Marketing is a challenging task even for large companies. This is why it’s so important for small businesses to truly understand what matters when engaging an influencer to market your product or service.
We believe the five most important elements for any small business to consider when engaging an influencer for marketing are:
- Fee Structures
- Content Rights
- Grounds for Termination
- Consumer Law and Code of Ethics
Small businesses all have one common goal and that is to market and grow their product or service. When engaging influencers to reach a certain audience, it is vital to consider an exclusivity clause to restrict the influencer from also working with a competitor of your business.
You have the right to impose an exclusivity clause on the influencer to ensure that your brand is protected.
Fee structures are a vital element when engaging any influencer for marketing purposes and can differ from influencer to influencer. Your business should provide a model which best suits your desired task for the influencer.
- Will you be paying the influencer a set fixed fee?
- Will the influencer’s fees be calculated based on a conversion of sales that their content generates?
It is very common to provide the influencer with a specific discount code to supply to their audience which allows your business to track the generated sales from that influencer’s contract. There are multiple ways to structure fees in this instance and we suggest you always discuss this method with your accountant or lawyer.
It is always important for your business to have content to publish for any marketing strategy. Retaining the republishing rights to the content provides your business with the ability to continue using the content posted by the influencer to market your product on another platform. We see this as a crucial matter for any business looking to secure the content for future marketing.
Grounds for Termination
As with most business transactions, there will be “ups and downs”, but it is important to ensure that your business is protected. Although these conversations are not pleasant, the agreement needs to provide for grounds for termination.
Sometimes engagements can be for a fixed term or can provide for an ongoing collaboration and partnership. It is important that you allow your business certain protections to terminate the collaboration, whether fixed or ongoing, with the influencer.
Your business will need to consider elements such as:
- the influencer acting against company’s values,
- failure to post the required content, or
- even providing false and misleading information against your business, product, or service, which is in direct breach of the Australian Competition and Consumer Laws.
If your business is providing a fixed term collaboration – consider recovery of paid fees for work not yet published. We suggest that neither party simply terminate the agreement at will, as the grounds for termination should protect both the business and the influencer.
Consumer Law and Code of Ethics
The Australian Competition and Consumer Commission (ACCC) and the Australian Association of National Advertisers Code of Ethics (Code of Ethics) continue to alter and adapt to new trends in media marketing.
It is important to read and understand these codes and laws surrounding media marketing and ensure your business is not in breach.
A vital part of ensuring your company is compliant with these laws and ethics is to ensure that all engagements with influencers are labelled correctly as advertisements.
Your business should consider how the content is developed:
- will your business provide a specific brief for the influencer to follow and then require the content to be approved prior to publishing? Or
- will the influencer have free reign over creating and publishing the content?
That’s why we always suggest the Influencer be required to obtain the business’ approval to the content prior to posting any advertisement or marketing item.
For more information pertaining to the rules and regulations around this, please see our article, Consumer Law and Code of Ethics – Social Media Advertising.
This article authored by Tessa Calver-James, Senior Associate and Jameson Smith, Law Clerk.
For further information or if you would like our assistance with reviewing and/or drafting your employment policies, please contact our Employment Law and Industrial Relations team on 07 5539 9688 or leave an enquiry.