Understanding UGC Usage Rights: What Marketers Must Know

User-generated content (UGC) has become a cornerstone of modern marketing strategies. By leveraging authentic content, consumers create brands that can enhance their credibility and build stronger connections with their audience. However, with the rise of UGC, it has become crucial for marketers to understand the associated usage rights. While it’s common to ensure proper digital rights management practices when working with celebrities and models, the rise of this type of content opens a further discussion about handling the rights. This article delves into what UGC advertising entails, the importance of UGC usage rights, common legal issues, best practices for obtaining and managing these rights, and practical steps for acquiring UGC usage rights.

User-generated content (UGC) encompasses content—videos, photos, reviews, social media posts—created by consumers rather than brands. UGC advertising involves incorporating this user-created content into marketing campaigns to promote products or services. The primary advantage of UGC advertising is its authenticity. Consumers tend to trust content that showcases real experiences and perspectives from other users, which in turn can significantly boost a brand’s credibility and appeal.

When discussing digital rights management (DRM), the focus often gravitates toward celebrities or models, where content rights are well-established and managed through formal contracts. However, in the context of User-Generated Content (UGC), the landscape shifts. Here, content is predominantly created by influencers or niche content creators, each of whom retains distinct rights over their work. The management of UGC usage rights is crucial, as it governs the permissions required to leverage this content within marketing strategies.

UGC usage rights encompass a variety of considerations that marketers must address. It’s essential to clarify the platforms where the content will be distributed—whether it will be shared on your brand’s channels, the creator’s platforms, or both. Furthermore, the nature of the post needs to be defined: will it be organic, or will it form part of a paid campaign? The financial arrangement behind the content must also be transparent—whether it’s part of a gifted campaign or a paid collaboration. Additionally, the duration of content rights must be specified, including whether the content is licensed for a set period or purchased outright. Finally, the scale of the campaign, including its reach and potential impact, should be outlined to ensure all parties understand the scope of the agreement.

Navigating these factors is vital to maintain legal compliance, foster positive relationships with creators, and maximize the effectiveness of your marketing efforts.

Several legal issues can arise in UGC advertising, including:

Copyright Infringement

Using copyrighted material in UGC without the creator’s permission is a common issue. Brands must ensure they have explicit rights to use the content to avoid infringement claims. Here is a resource that discusses copyright in user-generated content.

Privacy Violations

Using UGC that contains identifiable individuals without obtaining their consent can lead to privacy violations. It’s essential to secure permissions from all individuals featured in the content. These policies can vary by country, but in the US it’s important all content is covered by The Privacy Act of 1974.

Terms of Service Violations

Improperly using content can breach the terms of service of social media platforms or other UGC platforms. Marketers must familiarize themselves with and adhere to these terms to avoid account suspensions or legal repercussions. Some influencers have received backlash for promoting gambling to younger audiences, and now live streaming platform Twitch has added new policies to combat this, even though online casinos were popular sponsors for their content.

False Endorsements

Misleading consumers by attributing UGC to individuals who have not endorsed the brand can result in false endorsement claims. For example, Real Housewives star Bethenny Frankel sued Tiktok for allowing Ads that stole her likeness to promote counterfeit goods. Authenticity is key, and proper attributions must be made to the creators.

Licensing Agreements

Licensing agreements serve as a contractual framework specifying where and how the content can be used and for how long. This ensures clarity and transparency for both parties.

Transfer of Ownership

Brands may seek a complete transfer of ownership for long-term use of UGC across various platforms. This option can be complex and costly, requiring careful negotiation and legal oversight.

Exclusivity Rights

Brands can request exclusivity rights to prevent content creators from promoting competing brands during the contract’s duration. These exclusivity rights restrict the creator’s earning potential, often necessitating a premium fee.

1. Set Clear Terms and Conditions

Within your campaign, define the content’s intended usage and how the UGC content fits within it, including the timeframe, media platforms, and the messaging. To avoid misunderstandings, specify whether the content will be used for organic reach or paid advertising.

2. Draft a List of Content Creators and Approach Them With Context

Whether discovered through hashtags or if you already have a radar on your niche, draft a list of content creators and influencers that have the right audience and look for your campaign. If it’s a fashion campaign for example, find influencers with similar style to the clothing your company is promoting, so it seems genuine and authentic. 

When reaching out to influencers, adopt a friendly and complimentary tone, perhaps pointing out their work that resonated with you or the general reasons why you would like to work with them. Influencer agencies could be another way to find influencers to promote your campaign.

3. Negotiate

Whether this creator has 100 or 1 million followers, it’s important to treat negotiations as a business transaction, maintaining an appreciation for the influencer’s work. During the negotiation period, consider factors like the influencer’s size, content type, length, quality, and the desired duration of usage rights and how they align with the campaign. Some influencers may have flat rates per post, video, or testimonial, or they have a rolling fee for usage over periods of time.

4. Draft Comprehensive Contracts

Incorporate all negotiated terms and conditions into a formal contract. Include details such as the nature and quantity of content, duration of collaboration, media channels, and costs. Agencies will work with you on this if you go that route.

5. Maintain Positive Partnerships

Nurture relationships with content creators even after acquiring usage rights. Regular follow-ups, expressions of gratitude, and open communication can foster continued collaboration. This can include inviting them to brand events or brand trips, and sending them PR boxes or other goods.

How can brands balance the need for authenticity in UGC advertising with the legal requirements of securing proper usage rights? Understanding and managing these  UGC usage rights is essential for leveraging user-generated marketing content’s full potential. By adhering to legal requirements and best practices, brands can harness the authenticity and credibility of UGC while avoiding legal pitfalls. As UGC continues to grow in importance, businesses must stay informed and prepared. 

With Brand Vision, FADEL can assist brands in navigating UGC usage rights, offering solutions to manage and showcase their products in this evolving landscape effectively. Brand Vision empowers marketing teams with a powerful brand compliance solution designed to protect the use of your brand assets, product packaging, marketing content, and advertising, including UGC content. Book a demo with us for an inside look at how we’ve helped our customers reduce violations by 90%. 

By embracing these practices and keeping a keen eye on rights, marketers can ensure that their UGC advertising efforts are both legally sound and highly effective, paving the way for more authentic and engaging marketing campaigns.