Your Business’ Team: Influencer and Marketing Contracts
Like they say, it takes teamwork to make the dream work!
As a content creator you are at the center of your business. But, especially if your business is starting to scale past the ‘side hustle’ stage, you likely are receiving help from people around you. That help may cover specialized services or even just repetitive tasks. Ie. personal assistant, graphic designer, social media manager etc.
Building a team is exciting, so pat yourself on the back! Having a clear contract between you and each member of your business team is a universal piece of advice for avoiding misunderstandings, disagreements, and even conflict.
This PYPR Pointer briefly introduces two important contracts that you will need as your business grows: the influencer contract, and the management contract. For each we discuss some key points that are especially important.
An influencer contract is all about the relationship between you and a brand. The owners of the brand are hiring your business to represent and promote the brand. Of course, you are promoting the brand’s offer in exchange for compensation.
The exchange of compensation from the brand for your services as the influencer is what makes this deal a legal contract.
From a more technical perspective: the influencer contract is a contract for provision of services, in other words, it is a contract of a commercial nature, which regulates the relationship between two parties, in which one (called the company) intends to promote its brand through the prestige and recognition of the other (called the influencer) in social networks, in exchange for a payment of an economic nature or in kind.
This section briefly introduces some key exchanges of acceptance and consideration in influencer contracts. These include:
- the object of the contract
- client’s approval rights
- exclusivity provisions
- intellectual property
- key messages
It would be hard to imagine writing an influencer contract without the following…
Object of the contract:
Remember that the brand is now your client. The contract should outline and specify in as much detail as possible, exactly what you, as the content creator, will do and how the content is to be delivered. I.e. the number of publications, how there is going to be a script by the influencer (minimum of hashtags or keywords, or include in the post a brand slogan, among others); or the type or types of channels to be used to promote the brand (Instagram, Facebook, Tik Tok YouTube.)
Client’s approval rights:
It may be that the client needs a preview for subsequent approval of the created content. For example, the client may have a preference about whether you simply push the content live or maybe you need to send it in advance through a particular system i.e. for review and approval.
This is a very important clause in the contract. The contract should state whether or not or there is exclusivity on either side. It should also be considered whether the influencer can include other brands in the content that he/she posts or not. The exclusivity of the influencer refers i.e. to the possibility or not of the influencer offering his services to other brands and/or the advertiser. Likewise, it needs to be negotiated whether there is a limit on the advertiser working with other influencers.
Consider whether you need to maintain ownership of your content. The client can still license that content from you. A clearly drafted license that is acceptable to both sides is recommended.
While the client will want you to use your own voice and opinions about their product / service, it may also wish to provide the key messages you present. Sometimes the brand will send you the product chosen by you (i.e, clothing), or sometimes it will have the courage to send you the product without knowing your tastes or preferences, in this case the contract will have to establish the limits of the message to be transmitted on social networks.
Creating content can take a tremendous amount of time, energy, and (lets face it) money. It’s a good idea to have clarity with your client about their branding expectations. Therefore, it is important to follow a certain statics and the style of the brand, but on the other hand it is also important that you, as an influencer, do not lose your personal touch. So you must be clear on your style and your perspective in order to follow the line of your profile, and not be prejudiced. (i.e. you lose followers, other brands stop collaborating with you).
A management contract is all about the relationship between you and the person or firm who connects you with specific opportunities. A good manager will also help you vet opportunities so that you find the right fit for you and your business.
In time, your manager should hopefully become a trusted advisor. But, this is easier said than done because the manager and the influencer/creator often have different interests and incentives. A well drafted manager contract should help to bring these interests and incentives closer together.
Appointment of the manager is the foundation of a manager contract, of course.
All management contracts will have an appointment provision but not all appointment provisions are created equal. It makes sense to think about what exactly the Manager is going to be helping with: all of your business activities, or just your business in a specific industry vertical.
You do not necessarily want to give away the “whole enchilada” of all your creative work to the first manager that you sign with. Depending on you and your needs, it may make more sense to limit that first manager’s appointment to only assisting with a specific platform, for example. This way you leave the door open to the possibility of expanding your team to include people with expertise in other niches or industries.
Management agreements in the entertainment industry often include so-called “keyman” clauses. I’ve changed that to KeyWoman for present purposes.
If you are signing up to a management company, also known as a talent agency, it is important to be clear about exactly who you are going to be working with. If you agreed to join the agency because of a particular strong rapport with one agent, then it is a good idea to get in writing that the agency will be providing you with the services of that specific person.
Another reason to include a keywoman clause is so that, if the individual leaves the agency, agreement can be terminated rather than having another agent pushed on you.
3: Managers Obligations
It is often hard to get Managers to commit to specific obligations, especially in writing.
A Manager’s role is ephemeral and can be difficult to reduce to a written job description. But, that does not mean that you as the influencer/creator are necessarily well served by skipping over this provision. One technique we sometimes use is to focus on the quality of the relationship rather than specific tasks.
Of course another way of focusing the manager’s attention on getting you more and better work is through the right commission structure.
A rate of [____]% of gross income may be standard depending on your specific industry. In that case, you should not agree to pay more than this.
Other important points include:
(i) items to be treated as non-commissionable:
-Influencers/creators should not be expected to pay commission on monies advanced to cover business costs. Depending on your specific format, these routine costs may include: recording costs, video costs, third party producer’s advances or royalties etc.
(ii) sunset clauses:
There was a time when powerful managers routinely collected a commission at full rate on all the deals they introduced even after the management agreement was terminated. Fortunately, it is now widely recognized that after the term of the agreement there should be a limit on commission payable. But, the question is now where exactly that limit should fall.
This does often become one of the *harder* parts of negotiating a management agreement. In practice, one solution is to link the length of post term commission to the time spent managing.
The above are just some of the exchanges that need to be considered and then negotiated in your business’ contracts. As your business, you are going to become more familiar with the details that come up in these contracts and you are going to learn about what others in your industry have been able to negotiate.
Who knows, in time you may come to find that negotiating contracts is kinda fun. In any case, your negotiating position will definitely become stronger over time.
Experience suggests that there are two ‘golden rules’ to follow in this negotiation process…
Win-win. It may not be possible in every last little detail, but, in the big picture we want to make sure that both sides are winning.
Remember, business is not personal!
Have you noticed that people can be very aggressive about what they will do to make a buck? Before going into any business negotiation, it is important to have a clear understanding of your own limits and boundaries. In this way, you can use the contract to enforce your limits and boundaries, rather than the contract using you.
Other types of contracts that you will want to develop as your business grows are: subscription contracts (i.e. the Fan Club) and, of course, the non-disclosure agreement.
If you have any questions or need legal services please email Contact@hellopypr.com
*These Pypr Pointers were provided by lawyer & Pypr Partnr Matthew L.