What is the Purpose of an Influencer Management Contract? | Influencer 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. Other topics of interest include:
- How Long are Most Influencer Management Contracts?
- What Should an Influencer Management Contract include?
What Usually Happens When an Agreement Ends
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 Influencer 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.
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.
How Do I Get an Agent as a Social Media Influencer? | Influencers and Agents
What is the best way for a social media influencer to find an agent? At some point, as an influencer grows, it will make sense to hook up with a professional. It could be a manager or an agent marketing agency. It’s all the same thing. It’s essentially someone who is going out on your behalf, looking for sponsorship or collaboration opportunities. They will bring you the deal. They will negotiate the terms of the compensation, the terms of the relationship, how many posts you must do, how long the spot if you’re doing a YouTube video, and the details of the situation. And they essentially act as a shield between the influencer and the sponsorship company.
Influencers Search for an Agent
Now, what’s the best way to look for an agent if you’re so inclined? As someone who has represented athletes in the past, I find the best way to find an agent is through your friends. If you’re an influencer, you likely have relationships with other influencers, and it is best to reach out to them to see who they’ve used, see who they may have used in the past but have terminated the relationship with. That’s the best way to do it because you’ll know firsthand how the person operates. Obviously, this has to be someone you trust if they’re going to give you advice on who a potential agent is. You could Google around on the internet. There certainly are some larger agencies.
Most individuals, like smaller managers and agencies, may not have a huge web presence. So, you’ll be missing out if you try to Google somebody. I don’t think that’s the best avenue. The one avenue that you absolutely should not take is utilizing a friend. Repeatedly, I find people who will say, oh, you know what? I’ve been interested in getting into being an agent or manager. And then maybe one of your friends is like, oh yeah, I can do it. I think this is a bad idea for several reasons. One, knowing the industry is extremely important for an agent. They need to know the going rate for an Instagram story, a YouTube video, or a personal appearance. You’re not going to know these things if you’ve never been through this before. That will also know when to push back, how much is expected of the influencer, and how many appearances they must make. And what the industry norms are.
Take a Professional Agent With Experience
Not to say it’s impossible for someone who’s never done it before, but it’s very difficult. And it’s very likely the influencer will be leaving money on the table if they go with somebody who’s never had experience doing it before. Plus, emotions can get, or a better way of saying it is, emotions can interfere when you have a friend also acting as a business partner. If the relationship sours in the business realm, it will also spill over into the personal realm. And most people don’t want to lose a friend over something like this. So, if you’re going to find an agent, absolutely make sure it’s somebody who is a professional, who has experience doing it and has a roster of clients that they can show you.
Many agents will start in an agency, get their feet wet, learn the business, and then go off on their own. That’s probably the normal course of business. Now, does this agent have to be an attorney? No, they don’t. As an attorney myself, they certainly can bring more contract knowledge if they have experience with doing contracting, but an agent does not have to be an attorney. I would say at least half of them are not. Now, how much do you have to pay this person? That’s always a big question. It’s based upon a percentage of the commission. Whatever deals this person brings you and negotiates the price, they will get a portion of that.
Influencer Marketing Agencies Advantages
Very rarely are you going to find any agent influencer relationship where it’s a flat fee. Most of the time, the percentage is around 20%. It could be less, it could be more, but the average is around 20%. That’s considered a reasonable amount. If someone is asking you for half or 40%, that is not a reasonable amount. You must do, I guess, a little math equation in your mind about, alright, is the value that this agent will bring me worth more than the 20% of all of my deals that I will have to give to them? Because most of these agents will have an exclusive management agreement with the influencer, that means the influencer cannot use anyone else for any deal-making.
Not only that, if an influencer has a friend, family member, another agent, or influencer they know. If they have anyone bring them deals independently of their current agent. Most of the contracts will still have the influencer give whatever potential opportunity is to their agent. And then that agent will then negotiate the deal and still get the 20% even if they had nothing to do with bringing it to you.
Most agents fear that they will bring a great opportunity to an influencer. The influencer terminates the agreement and then tries to get out of having to pay the agent. That’s why an influencer agency management contract is extremely important. And generally, in that scenario, most influencer management contracts will have some provision that states that the influencer will owe their agent whatever state of percentage is. Usually for a year after the agreement terminates for any of the deals that that agent negotiated on behalf of the influencer.
To wrap up, talk to your friends, see who they’ve used and if you’re going to Google, I would go for news articles, see some of your favorite influencers, and there may be a mention of who represents them, and then you can contact them that way.
