OVERVIEW OF SOCIAL MEDIA INFLUENCERS
AND CONTESTS/PROMOTIONS
Over the past few years, one of the trends that we have been seeing with our advertising and marketing clients (both brands and agencies) is an increased move in some cases to participate in a contest or other type of promotion, with a third party being responsible for the majority of the marketing and administration of the promotion.
Some examples include franchisors acting as brand sponsor contributing prizes with franchisees conducting most of the mechanics of a promotion, brands that partner with influencers and partnering with other co-sponsors or prize sponsors.
In many cases, one party, whether it is a franchisor, brand or co-sponsor, is interested in being involved with a contest or promotion (e.g., contributing some prizing or intellectual property assets, such as their name or marks), but wants another party to conduct the bulk of the marketing and administration for the contest/promotion.
Given, however, the potential risk of partnering in contests/promotions with third parties (particularly, small companies, individuals or other less sophisticated partners), we have been increasingly asked to help our clients with agreements to mitigate risk in the event legal issues arise.
Some of the potential legal issues that can arise partnering with influencers or less sophisticated contest/promotion partners include if they violate Canadian federal advertising law, CASL (Canadian anti-spam legislation) or engage in false or misleading endorsements.
CO-SPONSOR AND INFLUENCER AGREEMENTS
(CONTESTS AND OTHER PROMOTIONS)
Some of the types of agreements that we have helped our clients with relating to contests and promotions include co-sponsor agreements, contest indemnity agreements and influencer agreements.
While the substance of a particular agreement will differ according to the parties and the type of promotion, many of the agreements we have developed have common provisions.
These include covenants setting out the obligations of the parties (i.e., responsibilities in the contest/promotion, including marketing, administration of the promotion (including how it will be marketed, marketing channels and timetable), use of names, marks and other intellectual property, covenants to comply with laws relevant to the contest/promotion (e.g, Canadian federal anti-spam law (CASL), misleading advertising and rules relating to influencer marketing, particularly disclosure of material connections between the influencer and the brand), indemnification provisions to shift risk in the event issues arise and often rights for the brand to review advertising and draft creative before the contest/promotion is launched.
Aside from the fact that influencer agreements can help a brand shift risk where they are a co-sponsor or partners in a contest/promotion, this kind of structure is also a practical way for a brand to engage in a contest or other type of promotion with relatively limited involvement (e.g., only contributing some prizing or use of their name, marks or other IP), while still realizing marketing value.
LIST AGREEMENTS
(SHARING E-MAIL LISTS AND CASL (CANADIAN ANTI-SPAM LAW))
A related topic to influencer marketing for contests and other promotions are list agreements.
While it is much less common now for brands to purchase third party e-mail lists since Canadian anti-spam law (CASL) came into force in 2014, many of our clients still legitimately collect consent on behalf of third parties (e.g., marketing partners, contest/sponsor sponsors, etc.) to engage in electronic marketing.
In many cases, this is relatively straightforward under CASL if the identities of the third parties are known. In this regard, CASL includes rules for collecting consent on behalf of identified third parties, which require, among other things, identifying who is requesting consent on behalf of whom and prescribed identification information for the third parties.
Under CASL, however, consent to send commercial electronic messages (CEMs) can also be collected on behalf of unidentified third parties (e.g., for new marketing partnerships after consent was obtained).
Given, however, that there are a number of obligations imposed on the collecting party under section 10(2) of CASL and related regulations to do so, including that the collecting person “ensure” that any authorized third parties include CASL-compliant unsubscribes and reciprocal notification obligations if a recipient unsubscribes, it is typically advisable for the collecting party to enter into list agreements with third parties on whose behalf they collect consents.
Such list sharing agreements both help collecting parties comply with the specific obligations under CASL for collecting consents on behalf of as of yet unidentified third parties and can provide evidence of due diligence in the event of an investigation.
Companies and others sharing e-mail lists with third parties should also be aware that diligence when sharing lists is also important given that potential liability under CASL is not limited to only the senders of unsolicited e-mails or other electronic communications themselves, but also under section 9 of CASL to those who “aid, induce, procure or cause to be procured the doing of any act” that violates section 6 (the unsolicited CEMs section of CASL).
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Co-Sponsor, Influencer and List Sharing
Agreement Services
If your company or brand is planning to run a contest or other promotion involving co-sponsors, prize sponsors, influencers or other marketing partners and wants to mitigate potential risk through a co-sponsor, influencer or list-sharing agreement, contact us: Contact.
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SERVICES AND CONTACT
We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about our services, see: services
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
