The Importance of Influencer Agreements (And How to Write One)

The age of the influencer has arrived. Love them or hate them, it’s impossible to deny that these social media superstars have changed the way that companies market their products and services. In fact, 93% of marketers have reported using influencer marketing at some point.

If you’re thinking of undertaking some influencer marketing for your own brand, it’s important to make sure that you’re protected, and that the influencer you’re partnering with knows exactly what's expected of them. The best way to do this is with an influencer agreement.

We’re going to take a look at some of the finer points of influencer marketing, including how an influencer agreement can protect your business, and exactly what it should include.

What is Influencer Marketing?

Influencer marketing is a type of social media marketing, with brands partnering with influencers to increase exposure to their products and services. Influencers are individuals with a large social media following, often thought of as experts in their particular niche.

These influencers are well respected and trusted by their followers. In fact, 61% of consumers trust a product recommendation from an influencer, compared to the 38% who would trust recommendations made by branded content.

This means that the brands partnering with them gain access to a large group of potential customers, as well as a spokesperson that’s well positioned to make a lot of conversions. 

This explains why influencer marketing is one of the fastest-growing online customer acquisition methods.

Image sourced from Tomoson

How Can Working With an Influencer Benefit Your Business?

Influencer marketing helps brands to quickly establish credibility and trust with their target audience. It can also help to boost general brand awareness and drive sales, placing your products in view of potentially millions of new prospective customers, across a wide range of social channels.

It is also well reported that influencer marketing generaties quality leads, meaning that a higher percentage of them are likely to be converted into paying customers. 51% of marketers report that the quality of customers acquired through influencer marketing is better than those acquired through other marketing channels.

Image sourced from Tomoson

Influencer marketing can also provide a great marketing ROI, providing that you partner with the right influencers. 22% of marketers reported influencer marketing as the most cost-effective customer acquisition method.

Image sourced from Tomoson

What is an Influencer Agreement?

An influencer agreement is a written, legal agreement between a company and the influencer that they’re partnering with. In the majority of cases, an influencer represents a product or brand in exchange for compensation.

The influencer agreement is designed to protect both the influencer and the company they’re representing, ensuring that all obligations are met, and any pertinent regulations are adhered to. 

Influencer agreements should be drafted whenever an influencer partnership is being embarked upon, and should be signed before any work is started on a campaign.

Why Should You Use an Influencer Agreement?

There are many reasons why using an influencer agreement is a good idea when engaging in influencer marketing.

Set Expectations

An influencer agreement helps both parties to understand what the expectations are of them in the partnership. This includes what work needs to be produced, what deadlines need to be adhered to, and when payment should be made.

Protect Your Brand

Partnering with influencers can have an incredibly positive impact on your brand image. However, in some instances an influencer may act in a way that doesn’t reflect well on your brand. 

A legally binding influencer agreement can give you a level of control over the way an influencer acts with regards to your brand, and can give you grounds for legal recourse should they act in a way that negatively affects you.

Meet Advertising Standards

An influencer agreement helps to ensure that all parties will act in a way that follows regulatory and legal requirements during the course of the partnership. 

If an influencer is found to have broken regulations, such as those around false advertising, then it can negatively impact your company, both financially and in terms of brand image. An influencer agreement can help you avoid this.

Image sourced from Insider Intelligence

42% of respondents interviewed stated legal compliance as a leading challenge of influencer marketing. Having an influencer agreement in place can help to greatly mitigate this challenge.

Laws Around Influencer Marketing

In the US, influencer marketing is regulated by the Federal Trade Commission (FTC), under Section 5(a) of the FTC Act.

Some of the key requirements for influencers under this regulation include:

  • Influencers must disclose any material connections to a brand they’re endorsing.
  • Disclosures must be clear and unambiguous.
  • Disclosures must be made directly within endorsements, not just in the descriptions of videos or buried in a large block of text.
  • Influencers shouldn't talk about an experience with a product that they haven’t tried yet. 

