The rising star of the social media influencer

Traditionally, fashion and luxury brands have promoted their products using celebrity or sporting endorsements on mediaincluding television, print and publically displayed advertisements. However, the dawn of social media has dramaticallytransformed marketing and advertising campaigns, which are now often built around social media platforms and individuals withextensive online followings, known as influencers. While the rising star of the social media influencer allows targeted engagementat scale, it is not without legal and commercial risk.

Importantly, when using influencers, brand owners should consider whether they have a reasonable degree of control overposts, ie, a contractual relationship, and whether the advertising draws the attention of the public in a manner calculatedto promote the product. If these elements are present, brand owners should take steps to address associated legal risks,particularly with respect to ensuring compliance in circumstances where regulators may impose significant civil penalties.

Compliance

Brand owners should ensure that posts do not contravenesocial media platform policies, advertising codes, guidancenotes from regulators and applicable consumer laws −particularly requirements to identify sponsored content.While a lack of compliance has obvious cost implications, itcan also damage a brand’s image and reputation and erodeconsumer trust and confidence, which can have long-lastingdetrimental impacts.

Each jurisdiction’s compliance requirements may vary,but from the perspective of Australian law, brand ownersshould, at a minimum:

• ensure the use of inbuilt paid or sponsored descriptions under the poster’s account name where available, or ensure that such posts incorporate hashtags such as #ad, #spon or #sponsored and
• maintain awareness that certain hashtags and relatively new features that allow tagging with pricing and descriptive information have the potential to convey representations about products that may be captured by applicable consumer laws.

Content and control

Depending on the value of the intellectual property to thebrand and/or remuneration paid to influencers for posting,brand owners should also set out the terms of engagementin some form of written agreement.

Whether this agreement should be formalized (such as anexecuted agreement) will depend on the sophistication ofthe influencer and likelihood of enforcement; however, itshould contemplate:

• the ownership of content
• moral rights consent if IP is assigned
• post/brand guidelines and approval processes
• indemnities for infringement of third-party IP, such as copyright or trademarks, and any damage that may be caused to the brand if the influencer goes off-message and
• warranties about the influencer’s reputation confirming that there are no matters that would bring the brand into disrepute by using the influencer.

Unsophisticated parties

Brand owners should exercise particular caution with thegrowing use of micro-influencers.

Micro-influencers have smaller followings but their followersperceive them as having greater authenticity; they alsotend to capture previously untapped market segments.These posters tend to be less sophisticated and unaware ofregulations that apply to their posts; in some cases, they maybe minors.

In such circumstances, it is particularly important forbrand owners to have adequate education programs inplace, maintain active monitoring of sponsored contentand complete due diligence exercises before using theseinfluencers.

Above all, the key takeaway for brand owners operating inthe online era is to remain transparent, as a guiding principlewhich will not only reduce the legal risks for the business,but also build and maintain trust with consumers.