Businesses have worked with celebrities since the early days of advertising. Many advertising campaigns and brands have been inescapably linked with celebrities such as Michael Jackson for Pepsi or Michael Jordan for Nike. In today’s digital world, we have seen the rise of a new type of brand ambassador known as ‘Influencer’. These are everyday consumers who genuinely share their day-to-day experiences with the brands they love. They are paid to talk about a company or its brand. The particular rise of social media platforms such as Instagram, YouTube, Twitter, etc. has led many brands to engage influencers in order to raise consumer awareness of the products and/or services they offer. Influencers exert huge clout on such platforms, considering the number of followers runs into millions. It is widely acknowledged that social media marketing via influencers is a powerful tool to gain clicks, generate engagement and reach a novel audience.
While endorsements through such influencers are beneficial to the company, great care must be taken to protect the brand’s sanctity. Due diligence must be exercised by Companies while selecting a spokesperson to be the face of their brand. Obviously, any bad press related to that person would reflect negatively on their brand as well.
Verifying the Followers
Before hiring a social media influencer, brands should fully vet the influencers and be cautious of falsified engagement rats and clickbait. It is widely believed that there is a lot of potential for error because engagement statistics can be manipulated by purchasing more followers and raising comments using bots. Manipulation of statistics is common in this industry; hence such statistics should not be the sole determiner when selecting an influencer for your brand.
Ensuring the safety of your brand-
- Non-disclosure Agreement for Evaluation Phase: A non-disclosure agreement (NDA) helps to define and identify confidential material, knowledge, or information that the company intends to communicate and share with the influencers. An NDA creates a confidential connection between the parties, often to safeguard any type of confidential and proprietary information or trade secrets at the stage of evaluation of an influencer and its suitability to the brand.
- Prepare an Endorsement Agreement/Contract: An endorsement agreement/contract allows a business to use another party’s image, likeness, name, and reputation to market a product or service. It is advisable to draft short-term ‘single project’ or longer-term ‘multiple’ endorsement contracts between the brand/agency and the influencer to clearly capture the terms of engagement. It should usually contain the following amongst other clauses:
- Term: A start and an end date.
- Scope of Work: specific platforms, frequency, music, message, visual effects, hashtag/tags, etc.
- Compensation: including payment amount and process of payment, and also what is covered, like the use of the name, image, or likeness, the statistical data in terms of engagement, clicks, etc.
- Exclusivity: a restraint from endorsing similar products.
- Termination: a pre-set agreement on what will happen if the contract is terminated in terms of how much notice the influencers would get and/or what sort of payment they will receive.
- In addition to the above, the Company can also insert Morality and specific IP clauses. Morality clauses are becoming a common practise in agreements of endorsements. These clauses permit the contractor to unilaterally terminate the contract if the other party engages in any illegal, immoral, indecent, scandalous, or harmful behaviour or activities.
- IP clauses in an agreement for endorsement help to seek acknowledgment of rights from the endorser and to cease the use of IP assets post-termination or end of the contract term.
- Follow ASCI guidelines: For brands to identify themselves and established their online presence amongst Indian consumers through influencers, it is vital for the brand owners to follow the guidelines for Influencer Advertising in Digital Media set out by the Advertising Standards Council of India (ASCI). The guidelines are comprehensive and provide the responsibility for the disclosure, posts, and content, solely to the advertisers as well as the influencers. Thus, it is always advisable to double-check the ASCI guidelines for preventing any bad PRs and misleading messages that may influence the consumers’ purchase decisions.
As advertising is increasingly shifting to social media platforms, the monitoring of advertisement misleading content has become challenging. The ASCI highlighted in its annual complaints report for the period 2021-2022 that nearly 48% of the ads processed belong to the digital medium out of which 29% constituted complaints against the Influencers. Most of such violations were noticed in the crypto industry, personal care, and fashion and lifestyle categories.
The ASCI on its website also posted the names of 256 influencers who were found in breach of the ASCI guidelines for Influencers Advertising in Digital Media. The names include famous movie actors, cricketers, and TV personalities. The fallout of this reporting can be negative PRs for brands and influencers. It can also lead to hefty fines. The brands are therefore advised to take due care and caution before engaging influencers.