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With the rise in influencer marketing, Australian businesses are increasingly navigating complicated relationships with talent. Controversy around influencer reviews continues to unfold in Australian media, with recent revelations from a ‘food-poisoning fraud’ lawsuit revealing the potential impact that sour relationships can have on a business or influencer’s reputation.
While these brand relationships offer incredible potential exposure, leveraging trust between influencers and their audience to present a positive review, they also leave brands open to significant risk from brand and legal perspectives as legal frameworks struggle to keep up with changing technology and the evolving digital world.
Burch&Co’s Outsourced General Counsel Leader, Zoe Schwarz, emphasises that both businesses and influencers have a responsibility to inform and protect consumers and their interests, and mitigate risk to their brand.
A Clear Contract is Essential
Businesses can engage with influencers through paid arrangements or through a contra or gifted arrangement or a mix of both. Generally, a contra or gifting arrangement involves the gift of a product or service to an influencer in exchange for an authentic review to their audience. A paid influencer engagement is one where a brand seeks to work with an influencer as part of a paid campaign. Influencer marketing and advertising can have risks on both sides, and best practice is to prepare a formal contract governing the arrangement.
A clear contract can mitigate the risks and give both brands (business and influencer) certainty and set expectations. Outlining payment terms, product access and samples, requirements and service details are key components of any good agreement, but influencer marketing specifics such as IP ownership or licencing, required disclosures such as #paidpartnership or #ad and exclusivity are the more important considerations for protecting your business and brand.
Be Aware of Regulatory and Legal Compliance
Paid influencer endorsements need to comply with Australian Consumer Law (ACL) and brands should be mindful of specific industries where marketing messaging is more heavily regulated, such as healthcare, health products and financial services.
It’s important for businesses engaging with influencers to be aware of any regulation applicable to marketing their specific services and marketing and advertising generally, whether that is the Australian Association of National Advertisers’ (AANA) Code of Ethics, Therapeutic Goods Administration’s Advertising Code or disclosure requirements under the ACL, which is administered and enforced by the Australian Competition and Consumer Commission (ACCC).
Seek Professional Advice If in Doubt
Influencer marketing can offer authentic connection with a brand and open up major marketing potential to a big and often targeted audience. Considering all possible scenarios and implications is important to ensure minimal risk of any legal implications, consumer or brand backlash for both the brand and the talent in more complex situations. Burch&Co is able to consult on agreements to ensure all legal, regulatory and practical considerations are taken into account.
When done well, influencer engagement in this industry can build authentic brand awareness among the influencer’s following, and may even inspire a more widespread conversation. Burch&Co client, Monash IVF, recently partnered with Australian lifestyle influencer, Tully Smyth, in the hope to educate and empower more Australians and raise awareness of the importance of being proactive about fertility and egg-freezing. Tully’s content spoke to how the process of egg freezing works, applying a personal lens to share her own experiences with Monash IVF’s services to her audience in an authentic and legally compliant manner.
Zoe Schwarz, Senior Associate General Counsel
