Whether you call them influencers, brand advocates, or goodwill ambassadors, social media content creators represent a rapidly growing marketing segment, with companies set to spend up to $15 billion on influencer marketing by 2022.
As more and more businesses move toward using content creators and influencers in their marketing campaigns, and as the percentage of marketing budgets spent on content creators grows, the question becomes how to effectively paper these transactions to protect both content creators and the businesses that hire them.
The use of content creators for marketing allows businesses access to targeted demographics in an easy, relatively inexpensive manner, and the quality of traffic driven to businesses from content creators is often seen as better than traffic coming from other sources. Influencer marketing, especially ads in stories, has a significant impact on click-through rates because the content feels less like an advertisement to viewers. Consequently, viewers may be more inclined to trust the ads and to purchase products featured. With changes to how apps can track user activity and therefore how brands can use that information to target ads to their desired audiences, even larger portions of marketing budgets may move toward the use of content creators as time goes on.
If your business hires content creators for marketing campaigns or has ongoing relationships with content creators, having effective and efficient contracts with your influencers is critical to protecting your business. Alternatively, if you are a content creator, the contracts you sign as you work with companies are critical to building your brand and maintaining your own business. The contracts between brands and content creators should cover everything from employment status, to the payment and posting terms, to the ownership of intellectual property, to the requirements set forth by the Federal Trade Commission (FTC) and truth in advertising, and even what happens if either the brand or the content creator does something that results in being “canceled,” or how the parties can part ways.