Influencer Marketing: Is It Dead—or More Alive Than Ever?
In a global market, the temptation by brands to use celebrities—whether in the traditional sense of the term or those who have become famous due to the growth of digital communications—has required increased scrutiny from IP lawyers to ensure that brands are protected. Muireann Bolger reports.
“Data compiled by influencer marketing platform Creator IQ earlier this year showed that 80 percent of marketing directors found influencer marketing effective.”
Ricardo Alberto Antequera, Antequera Parilli & Rodríguez
In the marketing landscape, the COVID-19 pandemic has witnessed new trends and habits among consumers, along with challenges for brands in coming to terms with how they should approach influencer marketing, according to Ricardo Alberto Antequera, Managing Partner, Antequera Parilli & Rodríguez (Venezuela). Despite the challenges, one thing is certain: influencer marketing has thrived during the global health crisis.
Mr. Antequera’s remarks came during an on-demand program, Influencer Marketing: Dead or More Alive Than Ever? in which he served as moderator. One of the panelists, Margret Knitter, Partner, SKW Schwarz Rechtsanwälte (Germany), said the COVID-19 pandemic has prompted a growth in influencer marketing worldwide. “Brands are spending more money on influencer marketing, which is expected to become a US $9.7 billion industry this year,” she said.
In addition, she cited figures from a recent report by Webedia Group (Germany) noting that since March influencer marketing on Instagram has grown by 0.4 percent in Germany, 5 percent in the United States, and 20 percent in Poland.
In Germany, 40 percent of younger consumers aged between 16 and 24 reported at some point buying a product as a result of an influencer, Ms. Knitter said, adding: “It shows how important influencer marketing has become in Germany, even though it has been quite an unusual year.”
Panelists pointed out the “why” behind this trend. According to Mr. Antequera, data compiled by influencer marketing platform Creator IQ earlier this year showed that 80 percent of marketing directors found influencer marketing effective. Moreover, two-thirds increased their budgets for this social media strategy in 2020.
“Brands are spending more money on influencer marketing, which is expected to become a US $9.7 billion industry this year.”
Margret Knitter, SKW Schwarz Rechtsanwälte
Brian Murphy, Partner, Frankfurt Kurnit Klein & Selz, P.C. (US), noted “it became easier” to do more influencer marketing during the pandemic.
“We’ve all learned that we can work remotely, so many traditional celebrity deals have become more like influencer deals. Our clients have been sending high-end cameras to the homes of celebrities and directing them by Zoom,” he relayed.
While logistics may be doable, brands still need to be cognizant of legal restrictions in specific regions when it comes to influencer marketing.
Ms. Knitter offered Germany as an example. She noted that brands’ planned investment in influencer marketing there has been complicated by a lack of clarity from the courts.
In a 2017 case, the Higher Regional Court of Celle ruled against the drugstore chain Rossman, arguing that consumers would not understand the word “ad” in an influencer’s post. It held that in the country, influencers should use the German words “werbung” (promotion) or “anzeige” (advertisement).
The ruling presented difficulties for international brands launching global campaigns, Ms. Knitter said. She added that courts in Germany have continued to hand down contradictory rulings in cases involving influencers.
“It’s very complicated to tell my clients that ‘this is allowed’ and ‘this is not.’ We have no certainty in Germany,” said Ms. Knitter.
“We’ve all learned that we can work remotely, so many traditional celebrity deals have become more like influencer deals.”
Brian Murphy, Frankfurt Kurnit Klein & Selz
In the United States, marketers and their IP lawyers should pay close attention to the U.S. Federal Trade Commission (FTC)’s endorsement guidelines when promoting products. According to Mr. Murphy, the FTC has jurisdiction over many different issues including deceptive advertising practices. Those guides cover any kind of endorsement or testimonial that is used in advertising and media, and they have been applied to influencers. The agency looks at all advertising claims and applies what it calls a “performance standard,” he added.
Under this standard, influencer marketing must be transparent, what the influencer says must be honest and true, there must be an element of typicality, and every claim must be substantiated.
“It is not only the influencer who is responsible for compliance; it is also the brand,” Mr. Murphy cautioned.
“One thing a brand does not want is to use an influencer who promotes the same products from more than one brand; that will damage the brand.”
Michael Liu, Hylands Law Firm
Another panelist, Michael Liu, Partner, Hylands Law Firm (China), said brand owners need to prioritize protecting their reputation when selecting influencers. This includes setting clear parameters with the influencer during contract negotiations and paying close attention to the legal provisions of their contracts.
“One thing a brand does not want is to use an influencer who promotes the same products from more than one brand; that will damage the brand,” he said.
Moreover, Mr. Liu said: “What influencers say or do could kill a brand overnight. You need to be very careful with legal documents and you need to find out who the influencers are, and to address any outstanding questions. You need to pick up the phone and call IP lawyers.”
IP lawyers can make a significant difference for brands when it comes to the drafting of contracts and guidelines for the influencer’s marketing, agreed Ms. Knitter.
“It’s very important to lay down how the influencer should promote the product. The brand needs to have control,” she said. “A competition clause makes sense from the brand’s perspective because, of course, they don't want the influencer to promote two different shampoos.”
Noted Mr. Murphy: “Influencers are speaking on behalf of the brand and, under German and U.S. law, you are responsible for what they say. It is essential to have agreements in place with these influencers that contain all the necessary provisions as well as a representation and warranty for non-infringement.”
This session is available on demand to Annual Meeting & Leadership Meeting registrants now through January 10, 2021.
Monday, November 16, 2020