What is a Standard Influencer Management Commission?
What is a standard percentage of commission that a social media influencer management company will take? At some point, if you’re an influencer and you get big enough, you may want to reach out and try to find some assistance in securing some more sponsorship opportunities. And you’ll do that by finding an individual agent, an agency, a manager, or a marketing management agency. It’s all the same thing. Their role is to go out and bring the influencer deals that they might be interested in. And then for that, they will get a percentage of whatever the compensation that’s paid to the influencer for the sponsorship opportunity. Before the management company starts looking for potential deals for the influencer, they will sign an exclusive management contract.
And then that contract will dictate the terms of their relationship, so how long it lasts, how it can be terminated, what are the expectations of the influencer, what are the expectations of the management company, and then included in that would be how much, or what percentage of the compensation that the influencer receives goes as commission to the marketing agency. A standard amount would be around 20%. Now, everything is negotiable. There is certainly wiggle room to bring that down if you are an influencer, however, just like in any industry, the better someone is at their job, the more they can charge. And so, if you find a rockstar agent, and they’re certain they can bring you from this level to this level, but they’ll charge 2% more, 5% more, or whatever percentage than somebody else, well, you’re going to have to make a decision and kind of do a math equation of, alright, I could go with someone who may not have as much experience for 10% or go with someone who’s extremely experienced for 25%. Will that 15% difference be made up in all the better, higher-paying, higher volume of opportunities that a more experienced agent may bring?
I can’t answer that question. You’re going to have to make that determination on your own. But those are kind of the standard commission percentages. One thing to think about: in any kind of management contract, it’s going to state what happens after the contract ends. Let’s say the influencers, for whatever reason, decide to move on from the manager. They’ll give notice and the contract is going to state how much notice must be given, somewhere between 30 to 120 days is standard. You would still have to work with the management company for that period, depending upon the language. Other topics of interest include:
- Is there a Non-Compete in an Influencer Management Contract?
- How can an Influencer Terminate a Management Contract?
But then this is the important part: there’s going to be clause that states, if the influencer leaves, they will still owe a commission percentage to the management company for a period after the contract ends. So, for any of the sponsors that they brought to the influencer, let’s say the management company brought a meal prep company that’s interested in working with the influencer, and then they’ve been working together for a couple of years. Well, after you terminate the contract with the management agency, you don’t just automatically get to keep all of the money from that meal prep company. If they wanted to continue working with you, you’d have to pay 20% back to the old management company, usually for one year after the contract is terminated. This is simply a way for a management company to make certain that they don’t bring deals to an influencer.
And then the influencer terminates the contract, takes those deals, then avoids having to pay the 20% to the management company. That’s an industry-standard restriction after a contract ends. Now, what you could negotiate is the length of the restriction, the percentage that the management company will get during that period or limiting the look back. In most contracts, it’ll state any deal that they brought to you during the relationship between the influencer and the management company. So, if it’s been a five-year relationship and they brought you a deal in year one, you haven’t worked with that brand for four years, and then they come back to you after you terminate the contract within that one-year period, theoretically, the management company would still be owed 20%. So, you want to limit that look-back period. One year is what I would consider a reasonable amount, someone might consider a longer than that.
But it’s the role of anyone who’s advising you to tell what would be advantageous to you. And I would say limit to one year, looking back, and then one year going forward, that would be considered a reasonable amount. You could also reduce the percentage that the management company receives, maybe quarterly, so every three months, go from 20 to 15 to 10 to 5. And then after that one-year period, it’s over with. So, 20% is kind of an industry-standard amount. Could be more, could be less, but that’s about the average.
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