This article is written by Dipendra Singh Tomar, pursuing Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho. The article has been edited by Prashant Baviskar (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).
Social media or digital media is growing enormously nowadays, especially in the last few years. From education to work, everything can be found online today. People have started spending more time on social platforms like WhatsApp, Twitter, Facebook (Now named as “Meta”) etc. Among all these platforms, one of the most influential platforms is Instagram.
At present time, Instagram has 1.386 billion active users and around 180 million in India itself. Acknowledging the diversity and population involved in this social media platform, companies, firms, businesses, agencies etc., consider it an extremely profitable platform for advertisement. Advertisements and endorsements on Instagram are made through influencers. This article deals with the agreement between influencers and various companies and brands etc.
Why are advertisements done through Instagram?
Every company wants to spread awareness about their products, services, works etc. to a large number of people from various walks of life for growth. Before the advent of these social platforms or before the popularity of these platforms, advertisements were mainly done through TV shows, TV advertisements, movies ads, salespersons, campaigning, posters etc., All these methods involve huge investment from companies to promote their brand/service. And after doing all these, the inadequacy of the diverse range of population covered by companies was disproportionate to the marketing and promotion costs and to make a profit. After some time, companies/businesses started to find it unprofitable. Now, the question before companies/businesses was, how to promote their brands/how to spread awareness to their products and services? And with the advent of social media platforms, the popularity of Instagram skyrocketed and brands found it more profitable to reach a larger mass in a shorter span of time with minimal investment of cost and time to tap into a consumer base from their side as influencers already have a certain amount of reach.
Why are influencer agreements important?
Both social media influencers and brands have a lot invested in influencer marketing collaborations, and influencers agreements serve to protect the interests of all parties, define ownership and usage rights of materials, and clarify campaign expectations. As recent legal actions by the U.S. Federal Trade Commission (i.e. FTC, the governing body that protects consumers from deceptive advertising and unfair business practices) illustrates, crafting an airtight influencer agreement complete with the requisite FTC stipulations can be largely helpful to both digital influencers (e.g. YouTubers, Instagrammers, Viners, Snapchatters, bloggers), content creators, audiences, and brands.
Influence through Instagram
The general human nature is that we want to be like people whom we admire and respect. And in the same way, if that person says something, wears something, says something, we accept that without any question because we value that person. There are several celebrities on Instagram with millions of followers. So, now that companies have started their marketing and promotional activities through the accounts of these celebrities, a person who has a large/adequate number of followers/fans, they have been able to reach a large number of people easily.
Influencer agreement : influencer and parties involved
If we start with the meaning of the word Influencer, an influencer is a person who can change the decision of another person, through his words or acts, photos, videos etc. Influencer Agreement broadly means the Agreement between the Influencer and the company or brand or agency, who wants to promote their product/service etc via said influencer.
The Influencer Agreement outlines the terms and conditions that are needed to be followed by each of the parties to the Agreement. The Agreement covers everything related to the marketing activity of that particular brand like,
- The consideration a celebrity gets,
- What the influencer has to do – posting story, post, video etc.,
- Usage of Hashtags,
- Timing of posting ads,
- Adding the brand name in the account bio, etc.,
Apart from all this, the Agreement also outlines the basic clauses of Agreements, including but not restricted to:
- Payment clause,
- Dispute clause,
- Confidentiality clause,
- Content rights,
- Termination clause,
- Post-termination clause,
- Indemnity clause, etc.
The above mentioned, details are the basic information about, Influencer, Influencer Agreement. Now let’s move towards Instagram Influencer Agreement and look at the specific clauses to be made a part of this agreement.
Instagram Influencer Agreement
At the current time, Instagram is the most popular site for advertisement, marketing, promotion and where the Influencer Agreement is used most. The celebrities, through their Instagram posts, stories, likes, bio, etc. promote the product. In consideration of this, they get a sufficient amount as monetary benefits to promote the brand/product.
Before starting to post the advertisement related to a product, celebrities enter an Influencer Agreement with that brand/product. They outline all their work, including but not limited to,
- When they are going to post a story about the product as an advertisement, like on every alternative day or daily and for what duration like 12, hrs, 20 hrs, 24 hrs. and in consideration of what they will get,
- Will they post photos/videos also and usually for posting a post, the amount is higher than the posting a story.
- Will they also use hashtags?
- Will they use the brand/product name in their bio also, etc.?
So, through the Influencer Agreement, the celebrities or influence accounts of Instagram enter into an Agreement i.e., Instagram Influence Agreement.
Important clauses to be included in Influencer Agreement
- Content-Type: The Agreement must clearly outline what type of content needs to be posted, post, story, videos and all other forms. The Agreement must not be ambiguous or uncertain about this clause.
- Creative Control: This is another important clause to be included in the Agreement. It includes that, whether the Influencer will create images/stories or the brand/company will provide the images, video, etc. there also needs to be a clause determining who owns the product of this collaboration.
- Duration: The duration of the Agreement must be mentioned. Till what time/months/year, the Influencer is bound by the Agreement and cannot endorse another similar brand.
- Payment Clause: The payment clause must be agreed upon by both parties. This covers the modes of payment like cash/cheques and schedule of payment like after every month or after every post, story etc., These all points need to be included in the payment clause to avoid any future disputes.
- Termination/post-termination clause: The Agreement must include the termination clause. What happens if the Agreement is terminated in between? The remedies to the sufferer party etc., need to be included in this clause. And what happens after termination, does the company is still bound to pay if the contract terminated in between etc.,
These are some essential clauses that need to be included in the Influencer Agreement. Apart from the above mentioned, there are other clauses like indemnification, dispute resolution, exclusivity, content approval, compliance etc. that also need to be considered while entering into an Instagram Influencer Agreement.
Precautions before entering an Influencer Agreement
- Laws: The companies before entering into the Influencer Agreement need to be well aware of the laws that regulate the Influencer Agreements in the country.
Example: The Australian Association of National Advertisers Code of Ethics rules require the Influencer to disclose that a post is paid endorsement of a particular brand or product.
- Fake Followers: The first and most important thing that the brands/companies need to look at is whether the Influencer has fake or real followers and whether they are paid or unpaid. Nowadays, many people have started increasing their followers overnight through follower’s apps, hacking etc. So, the companies need to be cautious about these accounts.
- Know about the Influencer: While entering into an Agreement with the Influencer, the companies/brands are suggested to know about the Influencer. Sometimes the Influencer is not an independent contractor, so it’s better to know common things like, whether the Influencer is an Independent contractor or employee of any other person.
Apart from this precaution, some other points need to be considered before entering into an Influencer Agreement like the expectation for work and remuneration, involvement of celebrity in any legal issue, background information, involvement in any illegal activity etc.,
Instagram Influencer Agreement plays a vital role in branding and publishing of the products. Instagram has been using various influencers to influence the buyers which give benefits to the marketers and also result in profits for the social media site. So, to have a legal written agreement becomes mandatory to be on a safer side. As the influencer promotes the services or products of a company which he or she is not so well aware of, it can sometimes create a dispute regarding the idea, timing, content objectives, etc. So, to have a written influencer agreement is a safe method to get work done smoothly as all the terms and conditions are laid down in the agreement which both the parties are bound to follow once signed.
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