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, it’s somebody who’s going to go out and try to find your sponsorships so that you can get paid for your cloud. Now, you will absolutely want/need to sign a social media influencer management contract that will outline the responsibilities between the parties. For example, you want to know how long does the contract last, what’s the terms of the agreement, and how can the contract be terminated. So, do you have to give notice? Is it a fixed term?
Influencer Management Contract Terms
Does it renew automatically at the end of the initial term? How to terminate the 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 you 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 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 total deal back to the manager. 20% is kind of an industry standard. It can be more or less, but 20% is kind of an industry norm as far as how much percentage of commission paid back to your manager. What the expectations are of the influencer as well.
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 on your own outside of 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 that 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. Other topics of interest include:
- Can an Influencer Break Their Management Contract?
- How Long are Most Influencer Management Contracts?
Also, what are the obligations once the contract ends? As I stated before, you’re going to pay the agent/manager a percentage of whatever the commission is for the deals that they bring you. Almost every contract will have language that states, after the contract ends for a period, any deal that they’ve brought you that continues on 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 then you terminate the agreement, you’re still going to have to pay them, let’s just say 20% for a year after the contract ends. Managers do that because what they don’t want to do is bring an influencer deal and then the influencer immediately terminates the relationship, takes the deal, and then gets out of having to pay the percentage of the commission back to the manager.
Influencer Must Pay Agent After the Contract is Terminated
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 on for whatever that kind of restricted period is. There’ll also be language in the contract that states what happens if there is a dispute. You have an arbitration clause, 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’re going to have to give proper notice to your manager. 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 contract prior to executing any kind of management relationship within a manager or agent.
How Long Are Influencer Marketing Management Contracts?
How long are most influencer management contracts? If you’re an influencer and you’re starting to get bigger, at some point, it’s likely that you’re going to want to reach out to a manager, an agent, a marketing agency, it’s all kind of grouped into the same thing. And then you’ll establish a relationship where they will go out and find deals to bring back to you and then negotiate the compensation and essentially just kind of assist you in growing your business as an influencer. Now, before you establish that relationship, a contract needs to be signed that details the responsibilities between the manager and then the talent, the influencer. If that is not in place, I can promise you, there will be a discrepancy down the road and without a contract in place, those types of issues can magnify greatly.
Now, one question I get frequently is, how long is a management contract? Many influencers are concerned like, I think this person is good. I’m interested in them becoming my manager. However, I don’t necessarily know them, and I certainly haven’t worked professionally with them. And so, if I don’t like them, but I sign through your contract, what do I do? In any contract, there’s going to be some language that states how long it lasts. Most influencer contracts or at least influencer management contracts are somewhere between one to five years. And that just simply means the contract will go on for that time. And then there’ll be language that states that it either will automatically renew if neither party terminates the agreement or if it’s a fixed term, it could just simply end if there’s no renegotiation after the end of that period.
Negotiating Influencer Agreement Process
Now, in every management contract, there usually is, but absolutely needs to be a section that’s called without cause termination. So, there’ll be a term section that says how long it lasts and then a termination section that lists how the contract can be terminated. There are four common ways a contract can be terminated. One, as I stated before, if it’s just a fixed term and it’s not renewed, it just ends. Two, by mutual agreement. If either party is like, this isn’t working out, regardless of the rest of the contract terms, we just want to move on, and wash our hands of the situation. You can mutually agree to terminate the agreement. Three, breach of contract. If one party is not following through with the responsibilities of the agreement, the other party can provide them with written notice that they’re in breach of contract.
And then if that party doesn’t fix the problem, or doesn’t cure the breach, then the party that’s not in breach can terminate the agreement immediately. And then the most common way is without cause termination. And it just simply means that either party can terminate the contract, at any point, for any reason, with a certain amount of notice to the other party. Normally, it’s somewhere between 30 to 120 days in most influencer management contracts. Meaning, let’s just say you have a 60-day notice requirement, then you would provide written notice to your manager that just states, per the agreement, I’m giving you 60 days’ notice that I am terminating the agreement. Then you would work out those 60 days, and at the end of the 60 days, then you would be free to find a new manager or agent and move forward. Although the term of your contract, I mean the length of the contract could be three years, you still can get out of it at any point within 60 days or whatever the notice amount is in your contract.
Influencer Brand and Content Tied to Term of Agreements
So, you’re not stuck for three years. You do have the option to terminate the agreement. Now, it absolutely needs to be in there. If you don’t have language that states you can terminate the contract without cause, you need to speak to someone who understands that and can put it into the agreement. You have to have options if it’s not working out. If you’re with an agent or a manager who is just simply underperforming and not bringing you the deals that you should be getting, you can’t stick around, you must cut ties and move on to someone better. And without cause termination will allow you to do that. A couple of considerations after the contract ends: even though you can terminate the contract without cause, there very likely is going to be language in the contract that states any of the deals, so any of the sponsors that the manager brought to the influencer during the term of the contract, that manager is going to get paid their commission percentage for usually a year after the contract terminates.
Let’s just say you reached a deal with the skincare company and the manager brought it to you. Well, even if you terminate the agreement, you’re still going to have to pay that commission percentage back to that manager for a year after the contract ends. Even if the brand wants to continue the relationship, and even if you have a new manager, that new manager is not going to see a dollar of what that old deal made by your old manager was, because there will be some kind of provision in the contract that states you’ll have to pay them the percentage for a year after the contract ends. Why is that? Well, most managers don’t want to bring someone a great deal, and then that person terminates the agreement and then avoids having to pay the percentage of the commission back to the manager for bringing them that deal. I mean, that just makes common sense.
Now, a couple of things that an influencer can do, you can either shorten that period you’d have to pay back the percentage, you can lower the percentage over time, so maybe if it was a 20%, then it’s like 20% for the first quarter, 15 for the second, 10, 5, step it down. But you need to protect your interest as well. If you have terminated the agreement with a manager, it is for a reason and I can just tell you, just on an emotional level, it feels bad to have to continue to pay your old manager when they’re not even assisting you anymore. So, that’s how long a normal influencer management contract is, and the ways you can get out of it.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!