There are various other rules and regulations that can apply in other territories, such as the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing. If the influencer you're partnering with has a global following and will be promoting your brand around the world, it’s worth knowing about rules and regulations in other countries.

What Should be Included in an Influencer Agreement?

There are several key components that should be included in any influencer agreement. If you’re struggling to draft an agreement that you’re happy with, it might be worth checking out a sponsorship agreement template to get an idea of what should be included.

Scope of Work

An influencer agreement should set out what work is to be completed by the influencer as part of the partnership. 

This will include any video content that is to be produced for sites such as YouTube, any images that are to be posted to sites like Instagram, podcast or other audio content, and any written content to be created for sites like Twitter or Tumblr.

Expectations for the quantity and frequency of work, deadlines for when it should be completed, and the overall length of the partnership should be made clear here. 

Each influencer agreement should be tailored specifically to the influencer being partnered with here, as individual influencers will have different preferred channels for interacting with their followers.

Intellectual Property Rights

It should be made clear in the influencer agreement which parties have ownership over the IP of content created. 

If the IP rights are to remain with the influencer, then the company working with them should ensure that they have license to use the content, and establish how long that license is for.

Conversely, if IP is to remain with the company, then the influencer should ascertain what rights they have to use the content, for example as part of their portfolio.

Exclusivity and Confidentiality

A company may wish to include an exclusivity clause in their influencer agreements. This would prevent the influencer from promoting the products and services of direct competitors during the period that they’re representing their brand, as this would be likely to significantly reduce the effectiveness of the campaign. To ensure that the exclusivity clause is well-drafted and complies with relevant legal standards, a law document comparison with existing industry agreements can be instrumental in identifying any potential inconsistencies or weaknesses.

A confidentiality clause helps to ensure that any of a company’s marketing plans or business details will not be disclosed by the influencer to a third party, including competitors.

False or Misleading Content

Including a clause regarding compliance in an influencer agreement helps to protect both parties from any breach of advertising guidelines.

By laying out the expectations of the company when it comes to disclosure, they can ensure that the influencer is under no misconception about how they should disclose their partnership in social media posts and other content.

Image sourced from Insider Intelligence

This can also help to protect a company in the event that the influencer is found to have artificially inflated their follower count or provided inauthentic engagement in other ways. 50% of US marketers reported identifying these pitfalls as a key challenge of influencer marketing.

Terms of Payment 

Exactly how the influencer is to be paid should be set out clearly as part of the influencer agreement. This should include whether the influencer is to be paid a flat fee, a commission from products sold, a fee per view or action resulting from their content, or if they are to be compensated with free products or services.

If the influencer is to be paid a fee, then how the payment is to be made should be stated here, for example via PayPal, through a bank transfer, etc. It should also be made clear when the payment will be made. For example, is part of the payment to be made up-front, with the rest following once the work is completed? If so, in what percentages?

Termination of Contract

It’s always important to include the mechanisms for termination of contract in any legally binding agreement. This is especially true in an influencer agreement, considering the issues that could arise regarding copyright ownership, regulatory compliance, and brand representation.

It should be noted in the influencer agreement that the company has the right to end the partnership should the influencer act inappropriately or bring negative media attention to their brand. 

Special care should be taken with regards to IP licensing issues when drafting termination clauses, making it clear who retains ownership over the content produced once a partnership has come to an end.

Protect Yourself and Your Brand With an Influencer Agreement

If, like so many others, you’re undertaking influencer marketing, make sure you’re protected with an influencer agreement. Not only will it help guide your partnership to success, but it’ll also ensure you’re protected legally and financially should things take an unexpected turn.

Do your research first, and make sure you include all the important clauses we discussed above.

Once your influencer agreement is complete, don’t forget to use electronic signature software to capture your influencer’s signature quickly and get your partnership moving. (If you’re wondering which is the best software to use; HelloSign vs DocuSign, don’t worry, we’ve got you covered).