Influencer Management Contract Terms | Influencer Contract Agreement
The market for social media influencer content is on the rise. IZEA, a social media marketing agency, publishes a report each year in which they detail some figures about how much influencers are being paid. For 2021, IZEA reviewed a total of $60 million in payments to social media influencers to see how that money was distributed. Here are some of their findings:
- Nano-influencers (1,000-10,000 followers) were paid an average of $901 per post. This is a 36x increase from what they were paid in 2015!
- Mid-tier influencers (50,000-200,000 followers) were paid an average of $3,087 per post. This is up 6.4x what they were paid in 2015.
- Mega influencers (500,000-1,000,000 followers) were paid an average of $6,786 per post. That is also up 4x compared to 2015.
The overwhelming trend in these numbers are that brands are willing to pay influencers much more than they were just years ago. It is also true that they are willing to pay for larger audiences. Both things are valid simultaneously, meaning much more attention is being paid to influencer marketing.
Social media influencers often appear to do all of their promotions and endorsements spur of the moment without a care in the world. Of course, this is staged just right to make it appear that way, even though much thought goes into what they do. Almost every aspect of an influencer’s endorsement is part of a contract they make with the brand or company they are working with. As such, we wanted to look at some of the terms contracts often contain to understand better the work-life an influencer has.
Influencer Contract Terms
Parties will clearly discuss the kind of content the influencer will produce for the brand ahead of time. Both sides of this transaction need to get together to determine what type of content they will put out and how that content will correspond with the brand’s overall strategy. The influencer management contract will contain a few terms within this aspect of the contract that includes:
- Exclusive Management Clause – A social media influencer manager will likely want to have a clause written into the contract that they offer their talent that dictates that they are to be the sole manager of that talent. This is done to ensure the content put out by the talent follows what both parties have previously agreed to.
- Length of Access to Data – Managers need access to influencer data to decide who to hire and how long. However, that data connection needs to be revoked after a while when the performer no longer works directly with the manager they originally signed up with.
- Non-Compete Clause – There is likely to be a clause within the contract that requires the influencer not to produce endorsed content for any other brand that directly competes with the brand currently signing them up.
- Commission – The manager will likely put in information about how much commission they expect to get for helping the talent find endorsement deals in the first place.
- Termination – There should be specific information about how an influencer can terminate the contract they have set up. This will make it easier for them to end an agreement not actively serving their purposes.
These are just a few aspects of influencer management contract terms. There are many more aspects of these contracts to consider as well.
Essential Requirements for Social Media Influencers
It is ideal to have all of the essential elements of an influencer management contract hammered out in specific detail within that contract. Failure to do so can mean that important aspects of the relationship get left out. Companies will want to make sure it is clear what their goals are for the relationship that they develop with an influencer that they pay to market their posts. Here are some examples of things that most companies want to ensure are a part of their overarching goals for the campaign:
- Increase Brand Awareness – Virtually every marketing campaign has been used in part to increase brand awareness, which is no different for social media influencer marketing. Brands want to ensure that they get their messages out to the broader public in a way that promotes who they are and what they offer in a way that is appealing to their target demographics via an influencer.
- Gain Traffic – Getting more traffic to a company website or driving sales in some way is a clear objective that the contract should spell out in the contract. Failure to improve the amount of traffic one receives to their website can certainly be a good enough reason to eliminate the contract deal you have set up with a social media influencer. You don’t want to continue offering a deal to such an individual if they are not providing your company with the type of returns you expect.
- Connect with a New Audience – Another explicit goal of the campaign can be to connect with a new audience you haven’t reached before. The value in doing this is that you can reach out to a group of people who might otherwise have never heard about your products or service. They may be interested in what you have to offer, but until you take the time to reach out to them, you will simply never know if this is the case. The influencer management contract terms can and should spell out this desire.
Have a Lawyer Look Over the Contract
It is highly recommended that you have an influencer management contract attorney review the contract you produce for your talented influencers.
The best-written contracts ensure everyone is on the same page as far as expectations are concerned, and the only way to reach that point is to use an attorney who knows how to create such a contract.
Please contact us today to set up a free consultation and get started with an experienced lawyer from our team.
Other Blogs of Interest
- How Long are Most Influencer Management Contracts?
- Do Influencer Managers Have Contracts?
- Do Influencers Pay Their Managers?
What is an Influencer Management Contract? | Influencer Management Agreements Explained
What is a social media influencer management contract? As an influencer begins to grow, at some point, they will likely want to bring in a manager, agent, or marketing agency, all kinds of the same thing. Essentially, somebody will go out and try to find your sponsorships so that you can get paid for your cloud. You will absolutely want/need to sign a social media influencer management contract outlining the responsibilities between the parties. For example, you want to know how long the contract lasts, the terms of the agreement, and how parties can terminate the agreement. So, do you have to give notice? Is it a fixed term?
