Influencer’s Law: A Social Media Influencers Guide to Staying Compliant

Written by Wesley Henderson

November 22, 2021

Follow. Like. Post. Repeat.

This is a process that social media influencers have come to know well. Starting as a way for people to connect with their friends, social media has come a long way since MySpace first launched in 2003. With the emergence of platforms such as Facebook, Instagram, Twitter, Snapchat, TikTok, etc., many people have created careers out of posting and sharing with their followers. However, social media influencers should consider these legal tips to ensure they are following the law.

It’s not hard to stay compliant once you understand the legal framework. Keep reading and you’ll be ready to grow your audience and capture your earning potential as an influencer with ease of mind.

Make your life even easier by buying our influencer package that comes with all the templates you need plus a brief video with easy-to-understand tips from practicing attorney, Wesley Henderson.

What is an Influencer? And how does an influencer make money?

Twitter ushered in a new era of social media when it introduced the “follow” button. A follower is defined as being a devotee of a particular person or idea and giving social media users the option to follow people gave way to the rise of influencers.

An influencer is a person who endorses a product, whether it is a service, brand, or company, and shares it with their followers by posting it on social media. There are two types of endorsements that an influencer can engage in:

  1. Paid Endorsement. This is when a brand pays an influencer to endorse their product or service to increase customers or viewers. An example of this form of endorsement is when  Football star JJ Watt promotes Gatorade on his Instagram story.
  2. Unpaid Endorsement. This is when an influencer freely chooses to endorse a company’s brand without any financial agreement. An example of this form of endorsement is when a new mom shares her personal opinion on a new car seat that she purchased with her friends and followers.

Endorsement Contracts

Endorsement contracts are how you capitalize on your brand, so you should be thoughtful about the terms of this relationship. As an influencer, it’s important to understand what endorsers and advertisers are looking for. One of those aspects that you may encounter is “exclusivity.” Exclusivity is often a clause requested by advertisers, so you will want to be thoughtful about who you choose to work with because it may prevent another opportunity down the road. You may want to include a clause that gives you approval permission for any content. You know your audience and your brand. You should never be in a position where you cannot control the content. This brings us to another important clause to consider which is a termination clause.

These clauses and many other are very important to think through prior to establishing the relationship. This helps to promote a healthy business relationship between the brand and the influencer.

Get All The Contracts You Need as an Influencer Here

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Focus on inspiring your audience since Drafted Legal templates for influencers protects you legally.

Disclosures

If a brand is seeking an endorsement on social media, there are a few things an influencer should keep in mind regarding disclosures. A disclosure statement is an act of making something known to others, and they are only necessary when there is a material connection between an influencer and the referenced brand.

If you are endorsing a brand on social media, you must ensure that your disclosures are not buried in the post. An influencer always has to disclose their material connection clearly and conspicuously in each post that endorses the brand. This ensures that all followers, new or old, know that the post is an official endorsement.

Here are some tips to help make your disclosures compliant:

  • Use unambiguous language to describe the material connection
  • Use hashtags denoting that the post is sponsored or advertised
  • Disclose the relationship early in the post
  • Make sure you are only making factual, representative statements based on your own  experiences

Material Connection

It’s important for an influencer to understand the concept of “material connection.” The Fair Trade Commission Act — passed in 1987 and unfortunately before social media existed — is the framework within which influencers must operate. It regulates the supply, advertising, and description of goods and services. Although social media was not even in existence, the Fair  Trade Act has come to govern influencers and their endorsements, so you must have an understanding of its requirements.

As influencers gain more followers, many brands will reach out to inquire about securing an endorsement. This advertisement is based on a material connection between the influencer and the brand they are endorsing. § 255.5 of the Fair Trade Commission Act defines a material connection as an existing connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement. Examples of a  material connection include:

  • Relationships based on monetary payment
  • Employee or business relationship
  • Friendships or family relationships

Social Media Policy

Influencers should consider drafting a social media policy to set expectations for brands that may hire you as an influencer. A social media policy is a document prepared by an influencer that outlines how the influencer will use their social media platform. It is essential to provide as much detail as possible on the type of content the influencer will create. This can include information on formatting and length and how the influencer intends to promote the brands they endorse. However, it is important to have a clause stating that the social media policy guidelines are subject to change depending on any specific guidelines mentioned in the endorsement contract.

For more information about the guidelines associated with the Use of Endorsements and  Testimonials in Advertising, please visit https://www.ecfr.gov/current/title-16/chapter-I/ subchapter-B/part-255

Wesley Henderson

Hi, I'm Wesley! A business attorney turned entrepreneur devoted to simplifying how you protect your business and your assets. Like you, I'm an business owner so I get it and I started Drafted Legal to help you put in place simple and sound legal strategies so you can focus on your business and not worry about getting lost in legal nuances.

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