Expert Lawyer Explains Why Brands Are Increasingly Choosing To Work With Influencers
In line with the demands of next-generation e-commerce, and following the onset of the pandemic, many brands have centred their focus on the use of social media influencers to promote their products and services. In doing so, brands have leveraged some of the by-products of lockdown restrictions and government guidance to stay home, such as: the heightened use of devices, the enhanced reliance on online shopping, and the increased use of social media platforms to virtually stay connected.
Retailers that have quickly adapted and pivoted to “the new normal” have reaped the benefits of being able to readily respond to changing consumer demands through influencer marketing. In fact, research reveals that 87% of shoppers are inspired by an influencer to make a purchase; a statistic that indicates the likely return on investment.
Brands are increasingly choosing to work with influencers for the following reasons:
• Targeting: Through identifying an influencer with a specific following, a brand is to reach a new, or a certain desirable, demographic.
• Inspiration: As powerful marketers, an influencer will be in-tune with their audience’s demands and niche interests, enabling them to pitch a product to their followers in a way that sells. Who needs a personal shopper, when you have an influencer for inspiration?
• Convenience: Brand partnerships on platforms such as Instagram, TikTok and YouTube allow consumers to quickly and easily (by clicking a link) purchase a particular product or service that an influencer is promoting. No time is wasted searching, and if products come back in stock, the influencer will have it on their agenda to update their followers to ensure they gain their commission.
• Reviews: An influencer can provide a product testimonial or endorsement that their following automatically trusts, as they continue to evolve to be a go-to source for new information and product recommendations. Whether it’s a digital-first influencer, or a reality-TV-star-turned-influencer, a loyal audience will respond to an influencer’s relatable feedback, and will make purchasing decisions accordingly.
• Experience: Influencer marketing has the power to enhance the shopping experience for the consumer by promoting a brand or product discovery in an entertaining way. An influencer provides an authentic voice to tell a story on behalf of the brand, which can span several weeks, months or years depending on the relationship built between the brand and the influencer. It also opens the opportunity for social selling, whereby an influencer or the brand can interact with prospective customers over social media and answer any questions they may have, which in turn cultivates an emotional connection with the brand.
• Partnerships: It’s a two-way dialogue between the brand and the influencer whereby a brand seeks the authority of an influencer in knowing their market. Many brands have also worked with influencers beyond promotion, to actually collaborating with an influencer to create product ranges. An example of this is @mrshinchhome (a cleaning phenomenon with over 3.8m Instagram followers) who is now a long-term brand ambassador for P&G. P&G recently launched a line of Mrs Hinch-branded fabric softener, with scents selected by none other than Mrs Hinch herself.
A notable brand that is leading the way in digital marketing is L’Oréal, who recognised the power of using micro-influencers early on with their “#beautysquad” launching in 2016. The squad was formed of 5 micro-influencers from a variety of ethnic backgrounds; this allowed L’Oréal to target a specific influencer’s unique audience, whilst also collaborating with the individuals to develop more inclusive product ranges. L’Oréal gave the influencers freedom to share their honest review about the products and to review other brands, which added to the authenticity and originality of the content produced, especially as influencers with smaller followings are often deemed more relatable and genuine. L’Oréal also has an established network of makeup artists and stylists who have, in their own social media circles, taken to social media to promote L’Oréal products. These are referred to as “pro-consumers”, and despite these individuals not being engaged as influencers, their reach and review organically promotes the brand, making them influencers within their own right.
When investing in influencer advertising, it is important that brands select the right influencer for the job. There are financial and reputational risks if the relationship turns sour, or if the influencer acts beyond their instructions, as there is scope for the business to be liable for any misleading content posted. In such cases, financial penalties may be incurred for either party’s failure to comply with the strict advertising rules and regulations that prohibit deceptive marketing practices.
Both the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) have taken a more active enforcement role in recent years, which reinforces the need for brands to ensure that paid partnerships are transparently disclosed to an influencer’s community. This is typically seen through a “#ad” or “#sponsored” marker on the digital content, and it is important that the brand makes the influencer aware of these requirements. If an ASA ruling against the brand hits the media, it is likely that there will also be a loss in consumer trust which could cause irreparable damage to the business. In view of this, it is vital that a contract is entered into between the parties to govern the commercial relationship, prevent the aforementioned risks and ensure value is delivered through the engagement.
Many brands are recognising the influential power of influencer marketing campaigns, and this shift in marketing focus appears to be a trend that will continue to dominate the advertising landscape for the foreseeable future, even in place of traditional advertising methods. To achieve a successful partnership, brands will need to identify the right type of influencer, and ensure there are appropriate contractual obligations and restrictions in place to offer both parties sufficient protection from regulatory sanctions.
It is clear that communication is key when it comes to influencer marketing, and if both parties get it right, it can have a profound impact on brands and influencers alike.
Irwin Mitchell works with influencers, agents, platforms, podcasters and other content creators. For further information about its services in this area click here.
For further information on the power of influencer marketing for brands, please feel free to join our webinar on this topic at 11am on Thursday 26 November. To sign up, see this link.