Influencer agreements 101: how to use influencer marketing to drive your business forward (incl. lawyer drafted template)

Influencer marketing has emerged as a powerful strategy for brands to expand their reach, increase brand awareness and ultimately boost sales. Although this market hardly existed only a few years ago, in 2023, the influencer advertisement market is now estimated to be a staggering $21 billion industry (approximately £16 billion in GBP). By partnering with social media influencers and content creators, businesses can tap into an influencer’s loyal and engaged audience on platforms such as Instagram, TikTok, Twitch, Facebook, Twitter or YouTube to promote their products or services. These collaborations are facilitated through influencer agreements, which outline the terms and conditions of the partnership.

In this blog, we will explore the world of influencer agreements, the rules that govern them and the role they play in successful brand collaborations. From understanding the benefits of influencer marketing to drafting effective influencer agreements, we will cover everything you need to know to leverage the power of influencer marketing to drive your business forward.

What is influencer marketing?

Influencer marketing is a form of marketing where brands collaborate with influential individuals on social media platforms to promote their products or services. These individuals, known as influencers or content creators, will usually have a significant number of followers and are considered experts or trusted authorities in their respective niches. By leveraging their influence, companies can connect with their target audience in a more authentic and engaging way.

Influencer marketing can take various forms, including:

• sponsored paid advertisement posts;

• product reviews;

• giveaways; and

• affiliate partnerships (this involves the influencer receiving a payment for each sale or clickthrough that occurs after they direct people to a specific link or provide consumers with a discount code).

The specific type of partnership will depend on the goals and objectives of the company and the preferences of the influencer.

The benefits of influencer marketing

Influencer marketing offers many benefits for companies looking to expand their reach, increase brand awareness and boost sales – but is it the right strategy for your business? To help you determine if incorporating influencer marketing into your overall marketing strategy may benefit your business, here are some key advantages:

• Reach a new audience and increase brand awareness: One of the primary benefits of influencer marketing is the ability to reach a wider audience and increase brand visibility. Influencers have built a loyal and engaged following, and by partnering with them, companies can seamlessly tap into their audience and expose their products or services to a larger pool of potential customers through new channels. This expanded reach allows companies to increase brand awareness and get people talking about their products/services.

• Build trust: Influencers have established themselves as experts or trusted authorities in their field. Whether it is fitness, food, books (or pretty much anything that people find interesting!), followers view influencers as reliable sources of information and recommendations.

  A survey conducted by Matter Communications found that 61% of consumers are more likely to trust recommendations from an influencer on social media platforms, but only 38% are likely to trust recommendations from a brand on social media platforms.

  By aligning your brand with the right influencers, you can leverage their credibility and build trust with their audience. This association can significantly impact the perception of your brand and enhance its reputation.

• Increase sales: Influencers have a direct impact on their followers' purchasing decisions. A study from Convince & Convert found that influencer marketing gained 11x the return on investment (ROI) than paid banner ads on websites or social media platforms. Endorsements from an influencer can carry significant weight, which in return may persuade consumers and drive sales for your brand.

• Easy to measure performance indicators: With traditional marketing methods, it can sometimes be hard to ascertain exactly how many people have taken notice of a particular advertisement (for example, billboard or magazine ads). Now, with social media platforms, engagement such as views, likes, comments, shares and brand mentions can be easily monitored, along with affiliate links which can quantify direct sale conversions from a particular piece of content. Utilising channel performance metrics and key performance indicators is a great way of measuring your business’ ROI when engaging with influencers.

How to create an effective influencer agreement

Influencer agreements serve as the foundation for successful brand collaborations. These contracts outline the terms and conditions of the partnership and ensure that both parties understand their roles and responsibilities.

Here are some key elements to consider when creating influencer agreements:

1. Defining the scope of the collaboration

When drafting an influencer agreement, you should ensure that you clearly define the scope of the partnership in the influencer agreement. What are the goals that you aim to achieve by engaging with an influencer? The influencer agreement should outline the overall objectives and strategic goals envisioned by both parties. Alignment on the objectives of the overall partnership will increase the chance of a successful collaboration and ensure everyone is on the same page from the start.

2. Outlining deliverables and expectations

It’s important to be very specific when it comes to defining the deliverables and expectations of the influencer's content. Any specific deliverables and expectations, such as the number of posts, the type of content and the timeline for the collaboration should be outlined in the influencer agreement, or in the relevant brief that is governed by the terms of the influencer agreement. You should be specific about the platforms on which the content will be published and how long the campaign will last.

Additionally, if you have any specific brand guidelines or messaging that should be followed, this should also be agreed from the outset with the influencer. Documenting your expectations in the influencer agreement will help to ensure there are no miscommunications later down the line.

3. Transparent payment terms

The influencer agreement or each brief governed by the terms of the influencer agreement should clearly outline the compensation and payment terms for each campaign or engagement. This includes specifying the relevant fee, payment structure (e.g. payment per post or on completion of the campaign), and payment schedule. Establishing a well-defined payment schedule or timeline is crucial to ensure timely compensation for the influencer's work and foster trust between the parties involved.

