The Complete Guide to Influencer Contracts in Japan: Process, Key Success Factors, and Important points.

In recent years, utilizing social media for marketing has become an important strategy for many companies in Japan, with influencer marketing becoming the mainstream approach. An influencer refers to someone with social influence on platforms like Instagram, X (formerly Twitter), and YouTube. Influencers are particularly popular with younger generations, and using them has become essential for businesses to succeed in the competitive marketing landscape.The key to success in influencer marketing lies in establishing a clear contract with the influencer.

 This article will provide a thorough explanation of the necessity and benefits of influencer contracts in Japan, the process of forming them, the key to success, and considerations. It also introduces the contents of the contract.If you want to avoid issues and ensure a successful influencer contract, this guide is a must-read.

Why Are Influencer Contracts Important in Japan?

Influencer contracts are essential for both businesses and influencers to operate under clear rules. In Japan, where legal regulations and consumer protection laws are strict, the importance of a clear contract becomes even greater. Here, we explain the necessity of influencer contracts from both perspectives.

Maximizing Marketing Effectiveness

Signing a contract ensures fair compensation for the influencer’s work, allowing both parties to proceed with peace of mind.

Clear agreements on compensation and post content boost the influencer’s motivation, leading to high-quality content.

Additionally, activities based on mutual agreement help target the audience effectively.

Avoiding Legal Disputes

A contract ensures that the influencer’s content and image are used appropriately, preventing unauthorized usage or changes in terms.

By clarifying content usage, the contract specifies how the influencer’s posts and image will be utilized, thereby preventing misuse or alterations in terms.

Additionally, clearly stating who holds rights to the created content protects intellectual property and helps avoid future legal issues.

Protecting Brand Image

Contracts help set up a system for reviewing posts before they go live, mitigating the risk of inappropriate content or backlash.

By establishing a pre-approval process, brands can review influencer posts prior to publication, ensuring alignment with brand standards and reducing the likelihood of negative reactions.

This process allows for the removal of problematic expressions or misleading content, thereby protecting the brand’s reputation.

The Purpose of an Influencer Contract

The purpose of an influencer contract is twofold: “expanding brand image” and “increasing customer acquisition.”

A key feature of influencer marketing is its ability to reach customer segments that traditional advertising, such as paid ads, might not effectively target. Through word-of-mouth, influencers can promote a brand naturally, which helps convey its message to a broader audience. This approach makes it possible to reach potential customers who may not typically be exposed to conventional advertising, thereby showcasing the appeal of products or services to harder-to-reach target groups.

Benefits for Companies from an Influencer Contract

One of the significant advantages of influencer marketing is that influencers can convey the appeal and usage of a product through personal experiences, which traditional ads may not be able to effectively do.

In recent years, consumers have tended to place a high value on “word-of-mouth recommendations.” Many companies are leveraging influencer PR to boost customer acquisition rates and expand sales. In fact, about 80% of consumers have made a purchase based on an influencer’s recommendation, and 49% of people rely on influencer information.

As a result, influencer contracts are expected to become even more important in marketing strategies moving forward.

We will break down and explain the four key benefits of influencer contracts from the company’s perspective.

source : https://digitalmarketinginstitute.com/blog/20-influencer-marketing-statistics-that-will-surprise-you
source : https://top-marketing.toridori.me/academy/research_01

Reach to Target Audiences

By leveraging influencers with specific follower demographics, businesses can efficiently reach their target audience. Traditional marketing methods, such as newspapers, TV commercials, and magazine advertisements, primarily focused on broadcasting information to a broad, unspecified audience.

As a result, promoting to specific users often required increasing the number of advertisements, which led to higher costs. While listing ads and display ads offer cost-saving advantages, they tend to be one-sided in their communication, making it less likely to lead to actual purchases.

In contrast, influencers typically have a large following of individuals interested in specific niches. Partnering with influencers allows businesses to focus on targeted audiences and promote their products or services naturally.

Building Trust

Products recommended by influencers serve as a relatable and highly trustworthy source of information for their followers. Statements like “If [influencer’s name] says so, I can trust it” or “If [influencer’s name] recommends it, I want to try it too” resonate with followers, making it easier to build trust and drive purchases.

This is especially true for new brands or products, which must first earn consumer trust. Gaining credibility in a short time is challenging when a product or brand lacks broad recognition. 

However, leveraging the influence of well-known personalities allows businesses to effectively promote themselves and gain trust even during the early stages of their brand or product launch.

Improving Cost -benefit performance

Partnering with influencers significantly improves cost-effectiveness compared to traditional advertising. 

The typical cost for hiring an influencer is estimated at 1 to 5 yen per follower or 3 to 20 yen per video view.For influencers with tens of thousands of followers, collaborations can start from just a few tens of thousands of yen.

On the other hand, advertising on portal sites or media platforms often costs hundreds of thousands of yen annually. Utilizing influencers can help reduce these costs. Additionally, influencers have followers within specific target demographics, enabling direct and highly effective promotions.

