What Businesses Need to Know when Working with Influencers

What is an Influencer?

With the technological boom and the rise of social media, businesses are partnering with influencers to promote their products and services. An influencer is a person that is influential in the social media realm. Influencers are usually found on Instagram with over thousands of followers. However, not all influencers are the same. Each social media influencer has a different field, meaning that one influencer might be influencing their followers with their healthy recipes and another influencer might be influencing their followers with their style. Not all influencers are the same so it is crucial that you find the right influencer that can reach your target audience.

Why are Businesses Partnering with Influencers?

Businesses are partnering with influencers to promote their services and products because of the influence that they have on their followers. A survey conducted this year has found that about 34% of Instagram users bought something because an influencer recommended it. Businesses are finding that they are spending less on advertising with influencers while still reaching their target audience and keeping their sales. There are also influencers in almost every industry, including health, fashion, sports, food, and travel. Therefore, it is easy for businesses to find an influencer that can recommend their products and services to their ideal audience.

What should I know about partnering with influencers?

Partnering with an influencer to promote your product or service is a form of advertising and thus you must follow the Federal Trade Commission guidelines. The Federal Trade Commission guidelines state that an audience must understand the influencer’s relationship to the company whose products are being recommended if there is a connection between the influencer and endorser that might affect the weight or credibility that consumers give the endorsement.

A connection means business or family relationship, payment, or the gift of a free product. It should be made clear to followers that there is a connection by using clear and unambiguous language in your post concerning the endorsement. This means that if the influencer is getting paid to advertise the product or service, they must disclose that their post contains an ad. The disclosure must be hard to miss by the followers, meaning that you cannot use ambiguous disclosures like #collab or enclose your disclosure after the more button on Instagram. Influencers have the ability to shape a user’s view on a product or service, therefore it is crucial that individuals who decide to purchase the product or service know that the influencer has been paid for her/his opinion.

As a business partnering with influencers you should reduce the risk of attracting the Federal Trade Commission’s attention as much as possible. To minimize your exposure, you should make sure to have a contract with the influencer that is providing the service for your business. The contract should instruct the influencer of her responsibilities pursuant to the Federal Trade Commission. It should include a provision for the event that the influencer does not disclose the connection she/he has with the business. Additionally, the business should monitor the influencer’s page to make sure she is making the disclosures and speak about anything that arises during the relationship that may cause a problem with the Federal Trade Commission.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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