FabFitFun. Inc. (“FabFitFun”), the seasonal beauty box-by-mail company, has sued JFF Entertainment, LLC (“JFF) for breach of contract. In its lawsuit, FabFitFun alleges that JFF never provided the social media endorsements that it had contracted to provide from actors Cara Delevingne, Sarah Hyland, and Ashley Benson. FabFitFun was careful to point out that the lawsuit was brought against JFF and not any of the individual actors named above. In fact, it is reported that two of these actors were never even
made aware of the underlying contract between FabFitFun and JFF. This lawsuit is a good reminder that influencer law involves more than merely complying with the Federal Trade Commission’s (“FTC”) guidelines. Among other considerations, it is important to carefully draft influencer marketing agreements to prevent future lawsuits and regulatory investigation.
What Should be Included in Influencer Marketing Agreements?
Influencer Marketing Agreements
Over the years, we have seen brands increasingly seek out the endorsement of celebrities and social media influencers to extend their audience reach. As this practice grew more popular, so did the complexity of compensation arrangements involving social media endorsements. Given that some influencers are receiving six-figure contracts for their endorsements, brands teaming with influencers should create written contracts that carefully detail the expectations of both parties. Some important
contractual terms include:
- Disclosures. Recently we have blogged about how brands and social media influencers may be investigated by the FTC if they do not include disclosures that comply with FTC guidelines. A well-drafted contract will explain how those disclosures must be: 1) properly communicated; and 2) prominently featured. For instance, FabFitFun provides representative examples of compliant posts in each of its influencer marketing contracts.
- Content. Given that posted content is associated with a specific brand, brands will want to manage/control the character and tone of each post, so that it does not reflect negatively on brand image. Topics that companies may wish to avoid are politics, drugs, alcohol, and sex.
- Deliverables. Brands should be specific about the amount of content that they expect influencers to post. For example, FabFitFun was very specific with JFF that each actor should record two unboxings on Facebook Live, post twice on Instagram and create two Instagram stories that should each be five to seven slides long. Brands will also want to set definitive start and end dates to closely control the duration of their marketing campaigns.
- Payment. It is important to specify how compensation arrangements work. Creative fee structures can be agreed upon based upon social media clicks, likes, or payment via free products or services. Regardless of how compensation is structured, to avoid future disputes, it is important that the method of payment is made crystal clear in the contract.
Additional contractual terms include pre-approval of content, contract termination, and the tracking of social media analytics.
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Complying with Influencer Law
Although influencer law headlines tend to focus on FTC investigations, the scope of influencer law is far broader. Brands and influencers must be aware of not only FTC guidelines and contracts, they must also consider intellectual property rights, rights of publicity, and correctly classifying influencers as independent contractors versus employees. Given the foregoing, it is recommended that brands work with knowledgeable counsel before contracting with influencers to reduce regulatory and legal risk.
If you are commencing an influencer marketing campaign, or if you are facing an FTC investigation or lawsuit, please email us at info@kleinmoynihan.com or call us at (212) 246-0900. The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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