Furthermore, content created by influencers tends to have a subtle advertising tone, allowing them to naturally convey the appeal of products and services without arousing distrust among followers. This approach easily captures user interest and drives purchases.

As a result, advertising through influencer partnerships delivers significant outcomes at minimal costs.

Enhancing Brand Value

Selecting the right influencer can significantly enhance a brand’s image. Influencers are highly trusted by their followers, and the mere association of a product with a well-regarded influencer can create a sense of exclusivity and trust, increasing attention toward the brand.

Moreover, the content shared by influencers is often perceived as part of their lifestyle rather than traditional advertising. This reduces the sense of overt promotion, making it feel more approachable and relatable.As a result, it contributes to long-term improvements in brand value.

For new brands or products with low recognition, leveraging influencers is a powerful way to gain trust and interest, helping to differentiate from competitors and establish a strong market presence.

Steps for creating a contract

Before understanding the contract process, you need to know the steps for creating a contract.

Scope of Work

Once the influencer and the company have reached an agreement, it’s time to draft and sign the contract. The key point here is to ensure that both parties clearly understand their rights and responsibilities, to avoid potential future disputes. 

The contract should cover the following details:

• Basic information (name, signature, date, etc.)
• Content and platforms for posts
• Goals to be achieved
• Cancellation policy
• Compensation Terms

Compensation Terms

The compensation and expenses to be paid to the influencer should be clearly outlined in the contract.

There are several types of compensation models, including:

• Fixed Compensation: Based on the number of posts or followers.
• Variable Compensation: Based on metrics such as engagement rate or impressions.
• Performance-Based Compensation: A percentage of the sales generated through the influencer’s promotion (affiliate model).

The most common method is fixed compensation, where the payment is calculated based on the number of followers multiplied by a set per-follower rate.It is important to specify both the period and amount in the contract, such as “from [year][month][day] to [year][month][day]”.This ensures clarity, as the influencer’s rate can fluctuate with changes in their follower count.

 If this is not clearly stated in the contract, the compensation rate may change from the time of the agreement to the actual execution, potentially leading to disputes.There have been instances where such discrepancies led to conflicts, so it’s crucial to agree on and specify the compensation details in advance.

Additionally, any expenses related to the PR activity (e.g., travel or accommodation costs for photoshoots) should be clearly stated in terms of who will bear the costs and how they will be paid. In some cases, the influencer may pay the costs upfront and be reimbursed later, so it’s important to agree on payment methods and timing beforehand. 

This helps prevent potential issues down the line.

Contract Duration

Set clear start and end dates for the contract. 

It’s also important to establish a posting schedule and frequency. A vague contract period increases the risk of delays or missed posts. For long-term contracts, specify the renewal timing to avoid ambiguity and ensure smooth progress.

Intellectual Property and Confidentiality

Clarify who owns the intellectual property rights of PR posts, such as content, images, and videos.Specify whether the rights will transfer to the company or remain with the influencer. Additionally, include confidentiality clauses regarding any sensitive company information learned during the collaboration to prevent leaks to third parties.

Compliance

Adherence to laws and regulations is crucial in influencer contracts. In Japan, this includes the Act against Unjustifiable Premiums and Misleading Representations and advertising expression regulations.

It is also recommended to include rules to prevent “stealth marketing,” which requires that posts be clearly labeled as advertisements or PR content.Ensure these aspects are included in the contract and thoroughly check for any omissions during the contract drafting process.

Restrictions

When drafting an influencer contract, it’s essential to include a “non-compete” clause, which prevents the influencer from promoting competing brands during the contract period. This clause helps protect confidential information and avoid conflicts with competitors. 

Since influencer activities with competing companies can lead to significant issues, clearly define the scope and duration of such restrictions in the contract.

Step-by-Step Guide to the Influencer Contract Process in Japan

This section will explain the process of establishing an influencer contract in Japan, from preparation to post-contract actions. We will also introduce the key contents to include the contract,so please use them as a reference.

Selecting the Right Influencer

When starting a contract with an influencer, it’s essential to select the right individual who is best suited to promote your products or services. This involves analyzing factors such as follower demographics and engagement rates.

Here are three methods for selecting influencers:

• Discovering them directly on social media
• Using search tools or platforms
• Having an agency handle the selection

When choosing an influencer, it’s important to consider not only their follower count but also their content quality, influence, past controversies, and any violation related to stealth marketing.

Contacting and Negotiating with the Influencer

Once you’ve identified the influencer you wish to contract with, negotiate the terms, such as compensation and content requirements. You can also proceed with negotiations through an agency if preferred.

This step is critical to the success of your influencer contract. Clearly defining the terms of the agreement can prevent future disputes and ensure more effective PR outcomes. Take care to proceed diligently during this process.

Before starting a contract with an influencer, businesses should choose someone who aligns with their product or service. 

