Legal tips for managing your influencer relationships

Here are some strategies to keep the FTC at bay and help protect your brand reputation

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Credit: Illustration by Ad Age. Composite images istock

Social media influencers can be an important part of a brand's marketing arsenal, but care and attention are necessary to reduce the potential for legal and reputational risks. The Federal Trade Commission has signaled that it will continue to vigorously enforce truth-in-advertising compliance related to influencers, and the speed at which information and controversy spreads raises the reputational stakes related to influencer misconduct.

Keep the FTC at bay and help protect your brand reputation with a legal tune-up for a more effective, sustainable influencer program. Here are our top tips for 2019:

Revisit the plan

Revisit your written influencer plan. For example, a good plan should contain a Code of Conduct to set expectations with influencers, particularly regarding how to make clear and conspicuous disclosures of the material connection between the influencer and brand (e.g., with text such as #ad or #[Brand Name]Ambassador) and reminding influencers that the FTC can enforce against both brands and influencers (see, e.g., the influencer warning letters).

The plan should also include a reminder to vet influencers to ensure that there are no ties to other brands or reasonably identifiable prior acts or social media posts that would prohibit the relationship or make it a poor fit for the brand.

Your plan should also identify an internal process for monitoring (more on that later) and encourage the use of agreements and terms that are right-sized for the relevant relationship (e.g., micro-influencers versus celebrities). Historically, the FTC has factored a brand's processes into its decisions about whether to bring an enforcement action, or issue warning or closing letters.

Train the team

A written plan is useless without reasonable training. Train your marketing team, ad agency and anyone else interacting with influencers about the applicable law and the brand's influencer plan and process. Train your influencers, too. In-person trainings are often best and would ideally occur at least once a year. Supplement trainings with written policies, reminders and tips throughout the year.

Monitor the influencers

Active monitoring of influencers is the best way to know whether your written plan and trainings are working. Assign specific people to regularly monitor examples of influencer activity. Make sure those people know whom to report to if they identify issues, and address problems promptly.

Have an exit plan

What is your ability to end an influencer relationship if previously unknown allegations of misconduct come to light, even those that might be decades-old? This question is especially important in light of the #MeToo movement. Revisit your contract termination terms to ensure that they give the brand enough flexibility to end a relationship that becomes undesirable.

Consider new tactics and related laws

CGI and bot influencers are on the rise. California recently passed the country's first anti-bot law (to become effective on July 1), which makes it unlawful for "any person to use a bot to communicate or interact with another person in California online, with the intent to mislead the other person about its artificial identity for the purpose of knowingly deceiving the person about the content of the communication in order to incentivize a purchase or sale of goods or services in a commercial transaction" unless the person discloses that it is using a bot. And in June 2018, an FTC spokesperson noted in a CNN article about the growth of CGI influencers that while there is no specific guidance on such influencers, the posts must be identifiable
as advertising.

In other words, consider addressing CGI and bot influencers in your written influencer plan, including related disclosures.

If you're referencing or using cryptocurrency, you need to know that cryptocurrency businesses are regulated by the SEC, which may require disclosure of not only the connection but the amount of
any payment.

And, of course, combining influencer programs with contests, sweepstakes, or any specially regulated products (e.g., USDA- or Food and Drug Administration-regulated products) may trigger additional regulatory requirements.

Repeat and refresh

Schedule regular intervals when you commit to revisiting your plan. Learn from any problems that arise and update your process as necessary. And if you're doing something new or cutting-edge, it's always a good idea to check in with counsel.

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