When your business is considering sponsoring a sportsperson or partnering with a social media influencer to promote your products or services, it’s crucial to understand how to safeguard your business interests.
It’s not uncommon for a well-known sportsperson, influencer, or celebrity to make negative headlines, prompting the brands they endorse to quietly distance themselves after facing backlash. This type of marketing collaboration comes with inherent risks.
Small businesses now have numerous opportunities to engage with emerging sports stars and micro-influencers. Regardless of the level of support you provide, having a contract in place is essential to protect your business reputation. Remember, a brand takes years to build but only seconds to destroy.
The foundation of such a contract lies in clearly outlining the terms, including:
The Scope of Work
It’s crucial to specify whether the individual will promote the entire business, specific products, or services. Will they showcase the products in use or simply talk about them? If they use the products, will it be exclusively or alongside other items? Which social media platforms will they utilize for promotion? Will it be limited to one platform or extended across multiple channels? If they have a podcast, do you expect them to mention your business there as well as on their Instagram feed?
If they are required to attend an event, the contract should clearly define the duration of their presence, their responsibilities at the event, the individuals they will interact with, whether photography or filming is permitted, whether public speaking is expected, and if they need to wear a specific item of clothing and how to style it.
Duration of the Partnership
If the collaboration involves advocating for your brand or values, it typically signifies a long-term commitment. It’s advisable to thoroughly vet potential partners before finalizing an agreement. Long-term partnerships help establish a connection with your audience, with the influencer offering insights into their experiences. However, longer partnerships also increase the risk of disagreements or unforeseen events.
Short-term relationships, such as a single social media post or providing goods/services for a review, should reflect the temporary nature of the arrangement.
All contracts should have clear start and end dates, allowing both parties to give notice if needed.
Execution of the Partnership
Will the individual sample and discuss a product, demonstrate its use and results, feature it in the background of their content, or prominently display it as furniture? Will they be required to mention it in interviews or make themselves available for press interactions?
Given the various ways to engage someone, careful consideration is needed. All activities must comply with the Advertising Standards Authority guidelines for influencers, clearly disclosing paid partnerships or advertisements.
Payment Terms
How will the individual be compensated—via a lump sum or staged payments tied to specific milestones? Are there bonuses if sales exceed expectations? Can payments be withheld for non-compliance with the contract terms? Is there a provision for additional compensation requests? Avoid agreeing to upfront payments before assessing the results.
Termination Clause
This is a critical aspect as it allows swift termination without repercussions if the individual’s actions could tarnish your business reputation. For instance, if they engage in unlawful activities, exhibit inappropriate behavior, or express conflicting values.
Thoroughly vetting potential partners is essential to prevent issues. Define clear boundaries—e.g., promoting a vegan product but being seen consuming meat—to protect your brand.
For many celebrities and influencers, these collaborations are vital, and they aim to uphold their end of the deal. Transparency about concerns, especially for first-time collaborations, is key. Address all aspects in a well-drafted contract and ensure both parties adhere to the agreed terms.
Peter Kouwenberg is a partner at Taylor Walton Solicitors.
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