Social Media Influencer Agreement Terms
Does it renew automatically at the end of the initial term? How to terminate the influencer contract is certainly important. Obviously, what the manager/agent is going to do for you? Are they going to go out and reach for every type of marketing opportunity for you? Is it an exclusive management contract, meaning you must use them and can’t use anyone else? Who are you going to communicate with? How much are you going to pay them?
For the most part, influencer management contracts will have a commission percentage, meaning your manager will bring deals back to you, and then you’ll determine if you want to move forward or not. And then you’ll pay a percentage of that whole deal back to the manager. 20% is an industry standard. It can be more or less, but 20% is an industry norm as far as how much percentage of commission is paid back to your manager.
Influencer Expectations When Working With a Manager
What the expectations are of the influencer as well. Things such as, how often do you have to check in with your manager? Is there a software program that needs to be used to track the contacts with anyone else? If you go out and find a deal outside your manager, do you still have to bring it back to that manager so they can negotiate the deal? Do they get a percentage of deals you consummate that have nothing to do with the manager? For the most part, if you have an exclusive management contract, even if a deal falls out of the air, into your lap, and the manager has nothing to do with it, they’re going to require a percentage of that deal if they’re managing you. It may not feel great, but that’s just part of having an agent or a manager.
It Doesn’t End Once the Agreement Ends
Also, what are the obligations once contracts end? As I stated before, you’ll pay the agent/manager a percentage of whatever the commission is for the deals they bring you. Almost every agreement will have language stating, after the influencer contract ends for a period, any deal that they’ve got you that continues after the agreement ends, a percentage will still go back to them.
Let’s say you’re in fitness, and you’ve had a deal with a protein shake maker. If the manager brought you that deal, and you terminate the agreement, you’ll still have to pay them, let’s say, 20% for a year after the contract ends. Managers do that because they don’t want to bring an influencer deal. Then, the influencer immediately terminates the relationship, takes the deal, and gets out of having to pay the commission percentage back to the manager.
Influencers Can Shorten the Look-Back Period
A couple of ways of handling that: you can try to attempt to shorten the look-back period, meaning, if it’s a year, maybe get it down to nine months, six months, or you can also decrease the percentage of commission over time, so maybe in the first quarter, 20%, second quarter, 15, 10, 5, and that way, you’re not having to pay the full amount to your old manager, because that does not feel great, because you’re going to have new management and they’re not going to see a dime of any of the money from any of the old deals that continue for whatever that kind of restricted period is.
There’ll also be language in contracts stating what happens if there are disputes. You have arbitration clauses. Where is the venue if you have to litigate? Meaning you have to sue your old manager. Where does it happen? Is it where you live? Is it where they live? Is it in a different state where you provide notice?
Whenever you decide to terminate the agreement, you must give your manager proper notice. Does it have to be in writing? Yes, it will. What does it need to say? Where does it need to be sent? There are just a ton of things you need to think about that must be in the agreement before executing any management relationship with a manager or agent.
What Should an Influencer Agency Contract Include? | Agency Influencer Agreement
What should a contract between agents and influencers include? What needs to be in that influencer agency management contract? Before establishing any working relationship with an agent, a manager, an agency, whoever it is. An influencer contract that dictates the relationship’s terms needs to be in place. It should also contain the length of the agreement, how to terminate it, the agent’s and influencer’s responsibilities, what happens if there are a dispute, and examples of contract breach. Then obviously, the payment structure between the influencer and the agent.
Percentage Commission for Influencers
Typically, it would be a percentage of whatever the agent brings to the influencer. 20% is an average. Some of the most important terms in the influencer contract will also include what happens after the it terminates. Almost any agent will require some language in the agreement that states the influencer will have to pay the agent. Even after the contract terminates for a period, for any deals that the agent brought the influencer. Let’s say you are an athlete, and you have a sponsorship opportunity with maybe an apparel company. If the agent got you that deal, and even if the apparel company wants to continue the relationship, the athlete will usually have to pay 20% back to their agent for a year. That’s because agents don’t want to bring an influencer deal, then they terminate the relationship and get out of having to pay the commission to the agent.
Obviously, I would consider that reasonable and fair. Now, if the percentage is extended indefinitely, meaning the agent says, if I brought you this deal, you owe me 20% forever, that’s not reasonable. And that’s not something I would sign if I were an influencer. There must be a cutoff date, and you could even tear down the percentage over time. But that’s one thing that will likely be in the agreement. And that usually is negotiated.
Deals Based on Historical Metrics
Another aspect that I find people miss frequently is that you’re going to have deals with a set amount, and it’s based on historical metrics. You will have to provide these metrics to these companies. How many views do you get on a video, and what’s the average duration people watch them? What’s the interaction, and the subs versus non-subs? All that data goes to these companies, who decide on a reasonable sponsorship opportunity price. Well, if you have a deal based purely on metrics, you don’t know what you’re going to make until the video has been out there and calculations completed.