Certainly, there will be a threshold. Some agencies simply are not going to work with people that don’t have a certain amount of following. And that’s okay. But you should be able to find someone who is professional and reputable and can assist you with your career no matter what level you are at.
Do Influencer Managers Have Contracts? | Need for Safe and Fair Influencer Management Agreements
Do influencer managers have contracts? In short, they better have. Suppose you are an influencer and have decided that you’ve reached a level where you think some professional representation would help you move forward. In that case, you’re going to look for an agency, a manager, a management company, or an agent. It’s all the same in the influencer realm. Outside, in other industries, like with actors, some legal definitions and laws, especially in California, dictate the different roles a manager and agent can have. They must be licensed through an agency. There’s a cap on the percentage they can take. Whereas in the influencer arena, at least as far as the date of this blog, it’s a gray area.
Influencer Marketing Contract Concerns
And there’s not a lot of regulation of the industry. Most of any management is all lumped into one big pot, even though they might be called something different. Suppose you have reached a point where maybe you found a social media influencer manager or an agency you’re interested in associating with. In that case, there will be, or at least they will require, an exclusive management contract between them and you. That contract will dictate all the terms of the relationship between you and the manager. The length of the agreement, how to terminate it, the commission percentage or flat fee paid to your manager, and what happens after termination. There are some things you’ll have to continue paying the manager after the agreement ends. And there’s language in there about that.
What if There’s a Dispute?
What happens if there’s a dispute? Where is that dispute heard? It’s called the venue. The responsibilities of the manager, of the influencer. The entire point of a contract is that if there are some disputes, it should be spelled out in the contract as far as somebody is in breach. Is someone not doing what they said they would? In that scenario, a contract helps avoid and resolve disputes without going to litigation or arbitration or depending upon what’s in the contract. If you find someone and they say, you know what, I don’t want to make this a formal thing.
Let’s just handshake, verbally agree to the payment, whatever, that’s an enormous red flag, and no influencer should go into that for a couple of reasons. In almost any management contract, there will be some language stating that after the contract terminates, the manager will still receive a percentage of any deals they brought to the influencer for a period. Usually a year.
It’s Usually an Exclusive Management Contract
Also, it will have language that states the exclusive management for the influencer. Maybe if a friend, another influencer, or a sponsor reaches out directly to the influencer and says, here’s an opportunity we’d like you to take, there will be language in the contract that states the manager has to be given all of those deals, no matter what. And they’ll still get a percentage of those deals, even if they initially didn’t bring them to the influencer. And then also, how did the relationship end? Do you have to give some notice, which is typical in a contract? What happens if one party is in breach of contract? Does the agreement automatically renew after the initial term? The influencer has to figure out all this stuff in advance. Going into a relationship without a contract is a recipe for disaster.
Content and Brand Language in Influencer Contracts
Now, if you are an influencer and you’ve received a management contract, it needs to be reviewed by an attorney. It’s just reality. Some say, ah, I don’t want to throw down the money. When I review many employment contracts for healthcare providers and physicians, we can save or gain hundreds of thousands of dollars for these physicians. And they’re concerned about spending a tiny fraction of that on a review. If you’re doing it the smart way, you need to get a review from somebody. That person can assist you in knowing, alright, what is an average percentage? What should the language look like? As I said before, all the things that you should be concerned about. If a manager brings you their contract, it will be slanted towards the manager.
That’s just how it works. And so, the influencer needs to push back, and everything is up for negotiation. And the good thing and negotiating for an influencer is the influencer has leverage. You could choose anybody and the manager. Although they can bring a lot to the table, they also stand to make a lot of money off the influencer. And so, the influencer has some leverage in making changes to the contract.
Aim to Reach a Compromise When Signing a Contract
If a manager gives you a contract and they give you a take it or leave it offer, you need to leave it and move on. There should be no take-it-or-leave-it offers when it comes to an influencer management contract. You need to make sure that you’re comfortable signing the agreement.
Usually, in a good negotiation, both parties feel aggrieved in some way. So, both parties had to give a little bit. But if you get to that point, that usually means it’s a good compromise and probably a decent agreement for both parties. So, yes, there absolutely needs to be a contract between the influencer and their manager.
Influencer Management Contract Terms | Laying the Groundwork for What is Expected in Influencer Contract
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 Include
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.
Influencer Management Contract Questions?
Contract Review, Termination Issues, and more!