What Should an Influencer Agency Contract Include? | Agency Influencer Agreement
What should an agency contract between an agent and an influencer include? What needs to be in that influencer agency management contract? Before you establish any working relationship with an agent, a manager, an agency, whoever it is, there needs to be a contract in place that dictates the terms of the relationship, and what should be included in that agreement would be the length of the agreement, how to terminate the agreement, the responsibilities of the agent, the responsibilities of the influencer, what happens if there is a dispute, what are some examples of breach of contract and then obviously, the payment structure between the influencer and the agent. Normally, 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 contract will also include what happens after the agreement terminates. Almost any agent is going to require some language in the contract that states the influencer is going to have to pay the agent, even after the contract terminates for a period, for any deals that the agent brought the influencer. Let’s just say you are an athlete, and you have a sponsorship opportunity with maybe an apparel company. If the agent brought you that deal, and even if the apparel company wants to continue the relationship, the athlete is going to have to pay 20% back to their agent for normally a year. That’s since agents don’t want to bring an influencer deal, 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, if the agent says, if I brought you this deal, you owe me 20% forever, well, 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 as well. But that’s one thing that will likely be in the contract. And that usually is negotiated. Another aspect that I find is missed frequently is most of the time, you’re going to have deals with a set amount, and it’s based upon historical metrics. Other topics of interest include:
Influencer Contract 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 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.
Usually, there is a dispute if it’s not written in the agreement. 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 the influencer is absolutely going to want to bar their past agent from getting into their current numbers.
No Good Influencer Contract is Ironclad
You can always negotiate any term in an agreement. There’s nothing that’s ironclad, especially for an agency contract. The influencer has 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 agreement.
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 Management 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.
Exclusive Management Influencer Agreement
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 an Influencer Agreement
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 the 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. 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.
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.
Influencer Management Contracts | Should You Sign What Your Manager Brings You?
There is always a temptation to assume that your manager is always putting your best interest first when you have someone who takes care of your day-to-day business operations. But that is not always the case. Think about the 90s pop band “The Backstreet Boys” members and how their manager Lou Pearlman took them for a ride. In that case, Pearlman was dead set on scamming the pop band out of their hard-earned money from the start. However, he was so charismatic and charming that many couldn’t believe he had done all he had to scam the boys (and many others he represented).
The Pearlman case is an extreme example of injustice by a manager. Still, it is also a cautionary tale for anyone who thinks that their talent agents and others they give responsibility over some portion of their money-making abilities always do entirely ethical things. This is one of the reasons why it is important for an influencer management contract attorney to always go over all of the documents presented to you as an influencer. You are simply better off safe than sorry when it comes to these types of things.
Contract Terms That Are to Be Expected
Contracts need to have rules and stipulations to them, and there are certain things that all talented influencers should expect in any contract they take on. That is to say that not everything noted in a contract has to be looked upon with suspicion. It is best to evaluate on a case-by-case basis. Here are a few ideas that you would expect to be in influencer management contracts:
- Terms of Employment (of the manager) – There should be definitions of the manager’s responsibilities and what they need to do for their agent to remain employed by that influencer. The manager must have everything spelled out for them in precise detail to ensure they know exactly what is expected of them in meeting the terms of their contract. Failure to place these specific terms in their contract could leave too much room for misunderstandings, and no one wants to put themselves in that position.
- Objectives That Must Be Met – The manager needs to bring in a certain amount of business for the influencer to make their services worthwhile. A contract that details those objects can be a very powerful contract indeed. After all, it is always nice to know that everyone is shooting for the same targets in these situations.
- Compensation Structure – There are numerous ways that influencers and their managers may work out the compensation. If a manager sees that they are likely attaching themselves to a superstar influencer, they may be more prone to look for ways to cash in on what they see as a lucrative career ahead. Thus, a manager may seek to earn some share of the future profits that the influencer generates during their work. Influencers should be somewhat wary of this as they don’t want to give away too much of the equity they have in their own future earnings.
These are all typical terms in influencer management agreements that one might expect to see. One should pay close attention to the last point about compensation structure because this is where some managers will try to slip in clauses that entitle them to more than they are honestly worth.
Is it Necessary to Have a Lawyer Look it Over?
You are not legally obligated to have an attorney look over your influencer management contracts. Still, it would help if you considered doing so to avoid any outcome you don’t want to see. It takes a short time and a small amount of money to get an attorney to look over what you need within the contract you are working on.
When you do hire an attorney like this, you can ask them to kindly review the contract that you have received from a manager line by line. The benefit you get from this is having an attorney sign off everything that looks legitimate to them. Instead of spending excessive time worrying about what may or may not be contained within a contract, you might be signing, why not spend that time working out the details of how you will construct your next videos for social media?
It is more challenging to be a social media influencer than many believe, and it takes a lot of work and concentration to pull off. This is impossible if you are always worried about scanning through every contract.
How We Can Assist Today
There are plenty of things that we can do to help you out. When dealing with an agreement with a manager you might want to hire, we can help with legal matters. Here are a few of the things that we offer to everyone who schedules an appointment with us:
- The chance to look over every piece of information contained within a contract
- A one-on-one meeting with you to talk about the features of the contract that you are proposing
- Recommendations for suggested edits to your contract to make it more applicable to the situation you find yourself in
- Formatting recommendations to ensure that all elements are included in a standardized way that you can use again
If you need a manager, you need to ensure quickly reviewing any potential contract. Therefore, we highly recommend you contact us to start the legal process. It takes a while to get things just right, and this is why we want you to start the process by calling our offices today. It is the best and only way that we can start working on your case.
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!
