According to the UK’s Department for Digital, Culture, Media and Sport report on influencer culture, the global sector is expected to grow from $6.0 billion in 2020 to $24.1 billion by 2025, at a compound annual growth rate of 32%.

Influencer marketing offers brands a unique opportunity to target and connect with online communities, using a personalized approach. Whilst influencer marketing can yield great returns for brands, it is essential for influencers and brands to navigate this legal landscape carefully, especially in terms of contractual relationships.

This blog explores some considerations surrounding influencer marketing and highlights key aspects that should be addressed in contracts to ensure a mutually beneficial and legally compliant partnership. As we will explore, contractual relationships are an effective way of mitigating the risk of breaking CAP Code or consumer law protection requirements.

1. Parties: Consider the parties involved in the arrangement and ensure that the appropriate parties are reflected in any formal contracts. Potential parties could be, a marketing agency, talent management or PR firms, the individual influencer, or the brand.

• Clear Disclosure: In the UK, the Advertising Standards Authority (the ASA) and the Competition and Markets Authority (the CMA) regulate influencer marketing by requiring compliance with the CAP Code and consumer protection law. One crucial legal consideration in influencer marketing is transparency. Influencers must disclose their relationships with brands to avoid misleading consumers. The position of the ASA and CMA is that all parties involved are responsible for consumer compliance. Any contract should therefore include language that ensures the influencer will comply with the applicable disclosure requirements. Disclosure requirements are carefully monitored by the ASA and the CMA (see our previous blog in relation to this here).

• Payment: Consider how will the influencer be paid. The scope of influencer marketing encompasses a wide range of payment types, including payment in kind, perks, freebies and gifting.

• Intellectual Property Rights: The commercial deal between the parties may dictate that certain intellectual property rights (commonly copyright) in the end-product created by the influencer relating to a campaign are owned by the brand. This will need to be reflected in any contract, as the starting position under English law is that the owner of any copyright will be the author (subject to some exceptions). A brand should also obtain waiver of moral rights from the influencer. Contracts should explicitly address the ownership, licensing, and usage rights of content created during the collaboration, which will vary depending on the commercial arrangement.

• Termination and Dispute Resolution: Contracts should include provisions for termination and dispute resolution mechanisms to address unforeseen circumstances. A brand should ensure that it can sever ties with an influencer, if the influencer behaves in any way that jeopardises the reputation of the brand or the endorsed product. Consider this in addition to general termination rights and appropriate dispute resolution clauses in any proposed contract.

Influencer partnerships can be a powerful marketing strategy, but it is crucial to consider the legal implications associated with contractual relationships. A well-drafted contract that covers essential legal considerations sets the foundation for a successful influencer-brand relationship. The above is a non-exhaustive list of areas to consider when thinking about engaging an influencer in respect of advertising or marketing campaigns.