Influencer marketing is a great way for businesses to add visibility and build recognition for innovative products and services. NFT influencer contracts are crucial for those who are looking to build engagement with their NFT assets.
Regulatory problems can hit businesses hard – and punishments can hit businesses but miss advertising partners like influencers. Having a solid contract in place will help you rest assured that your influencers are doing things right and hold them accountable should there be an error.
For more information on business and marketing topics, including influencer contracts, get in touch with us—we love helping SMEs succeed!
What are NFTs?
Non-fungible tokens (NFTs) are representative of digital collector’s items. This might be any type of digital asset that can be purchased with cryptocurrency. NFTs have a unique barcode that can not be replaced or traded. They are used to demarcate the original ownership and authenticity of digital assets that can be auctioned or traded online, e.g., recordings and artwork.
So what’s the point of having influencers doing the marketing in this space? Influencers work well in this space because many are well-versed in digital assets and cryptocurrency. They’re great at getting organic reach and engagement and have the skills to educate audiences on how and why they want these digital assets in the first place.
Marketing NFTs: Best Practices
Your NFT influencer contract should be developed based on sound marketing practices and existing FCT regulations.
Here are some tips:
- Use YouTube and TikTok: Video ads are much more likely to attract followers
- Develop marketing materials that are both entertaining and educational
- Have influencers answer simple Q&As (one per video) as they raise awareness about the nature of NFTs
- Focus on fostering an interactive community with your influencer
- Have your social managers and influencers constantly at the ready to engage with audiences
Trust and education are key for building your brand around an NFT. The right influencer can help you do this. Make sure you have a solid contract in place before moving forward with a social marketing campaign, or you could risk getting yourself in hot water. A business attorney can help to ensure that you are following rules and regulations correctly.
Why an NFT Influencer Contract is Important
The character limitations for social media influencers on a platform like Twitter (for instance) and the informal language often used on such platforms can lead to a literal “hotbed” of miscommunication and erroneous advertising or messages being communicated.
Other unintended material misstatements or omissions might occur simply due to other aspects of social media that inhibit communication, and the types of material influencers on social media can present to viewers. This opens the social media influencer up to liability.
The Federal Trade Commission (FTC) always engages and monitors marketing practices by influencers, especially in newer niches like NFTs. Fines are issued regularly, and punishments can go to businesses, advertisers, social platforms, and influencers. NFT brands need to have all their ducks in a row to avoid marketing violations.
Based on the FTC’s recent guidance for social media influencers, we’ve put together our own Social Media Influencer guide just for you! DOWNLOAD IT HERE for FREE.
Find the Right People to Advertise Your NFT Product(s)
Influencers are great for getting the word out, but not all are created equal. For better or worse, these days, anyone can market themselves as an influencer without being well-versed in important laws and regulations. Regulations are also constantly evolving to address various issues, and NFTs, in particular, are very new.
Therefore you want to take the time to partner with the right influencer. Find people who are already influencers in this niche and have a good following or fan base. Find well-versed people in your chosen platform(s) as well, as they will be more likely to have the skill, knowledge, and following than other influencers.
(Read more: 9 Legal Mistakes Made By Online Influencers)
Understand How Product Endorsements Work and Include them in Contracts
In your contract, include a right to review endorsements and reviews. Influencers must disclose all relationships and are required to be honest. Per the FTC, social media endorsement disclosures must use clear language and be completely transparent—for instance, through the use of hashtags. Each endorsement should be tailored to a specific product and platform
To protect against problems to do with marketing law, NFT influencer contracts should include an in-depth discussion on everything to do with endorsements.
Stay Up-to-Date on Privacy and Disclosure Best Practices
Though NFT is still a relatively new area, influencers would still be smart to follow rules that all other influencers need to align to and build contracts based on current rules.
For instance, Trademark or copyright infringement is just one issue that can come up if you are accused of stealing another person, brand, or business’ intellectual property. Influencers must practice disclosure at every turn and protect their (and their clients’) intellectual property, including text, images, music, and anything to do with branding.
Privacy concerns must also be handled with care. Anyone who has monetized a social channel needs to stay updated on privacy laws about intellectual property. This all comes back to the “truth in advertising” premise: anything you share that may be deemed deceptive advertising could get you sued.
Get help from a business law professional
If you have questions about laws that apply to influencers and want help developing a legally binding contract, we can help. Don’t hesitate to call 303-780-7333 or schedule an appointment online.
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