Want a Celebrity Endorsement on Twitter? 3 Legal Precautions to Know.
Before you shell out cash for a new e-spokesperson, make sure you're in the clear so no issues pop up later.
By Jaia Thomas •
Opinions expressed by Entrepreneur contributors are their own.
Using celebrities to endorse and advertise brands is commonplace in today's marketplace. A celebrity endorsement can double the sales of a fledgling company and triple its notoriety. But, what happens when these endorsements are minimized to 140 characters and conveyed over Twitter?
Thankful for the first day of spring, but better believe this allergy sufferer has #ZYRTEC ready! #ad
— Debra Messing (@DebraMessing) March 20, 2014With an average of 5,700 tweets per second, many tweets now contain celebrity endorsements similar to Messing's. Celebrity endorsement tweets are an extremely cost-effective advertising mechanism for many entrepreneurs. However, before hiring a celebrity to endorse your product or company, there are several legal precautions to follow (both on and offline). It should go without saying that any arrangement entered into between you and a celebrity endorser should be in writing. Here are a few of the key legal clauses these written agreements should contain as well as other legal safeguards.
Related: 3 Ways to Spark Celebrity Buzz Around Your Product
Prior and future agreements. There are several warranties and assurances you will want your celebrity endorser to make in an endorsement agreement. Firstly, you will want your celebrity endorser to warrant that his or her arrangements with you do not legally violate any previous agreements with other third parties or companies. Secondly, you will want your celebrity endorser to warrant that he or she will not enter into any subsequent agreements with other companies that are in direct competition with yours, at least for a certain period.
Lastly, you may want your celebrity endorser to warrant that he or she will keep their social media platform active for a set amount of time. Celebrities can be fickle when it comes to social media -- profile up today and gone tomorrow. You want to be sure that the impact of their endorsement tweet resonates with followers longer than a few seconds.
An exit clause. Another key clause to include in any endorsement agreement pertains to termination and suspension. Under what circumstances can you terminate or suspend your endorsement agreement with a particular celebrity? Most endorsement agreements include a "morals clause,' which will allow you to terminate or suspend the agreement if the celebrity engages in conduct that is "criminal" or "morally reprehensible." However, be sure to define criminal and morally reprehensible behavior. What you find morally reprehensible Lindsay Lohan may not.
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Avoid vague terminology and aim to be as specific as possible. Clauses that contain amorphous wording are oftentimes unenforceable in a court of law. So when crafting your "morals clause,' think about what values your company represents and what behaviors and actions are in direct opposition to those values. The last thing you want is for your bourgeoning company to be associated with a salacious scandal.
Federal regulations. Finally, always make sure your endorsement tweets are in compliance with federal rules and regulations. The Federal Trade Commission (FTC), whose mission is to prevent business practices that are anticompetitive, deceptive or unfair to consumers, regulates the phrasing of endorsements on social media platforms. If a celebrity is compensated to advertise or promote a product or service, the FTC requires that the endorser disclose the nature of the endorsement.
Disclosure must be clear and conspicuous and should be placed as close as possible to the claim they qualify. To ensure compliance, the FTC recommends endorsers use such hashtags as #ad or #sponsored in conjunction with endorsed tweets. Stress the importance of these rules to your celebrity endorser.
