Attracting stars, bloggers and other famous people for advertising in Ukraine

Famous brands often involve celebrities, bloggers and other famous people to promote products and services. You can see them in promotional videos on television, recordings on the radio, or even when they “unpack” the product in Instagram stories with positive reviews about the store or the store's product.

It’s all advertising, which means companies and celebrities need to pay attention to the videos/promos or other information they publish on their social media pages or video blogs. It is important, firstly, not to violate the legal rules and regulations related to advertising, and secondly, to properly formalize the process of attracting celebrities to advertising – to protect the interests of both parties.

In most cases, the legal issues of framing the relationship relate to advertising in social networks or integration – short videos integrated (included) in the author’s shows of celebrities, bloggers, etc. However, there are times when a celebrity is attracted to a long term relationship. Think, for example, which products or services are constantly advertised by your favorite travel blogger or fitness model, which you follow in social networks.

Considering our practice, we have prepared you some tips on how to maximize your advertising campaign and get your celebrities to work closely with you.

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Contract for the participation of a star or blogger in an advertisement

Verbal agreements and settlement in “cash” increase the risks of disputable situations. That is why we recommend to all our Clients to conclude contracts with celebrities in order to properly formalize your legal relations.

In a contract with a celebrity (in the vast majority it is a service contract or a mixed contract with elements of a service contract and other contracts) we recommend to provide the following main provisions (essential conditions):

• Clearly stipulate the subject matter, rights and responsibilities in the contract, taking into account the agreements and the desired result;
• Define the terms and mechanisms for creating, integrating and distributing the advertisement;
• Define the celebrity’s liability in the event of a contract breach, as well as a simple and straightforward pre-trial settlement procedure;
• Determine the amount and terms of payment, taking into account costs and taxes;
• Define a clear and understandable procedure for cooperation. That is, the amount of stories or social media posts to be published, the frequency and timing of posting. Otherwise, you will find out why the post is made on Wednesday and not Friday;
• Other conditions deemed essential by the parties.

If you cooperate with companies in Europe and the U.S., the contract may often contain additional and not quite familiar to us requirements:

• Information and personal data security (GDPR and other standards may apply);
• Exclusivity, which consists of refraining from cooperating with other competitors;
• Ability to terminate the contract if the celebrity’s actions, behavior or statements do not comply with the company’s “moral principles” or if the celebrity is caught up in a high-profile scandal. In this case, the company is analyzing possible damages if consumers associate products with a particular celebrity;
• Claims of incompatibility with corruption, discrimination on certain grounds, etc. (there can be many variations). These points are nothing to be afraid of, if you really have zero tolerance for the factors listed.

The contract may be concluded with:

• Celebrity’s sole proprietorship, if any. This is the best option, saving everyone taxes;
• If the contract is signed with an individual (from time to time such cases occur), then remember that the company as a tax agent is obliged to pay 18% personal income tax + 1.5% military tax. Therefore, it is better to discuss and calculate this issue in advance;
• A sole proprietorship or a legal entity that is a celebrity agent (some celebrities are often on concert tours, trips or vacations and have an appropriate agent, assistant, director, manager), with event agencies, advertising agencies or other business entities. In order to enter into a contract with such individuals, it is necessary to check the scope of their legal capacity, to conclude a contract, for example, a power of attorney or a contract with a celebrity. It is better to request and analyze copies of these documents before entering into a contract.

In addition, a separate and quite widespread phenomenon is the “brand-ambassador”, which we will talk about in our next publications.

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Other legal aspects of advertising of goods or services involving celebrities

It is important to determine the creation and use of intellectual property in advertising. For example, a contract with a celebrity must specify the following:

• Who owns the property rights to the created intellectual property object (e.g., integration), and who and how has the right to use them.
• The use of trademarks of other intellectual property must also be legal. Use of music, images, or other copyrighted items also requires permission.

You can see more detailed information about intellectual property in advertising here.

Information about your company’s product or service must be clearly defined, understandable and accessible. Please read in detail about the information prohibited in advertising in our article.

Proper content of advertising materials, celebrity statements, texts, photos and other elements will allow you to avoid:

• unwanted claims or disputes with others who believe their right has been violated;
• disputes with the celebrity or its agents involved;
• reputational damage to your brand.

If another individual or children are involved in the advertisement, we recommend that you also pay special attention to this issue and get the necessary permits.

However, each collaboration with a celebrity is individual and has certain peculiarities.

If you engage a celebrity to conduct raffles, contests or other activities, it is important to determine the rules of these activities in advance and make sure that these rules are available for review.

We constantly help our Clients with advertising campaigns, raffles or contests of various scales. Our lawyers have the right competence and will help you with the legal support of the involvement of celebrities in the advertising of your goods and services.

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