Final Confirmation and Signature

Both parties should review the contents of the contract and, once they agree, proceed with signing and stamping the document. This process is a crucial step in formalizing the contract.

It is important to thoroughly check for any unclear points or omissions, ensuring that all agreed terms are reflected in the contract.

Post-Contract Actions

Once the contract is established, the company should review and provide feedback on the influencer’s post content.Check if the PR post aligns with the contract terms and brand image, and request revisions if necessary.

 This ensures that the final post satisfies both the company and influencer, leading to effective PR activities.

Maintaining smooth communication with the influencer is also essential. Building a good relationship based on trust can positively impact future long-term collaborations.

Three Key Points for Success in Influencer Contracts in Japan

Here are three key points to consider for successfully executing an influencer contract in Japan. While influencer contracts may seem like a simple marketing method, achieving actual results requires attention to several important factors. Specifically, focus on the following three points when advancing the influencer contract.

Choosing the Right Influencer

The most important factor for success in influencer contracts is choosing an influencer that matches your brand image. Don’t focus solely on follower count—pay attention to post content, quality, statements, engagement rate, etc.

For instance, one key consideration is whether the influencer’s followers align with the target audience of the product being promoted.

Thorough Communication

Clear communication before and after the contract is essential for ensuring mutual understanding.Align the PR goals, objectives, and post content direction carefully, and make prior agreements to enhance the quality of the final post.Also, discuss the posting schedule and follow-up procedures.

Assessing the Quality of the Influencer’s Followers

Simply hiring an influencer with a large follower count won’t guarantee effective promotion of your product or service. To assess the quality of their followers, check metrics such as comment and like counts, active followers, and the presence of fake accounts.By selecting influencers with high-quality followers, you can expect better PR outcomes.

Precautions to Avoid Failures in Influencer Contracts in Japan

To avoid failure in influencer contracts in Japan, there are several important points to keep in mind. 

Below are three key points to consider.

Compliance with Legal Regulations

It is essential to reflect in the contract the consideration of laws such as the Premiums and Representations Act and the Anti-Stealth Marketing Law. Influencer marketing requires strict adherence to legal regulations. Specifically, the contract should incorporate provisions related to the following laws and guidelines:

• Premiums and Representations Act: Avoid exaggerated claims and misleading representations.
• Anti-Stealth Marketing Law: Clearly indicate “advertisement,” “PR,” or similar labels in the post content.

Failure to comply with these regulations increases the risk of legal liability for the company. Therefore, it is advisable to seek advice from the legal department or specialists when drafting the contract.

Clarification of Goal Setting

It is crucial to set clear performance goals and KPIs (Key Performance Indicators) during the contract stage. Vague objectives may lead to discrepancies in expectations and prevent desired outcomes.

For example, setting specific KPIs such as the following can help measure results:

• Engagement rate per post
• Website traffic
• Actual sales or revenue figures

By sharing goals in advance and obtaining mutual agreement, the contract process can proceed smoothly.

Establishing Preventive Measures for Troubles

To prepare for any potential issues, the contract should include clear preventive measures. By specifying the following points, problems can be addressed quickly when they arise:

• Payment Terms: Define the timing and conditions of payments.
• Cancellation Policy: Specify the procedure for contract termination or cancellations.
• Post Modification: Establish a process for revising post content if there are issues.

Common Troubles in Influencer Contracts in Japan and How to Avoid Them

Influencer contracts can be an effective marketing tool, but without proper precautions, there is a risk of issues arising. Here are some common problems and ways to avoid them:

1. Unpaid Fees

Delayed or unpaid compensation by the company can create distrust and damage the relationship with the influencer.

2. Ambiguity in Contract Terms

Unclear terms about post frequency, schedule, and PR direction can lead to unsatisfactory results and misalignment in expectations.

3. Post Mistakes

Errors such as misspelling the brand name or promoting the wrong product can occur, usually due to insufficient prior checks.

4. Influencer Scandals or Inappropriate Statements/Actions

If an influencer gets involved in a scandal or makes inappropriate statements or actions, it can negatively affect the company. 

Checking their past behavior and understanding their personal appearance is crucial.

How to Avoid Troubles

1. .Set Clear Terms in the Contract
   • Clearly define payment terms, schedule, and post content details.
   • Agree on post modification procedures and contract cancellation terms in advance.
2. Establish Regular Reporting Systems
   • Maintain regular communication with the influencer after the contract is signed and share scheduled posts.
   • Ensure that the company reviews the content before posting and has a process to check for any issues.
3. Provide Clear Instructions
   • Provide the influencer with clear guidelines on the brand and PR goals.
   • Clearly communicate prohibited actions (e.g., comparing with competitor products or exaggerating claims) to prevent mistakes.
4. Include Liability for Damages in the Contract
   • Specify the influencer’s responsibility for damages in the event of copyright, trademark infringements, or false representations.

Clearly outline the maximum amount of damages or penalties for breach of contract to clarify both parties’ risks.