Legal Problems for Businesses That Use Content Creators and Social Media Influencers
Hiring social media influencers and content creators can be an excellent way to spread the word about your business. By tapping people in your niche with large followings, you can increase your chances of finding customers and making sales. However, working with influencers isn’t always so smooth. In fact, it can bring up a range of legal issues. That’s why before you decide to tap into this resource, you should research legal problems for businesses that use content creators and social media influencers.
Do you need experienced and effective representation to assist you with business legal issues? Then get in touch with Robin D. Perry. The Law Offices of Robin D. Perry & Associates provide vigorous representation to clients and are a goal- oriented and values-driven firm. We develop creative strategies to win every case, every time. Reach out to us today to schedule your consultation.
How Businesses Work With Influencers and Content Creators
Over the past decade, as social media has exploded and new platforms like Instagram and TikTok have emerged, businesses have teamed up with influencers and content creators more and more. This has sparked a new term, “influencer marketing,” which involves paying an influencer to create targeted content for a business.
According to Influencer Marketing Hub, the influencer marketing industry grew from $1.7 billion in 2016 to $9.7 billion in 2020, and in 2021, it reached $13.8 billion. It’s only expected to grow again in 2022. Now is a good time to tap into influencer marketing for your business.
So, why should you try it? Other businesses do this in hopes of expanding their audiences, building their social media followings, and ultimately getting new customers. Influencer marketing is so powerful because it’s a new way to do word-of-mouth advertising. People are more likely to trust a person they are familiar with over an ad.
If you can partner with a trusted person in your niche, it could do wonders for your business. But you’ll need to know two things first:
- It’s usually a big investment. Many influencers will charge thousands of dollars for a story or a post on Instagram, TikTok, or Facebook. While it may seem like a lot, the ROI could be huge. It’s important to ask them for statistics and results from previous campaigns to know that your investment is going to pay off.
- There are rules and laws you’ll need to follow. If you don’t, you could get into trouble.
Let’s dive into some of the rules and laws before you decide to work with an influencer and content creator.
Make Sure You’re Not Going Against the FTC
The Federal Trade Commission makes it clear that an influencer must disclose their paid partnership with you. Otherwise, both of you could get into trouble. Among some of the rules that must be followed, the influencer needs to include information about your paid partnership in written and verbal form if they’re creating a video. They should also include hashtags like #sponsored and #ad.
Note that if an influencer decides to endorse your business on their own, and you’re not paying them, they don’t have to follow any rules. But any time they receive money or payment in the form of free products or services, they’ll need to disclose your relationship.
Watch Out for Copyrights and Trademarks
If an influencer creates a video for you, uses a song that is copyrighted or a logo that is trademarked, or takes a picture and includes it in a post without paying for it or asking for permission, both of you could get into trouble. To be safe, you may want to ask the influencer to create original content as opposed to using anything that’s already been created. Otherwise, it could lead to some legal battles.
Thoroughly Research the Influencer
Influencers and content creators are operating independently, and they may speak their minds – which can result in a mess of issues for you. Don’t just look at a few posts and then decide to team up with an influencer. It’s best to follow them for an extended period of time and/or research their past posts thoroughly. If they’ve said something that’s offensive, it could hurt your sales – even if it’s completely unrelated to your business.
Come Up With a Scope of Work Agreement
While private messaging with an influencer and sending them a Venmo payment may seem like a good idea, you’ll need to be much more thorough when it comes to setting up your partnership. Create a scope of work agreement that you both sign so you know what expectations both of you have for the campaign. Include things like:
- Timeline for the project
- What kind of content you expect them to make
- The payment for the posts/stories
- Who is going to own the content – you or them?
- Any reason for terminating the relationship (+ a kill fee if necessary)
Also, figure out how you’re going to pay the influencer. They will need to provide you with a W-9 for tax purposes if you’re paying them $600 or more. You don’t want to face any issues at tax time, especially with the IRS tightening its rules.
Connect With a Business Lawyer
A business lawyer is going to know the ins and outs of influencer marketing, content creation, and the legal issues that accompany them both. Your lawyer can advise you on how to create a scope of work agreement and how to go about working with an influencer so that you don’t run up against any trouble. Then, you can feel secure in your transaction and that it’s only going to result in positive results for your business.
Contact Robin D. Perry & Associates
If you need help with legal issues and content creators, then get in touch with the Law Offices of Robin D. Perry & Associates today. No matter what, we will fight on your behalf during your time of need. Call us at 562-216-2944 or contact us on our website to schedule your consult today.
Attorney Robin D. Perry has been part of the Long Beach Community for over 25 years handling business litigation, employment litigation and advising, criminal defense, personal injury and code enforcement defense for businesses.
