We are all accustomed to seeing Gary Lineker’s smiling face with a packet of Walkers crisps in his hand and Peter Kay enjoying a pint of John Smiths as the use of celebrities to promote brands and products is well established.
Whilst finding the right celebrity to endorse a product and managing the on-going relationship are obvious issues to consider, having an appropriate contract in place can be overlooked.
This article highlights some of the key contractual issues to consider from a brand owner’s perspective when engaging a celebrity to endorse its products.
Endorsement activities and social media
The contract should set out the scope of activities to be performed by the celebrity so that both parties are clear about how the celebrity will promote the product.
A further consideration, which is particularly relevant to the use of social media for advertising, is which party will be responsible for the wording of endorsements. In some circumstances the brand owner may wish to make the endorsement appear personal and in the celebrity’s “own words”. In this case the brand owner should include an obligation on the celebrity to seek the owner’s prior approval before posting comments.
If tweets are to be used as part of the endorsement activities, the owner must advise the celebrity that the tweets should be clearly identifiable as marketing communications. The Advertising Standards Authority has recently upheld complaints against Nike and Toni & Guy, for using celebrity tweets which were not obviously identifiable as marketing communications.
What assurances and protections are required?
The celebrity will need to give certain warranties to protect the brand, for example that he or she will perform to the best of his or her ability and co-operate with the brand owner.
The celebrity should also commit to not endorsing any competing products. The issue of competing products can be a difficult one as celebrities, or people closely associated with them, are sometimes inadvertently photographed using competing brands, although this will not usually amount to “endorsing” those competing products. Jamie Oliver’s wife was photographed carrying Waitrose shopping bags, which may have been something of an embarrassment for Sainsbury’s.
The brand owner should consider whether any specific warranties are required with regards to the type of product and promotions envisaged.
Most contracts include a “morality clause”, by virtue of which the celebrity provides assurance that he or she will not engage in certain activities, such as committing criminal offences, taking illegal drugs or any other activities which could have a negative impact on the brand. The brand owner will want the right to terminate if such commitments are breached. This can be helpful if the celebrity is subsequently embroiled in a scandal such as, for example, the Lance Armstrong doping controversy.
Having the appropriate assurances in place, linked to termination rights, is vital to the brand owner if the worst happens. These measures can also help avoid criticism of the brand in circumstances where prompt action is required to mitigate adverse publicity.
Whilst celebrity endorsements can be valuable for brands, it is important to ensure that the risks are managed and that a contract is in place to protect the brand owner should things go wrong.
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