It's important to note that if the influencer is receiving additional forms of compensation apart from the fee specified in the influencer agreement (such as free products, benefits or other incentives), these should also be mentioned in the contract. Transparency in the influencer agreement regarding payment terms is vital to provide both parties with a clear understanding of the financial aspects of the partnership.

4. Addressing intellectual property rights

Each post created and uploaded by the influencer involves the creation of intellectual property rights (IPR). Therefore, it is essential for the influencer agreement to clarify the ownership and usage rights of the content, along with the influencer's name and image. The agreement should also state that the company grants a licence to the influencer to use its own IPR for creating the content.

By clearly defining the ownership and usage rights of the content produced during the collaboration, your company ensures it has the necessary rights to utilise and repurpose the content for marketing and promotional purposes. It’s important to use the right kind of tools to protect your IPR in the influencer agreement, as this will help to prevent the unauthorised use of your company's most valuable intangible assets.

5. Including confidentiality clauses

To protect your brand's confidential information and trade secrets, it's crucial to include confidentiality terms in the influencer agreement. This ensures that the influencer will not share any sensitive or proprietary information about your brand or the collaboration.

In addition to setting out any confidentiality obligations, the agreement should also outline the consequences of a breach of confidentiality.

By including comprehensive non-disclosure provisions, you can safeguard your valuable information and establish trust with the influencer.

5. Exclusivity

An influencer’s recommendation of one of your products may be less impactful if they are also endorsing similar products from your competitors at the same time. For this reason, in some cases, you may want to include exclusivity provisions in your influencer agreements. Exclusivity clauses prevent influencers from working with direct competitors during the collaboration or for a specified period. These provisions serve to protect your brand's interests and preserve brand exclusivity. However, it's important to ensure that the exclusivity restrictions are reasonable and aligned with the legitimate interests of both parties, while also complying with relevant laws and regulations.

With a well-drafted influencer agreement, you can establish clear expectations and protect your brand's interests throughout the collaboration. These contracts provide a robust legal framework that defines the rights, responsibilities, and obligations of both the brand and the influencer, ensuring transparency and alignment from the outset of the partnership.

Ready to create your own influencer agreement?

You can find Docue's fully customisable influencer agreement template here, and if you get stuck - our lawyers have included handy guidance notes to help you along the way.

What are the rules of influencer marketing?

In the UK, there are two primary regulations that govern influencer marketing:

• the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (known as the CAP Code); and

• the Consumer Protection from Unfair Trading Regulations 2008 (known as the CPRs).

These laws require influencers to clearly indicate to consumers that the content they are engaging with is an advertisement.

Enforced by the UK’s independent regulator of advertising, the Advertising Standards Authority (ASA), the CAP Code governs influencer marketing on non-broadcast platforms, while the CPRs govern the conduct of businesses or traders when marketing or supplying to consumers in the UK.

The CPRs make “unfair commercial practices” illegal. They forbid "misleading actions" (i.e. tactics) and "misleading omissions" (i.e. hiding important information) that can result in the average consumer making a “transactional decision” they wouldn't have made otherwise. For example, an influencer promoting a product where a company has paid them to do so, without indicating this clearly in the influencer's content.

What if influencers fail to comply with the rules?

Failure to comply with the CPRs may result in the advertisement being banned, fines, or in some severe cases, can lead to prosecution by the Competition and Markets Authority (CMA) or local authority Trading Standards offices.

In addition to the CMA's punishments for failing to comply with regulations, the ASA also now have a "name and shame" list on its website which lists the influencers that have breached the CAP Code.

How can influencers make it clear that their content is sponsored?

One of the most simple but effective ways to make it clear that content is paid advertising is to include a clear and prominent label such as #AD or #advertisement or #paidad label at the beginning of the content caption before consumers can view the rest. Both the company and influencer are responsible for ensuring sponsored content is disclosed correctly, so both should ensure that content uploaded by the influencer is clearly recognisable as a paid advertisement or partnership.

The CMA has created various forms of guidance to help influencers navigate the rules, including the “Influencers’ guide to making clear that ads are ads".

Additionally, using disclosure tools provided by platforms like “Instagram's Paid Partnership” tool can assist in distinguishing advertisements from other types of content. However, it is important to note that transparent labelling alone is not the sole requirement for advertising content. Advertisements must also meet standards of social responsibility, ensuring they do not materially mislead consumers or cause significant offence.

Final thoughts

Influencer marketing has revolutionised how brands engage with their audience and leverage social media to increase sales. To unlock their full potential, businesses should embrace the future of influencer marketing and stay up to date with emerging trends and technologies. You can ensure that your business interests are protected throughout the collaboration by ensuring you have a well-drafted influencer agreement in place that establishes clear expectations from the outset of the partnership.

How can Docue help?

Using Docue, you can create a high-quality influencer agreement that suits your business needs in minutes, without the need to wrestle with complex legal jargon or the usual hefty legal bill.

So, why spend hours creating an influencer agreement from scratch? Let Docue simplify your current contracting process. With our lawyer-drafted templates, easy e-signature functionality and secure contract storage, you can save time, reduce administrative hassle and focus on building meaningful partnerships with influencers.

Sign up with Docue today and see just how easy it is to create your own influencer agreement.