Your agent is always going to have access to all your content metrics. They will have access to your Instagram, TikTok, YouTube, or any of those things. Well, if a relationship ends, you almost always revoke access from the agent to those accounts. But if you have a compensation structure based purely on metrics, I can promise you the agent will want access to ensure they’re being paid correctly.
You Can Always Negotiate Terms with an Agency
Usually, there is a dispute if it’s not written in the influencer contract. So, there needs to be somewhere in the contract determining what will happen in that scenario. Suppose there is some deal based purely upon metrics. How will the agent access those numbers and understand that they’re accurate without full access to everything the influencer has? Because influencers are absolutely going to want to bar their past agents from getting into their current numbers.
You can always negotiate any term in an influencer contract. There’s nothing that’s ironclad, especially for an agency contract. Influencers have the leverage in these negotiations. The agent is going to make money off the influencer. And so, the influencer does/can exert some force in getting favorable terms.
If this is an excellent professional agent, there will be a limit to how much they want to change. They’re also treasured if they do a great job. And there’s always a push and a pull. But don’t think that if the agent says this is a take it or leave it deal, you need to leave it. There has to be some give and take in any contract negotiation. Alright, that’s what people should include in an agency influencer contract.
What is the Purpose of an Influencer Management Contract? | Influencers Agreement
What is the purpose of an influencer management contract? The purpose of any contract is so both parties can understand their duties and responsibilities when interacting with each other. A social media influencer management contract is a contract between an agency, a manager, a marketing company, or someone that’s going to oversee the career of the influencer, bring them sponsorship opportunities, negotiate the price associated with that opportunity and then facilitate the contracts between the influencer and those sponsors. Now, the management contract will be between the influencer and the manager. All the terms of the relationship in the influencer management contract must lay out. The most important terms in any contract, the same as an influencer management contract, are the term, meaning how long the contract lasts.
Influencer Contract with a New Manager
For the most part, influencer management contracts start at least somewhere between three to five years. That doesn’t mean if the influencer is unhappy with the manager, they cannot leave for the following reason. There will also be a section called termination. And then, that section will go over how either party can terminate the contract. Almost every contract will have what’s called without-cause termination. This means either party can terminate the contract at any time, for any reason, with a certain amount of notice to the other party.
If you are signing an influencer contract with an agency or a manager, you want to have without-cause termination in there. It would be improbable it wouldn’t be in there, but if it was absent from the contract, you could be in a horrible relationship with the manager and cannot terminate it if they’re not in breach of contract. And essentially, you’re stuck with many you don’t want to be with for years. So, you have to make sure that without-cause termination is in the influencer contract.
There will also be a section about compensation. So how much will the manager or agency get paid by the influencer? For the most part, it’s based upon a percentage of the commission. Whatever the sponsorship deal is with the influencer, the agent/manager will get a portion of that. 20% is the industry standard. Certainly, it could be less or more, but around 20% of whatever you make as an influencer will likely go to your agency or manager. Now, indeed, influencers can negotiate that. But that’s a standard amount.
What Usually Happens When Contracts End
What also needs to be in there is what happens after the contract ends. Every manager agency will put a clause into an influencer agreement that states that even if the relationship terminates, they will still receive a percentage of any of the deals they brought to the influencers for a set period. Usually, that’s one year.
Let’s say your management company got you a deal with the skincare line, then the influencer terminates the contract with the manager. Still, the skincare company wants to continue the relationship with the influencer. The influencer will still have to pay 20% to their old manager for a year. Managers do this because what they don’t want to do is bring a deal to an influencer. The influencer terminates the agreement, takes the deal, and does not have to pay any commission to their past manager.
This is an equitable term in the contract. Now, indeed, influencers can negotiate parts of this. Maybe shortening the time, they have to pay any commission to their old agent, or perhaps narrowing the commission percentage over time, which means, that maybe every quarter, if it starts at 20, then 15 in the second quarter then 10 in the third and five in the last.
And then the responsibilities of the parties are going to be laid out as well. What will influencers have to do? How fast will they have to respond? And in which way will they have to communicate? Will they have to post content about their management company, or is it just the sponsors? Who pays for travel? If there’s just a one-off, what will the percentage of that be for the agent?
Why Contracts are Crucial
I mean, there are a ton of things that influencers must consider in advance. The worst thing that can happen for a digital creator or influencer is to get into a bad contract with a manager, get taken advantage of, and maybe even have their career stifled in some way by not being able to pursue the best opportunities.
The last thing to think about is many influencers are surprised that most of these management contracts are exclusive. Meaning, even if a friend, another influencer, or another agent brings a deal to an influencer, they have to take that deal back to their manager if they’re in an exclusive management contract.
The manager will then negotiate it and still get 20%. Even if someone brings you deals independent of your manager, it’s very likely the manager will still get 20% of whatever deal. Is that fair or not? Well, that’s just part of having a manager. So, that’s the purpose of a management contract. It just lays out all of the responsibilities for both parties.