The Honey scandal is a ‘wake-up call’ for the creator industry’s affiliate partnerships

It’s not just Honey. Other companies including Microsoft and Capital One are facing similar claims regarding their browser extensions through Microsoft Shopping and Capital One Shopping. Now creator and legal experts expect to see greater scrutiny to these affiliate partnerships and changes to influencer contracts and agreements to include more protections to mitigate risk — on both the brand and creator sides. While some creator agreements already include morals clauses or similar terms for exit deals if a brand engages in disreputable conduct, there’s more interest from creators today for those terms. PayPal, Microsoft and Capital One did not immediately respond to requests for comment.

“People are still trying to figure [this] out,” said Rebecca Rechtszaid, entertainment lawyer at Global Music Rights. “This is going to change how people enter into partnerships and brand deals from here on out … in the future, just to protect against someone being partnered with a place like Honey.”

The morals clauses that Rechtszaid’s firm uses for influencers, which she noted are standard practice across Hollywood and the music industry as well, are increasingly being applied to influencers and not just talent. The clause is an agreement that specifies what can cause either party to pull out of the contract, whether it’s a reputational risk or other issues arise during their deal.

“Let’s say an influencer has a deal with a company … to make X number of content pieces, and then something like [Honey] happens that kind of puts the company in a bad light,” Rechtszaid explained. “The clause would also allow the influencer to get out of their deal with the company … [if there are] another 10 posts that they have to still do under the agreement. Ordinarily, without that, they would still have to do it.”

Many influencer agencies like Stagwell’s Movers+Shakers already include mutual terminations in the creator agreements — but there has been a “surge in requests” of mutual termination clauses and more creators asking for these terms in the last few months, said Sarah Gerrish, senior director of creator and influencer at Stagwell agency Movers+Shakers. Previously, it was mostly brands that had this termination power.

Although it’s difficult to exactly say if this increase is a direct result of Honey’s lawsuit, Gerrish believes that more creators are demanding the same protection, especially as they grow more aware of how brand partnerships can impact their personal brands. Some agreements may also depend on the brands and the type of creator, but for the most part many will still have to pay a portion of the fees to creators if the relationship is terminated.

“While it’s difficult to pinpoint a single catalyst like the Honey lawsuit, it’s undeniable that both influencers and creators are becoming increasingly savvy about safeguarding their brands as they expand their revenue streams — and that brands and agencies will need to continue to evolve their agreement language to follow suit with this trend,” Gerrish added.

Who influencers choose to work with can hurt them too. The backlash for Bud Light’s work with transgender creator Dylan Mulvaney in 2023 didn’t just hurt the brand but had Mulvaney put in the spotlight and criticized widely by conservatives. More recently, rapper Stormzy is being criticized for allegedly compromising his values after promoting his McDonald’s partnership as the fast food giant faced backlash for a franchise owner’s decision to give away meals to the Israeli military.

As part of the Stagwell network, Movers+Shakers also reviews and updates its contracts on a monthly basis these days, given the frequent changes that can happen in the influencer business. More creators are now also joining unions like the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) now, which comes with its protections similar to other talent — another signal that creators are becoming more “legitimate,” Gerrish explained.

The Honey controversy also highlights a larger measurement and transparency issue in terms of brands relying on last-click attribution to track their affiliate fees. Brands should consider moving beyond tracking promo codes and UTM, or Urchin Tracking Module, parameters that are URL snippets marketers use to track results of their online marketing campaigns, argued Jennifer Quigley-Jones, CEO and founder of influencer agency Digital Voices. Rather, brands should focus on measuring creator results across the entire customer journey and reward based on that, using affiliate link creation and tracking tools through influencer platforms Later or Impact.com that track conversions through creators.

“[Using UTM and codes] oversimplifies the consumer journey and can minimize the impact of influencers at all stages of the funnel,” Quigley-Jones said. “This [Honey lawsuit] is a wake-up call for businesses to view influencers as brand partners, not an afterthought.”

Going forward, influencer agency execs agree there will be greater scrutiny applied to these various commerce and affiliate platforms. Brands need to devise a clear marketing plan of all its affiliate programs and where creators are involved — and this calls for wider education across the ecosystem, said Jenifer Golden, senior director of partnerships and innovation at influencer agency Open Influence.

“On the creator side, it’s ensuring them of the backend to which they will receive their compensation and really diving into the nitty-gritty of how that happens,” Golden said. “As everybody is becoming more savvy in terms of marketing, they also need to be as savvy in terms of the technology they use to serve that. … We need to meet each other in the same place.”

Affiliate marketing platforms are important to creators, but this is going to affect trust around those platforms and apps like LTK, ShopMy or Rakuten, among others, according to Gerrish. Creators will be more “discerning in which ones” to use, Gerrish added. “ShopMy … is really big in the affiliate space and LTK [too], so obviously influencers can’t ignore the power [of] affiliates.”

If anything, the Honey case is a reminder that the creator economy is still murky and difficult to navigate even as it matures. Influencer marketing is “still a bit of a Wild, Wild West to be honest, just across the board,” Gerrish said.

Alexander Lee contributed to reporting.