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February 1, 2019 Vol. 74 No. 2 Back to Bulletin Main Page

Europe Conference: Session Will Spotlight the Meteoric Rise of Online Influencers

When about 300 brand owners and intellectual property (IP) professionals gather February 18‒19 in Paris, France, for INTA’s 2019 Europe Conference: Embracing Change, they will be exploring myriad changes that impact their brands and their professional lives.

Among them is the increasing utilization of online influencers to help promote brands and advance a company’s agenda. In a highly relevant session entitled “The Meteoric Rise of Online Influencers,” panelists will provide a unique perspective on the selection process, the contractual relationship, and the future of brand partnerships with online influencers.

The panel will be moderated by Paul Jordan (Bristows, United Kingdom), and his fellow speakers will be Margret Knitter (SKW Schwarz Rechtsanwaelte, Germany), Sophie Radcliffe (Challenge Sophie, United Kingdom), Aaron Riedel (Aaron Riedel Law PLLC, USA), and Sanne Vloet (Health and Wellness Advocate, Model & Vlogger, USA).

The INTA Bulletin spoke with some of the speakers about what brand owners need to know about this burgeoning marketing trend:

Why is this session timely?
Paul Jordan: There are a number of reasons why this session is increasingly relevant right now. Leading influencers are now becoming major brands in their own right. No longer is it the case that brands simply dictate terms to their preferred online mouthpieces. Additionally, regulators are taking an ever-expanding role in policing influencer campaigns. This scrutiny will continue to increase as we see local law and regulation continue to expand across Europe.

As an influencer, how are things different in 2019?
Sophie Radcliffe: Influencer marketing used to be like the Wild West, where no one knew how much to pay or charge, how to measure return on investment, or how to choose with whom to work. Many brands looked at follower numbers alone, which of course led to many influencers buying followers to increase the likelihood of brands wanting to work with them.

However, in 2019, it’s a very different landscape. Everyone is fully aware of the importance of engagement, authenticity, and how much the influencer/brands align in their values and mission. These are now held to be more important than follower count and reach. Also taken into significant consideration are things like what the influencer is like to work with, the creativity of the posts, and what they do outside of Instagram—the whole package. Finally, brands are digging deeper into the analytics behind the numbers before choosing to work with an influencer; they want to know demographics, location of followers, and most importantly, engagement on content.

Sanne Vloet: Another interesting development is up-and-coming influencers who are creating false endorsements in order to build their profiles. Some use “#Ad” to label posts displaying or endorsing desirable products, misleadingly implying that a leading brand is partnering with the influencer. This could pose difficulties for both brands and official influencer partners in the future.

Just how powerful is the reach of online influencers today, and what do you see ahead?
PJ: The reach of influencers can be immense. But the numbers are not the whole story. Brands are looking for authenticity and a high level of engagement. Some influencers have a reasonably modest number of followers, but boast incredible loyalty. This is often the case for niche interests—for example, stamp collectors or train enthusiasts. These days there is almost a market for anything, and advertisers want to reach their target consumers with laser focus.

What are some of the main factors influencers consider before collaborating with a brand?
SV: It is increasingly important for influencers to align their interests and values with any brand partner. It is not about taking the biggest check. Followers are loyal and generally share common values and interests; this must be respected to maintain credibility. Leading influencers are now more selective than ever when it comes to forging commercial relationships.

While there are enormous benefits when brands engage online influencers, what are some of the potential drawbacks?
PJ: The key drawback from a brand’s perspective is control—control over content created and control over a partner influencer’s behavior both online and in the “real world.” There have been a number of very high-profile episodes recently involving influencers behaving in an offensive or antisocial manner. Clearly, where a brand has worked hard to identify and cultivate an authentic relationship with an influencer, any adverse publicity associated with the talent can directly result in harm to the brand.

This highlights the need for effective contractual provisions dealing with ethical and moral obligations, along with robust monitoring processes to help ensure a brand is not tarnished as a result of an influencer’s bad behavior.

What are some of the key contractual terms?
Margret Knitter: Lawyers have to differentiate on which side they advise. When I advise companies, a few points are particularly important: The influencer should first be obliged to label properly. From a brand’s perspective, it makes sense to keep this vague, i.e., simply to oblige the influencer to label according to applicable legal standards. The reason is that the applicable law is interpreted differently by each judge. And as the answer to correct labeling is still unclear in Germany, it would not be wise for a brand to be too prescriptive in terms of labeling.

Furthermore, it is important from a brand’s point of view to regulate when and how often the influencer has to post, and to ensure that the company is entitled to all rights of use to the posts.

Aaron Riedel: From the talent side, the key contractual terms of talent/influencer agreements cover a variety of issues, including (1) creative control and approval; and (2) exclusivity clauses.

When it comes to creative control and approval, it's important to establish upfront who has the primary control over the creation of the deliverables to avoid disputes down the road. If the talent is granted the primary creative control, the parties should establish any approval processes, including setting the rounds of submissions and feedback.

In terms of exclusivity clauses, the parties should understand and agree to any other competitors or brands that talent can’t work with and for how long. The parties should also address several related questions: Are there any blackout dates before and after social posts during which the influencer can't post anything at all, or only sponsored content? If there is another offer from a competitor, is there a buyout provision? The answers to these questions can often change the nature of the deliverables and the payment amount.

Regulators have recently begun to clamp down on the product endorsement practices of online influencers. As a trademark practitioner, what are the key things you need to know?
PJ: It is all about transparency. Brands and online influencers must avoid any deception in the marketplace and reveal any material commercial connection. Whenever a brand pays an influencer or provides a free product to an influencer and exerts some level of editorial control over any resulting content, the influencer must identify any such post or video as an advertisement.

In the United States, United Kingdom, and increasingly across Europe, “#Ad” is the most widely used and understood label. The labeling requirements are there to help ensure consumers can easily differentiate between influencers’ honest, personal opinions and recommendations, and paid-for or incentivized promotional speech.

On the surface, one might think that a marketing/communications department, not IP counsel, should address relationships with online influencers, but why and where is it vital for IP counsel to weigh in?
PJ: Increasingly, leading brands will have standard social media guidelines that address partnerships with online influencers. As with any deal, there are some key considerations to discuss and agree on upfront. For example, which party will have overall editorial control? Who will own the intellectual property in any content created as part of a campaign? What are the precise labeling requirements? When can a brand remove content?

Involving IP counsel early in the process can serve to avoid major complications mid-campaign. A poorly managed promotion could result in the loss of valuable IP, unwelcome scrutiny from a regulator, and/or damage to a brand’s reputation.

Learn more about the 2019 Europe Conference: Embracing Change here.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

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