Influencers: Navigating IP Ownership, Reputational Harm and the Rise of AI-Driven Avatars

Written By Benjamin Reingold and Stephen Burns

Influencers have become a cornerstone of modern marketing strategies. A social media influencer is an individual who has established credibility, expertise or a strong personal brand in a specific niche or industry and uses social media platforms to engage with a dedicated audience. Influencers typically have the ability to affect the opinions, behaviours and purchasing decisions of their followers due to their perceived authenticity, relatability or authority.

Influencers' ability to connect with audiences on a personal level has made them invaluable for brands seeking to build trust and authenticity. However, working with influencers is not without its challenges. From disputes over intellectual property (IP) ownership to the risk of reputational harm, brands must carefully vet influencers. Adding a new layer of complexity is the rise of AI-driven influencers (i.e., an avatar, not an individual) which introduces unique opportunities and challenges to the influencer marketing landscape.

Intellectual Property Ownership: A Legal Minefield

A common pitfall in influencer collaborations is the question of who owns the content created during the relationship. Influencers often produce creative assets that may attract copyright protection—photos, videos and text—that brands may want to repurpose. However, without clear contracts, disputes can arise over who owns the rights to the content and how it can be used. Depending on an influencer's following, the influencer may have considerable leverage in negotiating content ownership.

Best practices include:

• Draft comprehensive contracts: Clearly outline ownership rights, licensing terms and usage limitations in all agreements with influencers. Consider obtaining a waiver of moral rights in jurisdictions such as Canada.
• Negotiate licensing: If full ownership isn't possible, secure a broad license to use the content across various platforms and campaigns.
• Consult legal experts: Work with legal professionals to ensure compliance with copyright laws and avoid potential disputes.

Reputational Harm: The Double-Edged Sword of Influencer Partnerships

While influencers can amplify a brand's message to a new audience in authentic ways, they can also expose it to reputational risks. An influencer's personal behaviour, controversial opinions or past actions can become a liability for the brands they represent. For example, an influencer embroiled in a public scandal can tarnish a brand's image by association, as can collaborating with influences whose values don't align with the brand. Moreover, some influencers inflate their follower counts or engagement rates, leading to wasted marketing budgets and diminished credibility.

Mitigation strategies include:

• Thorough vetting: Research an influencer's history, audience demographics and engagement metrics before entering into a relationship.
• Careful contracting–such as by inclusions of morality clauses: Add clauses in contracts that allow the brand to terminate the relationship if the influencer engages in behaviour that could harm the brand's reputation.
• Monitor campaigns: Keep a close eye on how the influencer represents the brand and address any issues promptly.

The Rise of AI-Driven Influencers: A New Frontier

The emergence of AI-driven influencers, often with millions of followers on Instagram and collaborations with major brands, has added a fascinating twist to the influencer marketing landscape. These virtual personalities are entirely created and managed by AI, offering brands a level of control and predictability that human influencers cannot match. However, they also raise unique ethical, legal, and reputational questions.

Opportunities with AI-driven influencers include:

• Control: Brands can script every aspect of an AI influencer's persona, ensuring alignment with their values and messaging.
• No personal scandals: Unlike human influencers, AI-driven influencers are immune to personal scandals or unpredictable behavior.
• Global reach: AI influencers can be tailored to appeal to diverse audiences across different cultures and languages.

Despite the beneficial opportunities working with AI-driven influencers, this also presents risk.

• Authenticity concerns: Consumers value authenticity, and the knowledge that an influencer is AI-generated may undermine trust. Brands should monitor public sentiment regarding how audiences react to AI-driven campaigns and adjust strategies accordingly.
• Ethical implications: Some critics argue that virtual influencers take opportunities away from real people, while others question the transparency of such campaigns. Consider using AI influencers to complement, not replace, human influences to preserve authenticity that consumers value.
• Reputational risks: If the company behind an AI influencer faces controversy, it could impact the brands associated with them.

Takeaways

The influencer marketing landscape is evolving rapidly, with new opportunities and challenges emerging. From navigating the complexities of IP ownership to mitigating reputational risks, brands must approach influencer collaborations with care and diligence. The rise of AI-driven influencers add another layer of complexity, offering both exciting possibilities and unique challenges.

As the industry continues to evolve, the key to success lies in balancing innovation with responsibility. By adopting best practices, staying informed about emerging trends and prioritizing transparency, brands can harness the power of influencers—both human and AI—while minimizing potential pitfalls. In this ever-changing landscape, adaptability and ethical decision-making will be the cornerstones of effective influencer marketing.

If you have any questions about how your organization may use and implement AI, we invite you to contact one of the authors of this article.

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