely be influencer-friendly. Negotiations are typically between the influencer and a brand's PR team, but it may be that the legal team is required to provide greater input to review and amend contracts as part of negotiations moving forwards. This may lead to an increase in time and money spent planning and executing influencer campaigns.

Conclusion

We will continue to monitor the development of The Creator Union over the course of 2021 and how it may affect businesses who work with influencers. In the meantime, brands should reflect on their existing policies when working with influencers and whether these practices would be considered fair.

For more information about influencer marketing and how it affects your business, check out our previous Talking Tech articles on key considerations for brand owners and advertising and marketing on social media in the UK.