It’s no secret that Instagram influencers and brand ambassadors are getting paid by the truckload to post images, videos, and stories for brands. In fact, it’s now estimated that 1 out of every 20 posts in your Instagram feed are from paid influencers. And as buying ad space in the popular social media platform gets more expensive, you’re sure to see an explosion in influencer related posts.
But what happens when a brand reaches out to an influencer? How does the relationship start and evolve? How do influencers get paid? We dive in to these questions and more by analyzing a real influencer contract to highlight the most important aspects of starting and maintaining business relationships between brands and social media influencers.
What to do when a brand wants you to sign an influencer contract:
Brands need influencers to create engaging posts that fit their audience and style, but that also deliver a specific brand message. The aim is to seem as authentic as possible. In this way, brands can hope to reach and engage as many followers as possible with a single paid post, stretching their marketing budgets to the max. But brands also have legal departments and governing bodies like the Federal Trade Commission (FTC) to worry about. That’s why when brand engage influencers and brand ambassadors, they almost always want a signed contract before the deal can move forward.
Review the influencer contract line by line
We’ve all seen television dramas where reading a contract can mean the difference between life and death. Real life isn’t quite as high stakes as Law and Order, but it’s still important to read every line of an influencer agreement when it’s presented to you. Marketers and agencies always push to move quickly, but you shouldn’t let artificial deadlines keep you from knowing what you are signing. In this article, we’ll review a standard short form influencer marketing contract, and share why each line is important to both influencer and brand.
NOTE: I am not a lawyer, and this post should not be interpreted as legal advice.
Most influencer contracts start by identifying and defining the brand or agency and the influencer. The new working relationship means each party will want to know a few details about the other:
This Agreement, executed on _________, 20__, is entered into by and between SAMPLE AGENCY, LLC, a Delaware corporation with an address of 147 W Captial St #1300, Newark, DE 19702 (hereinafter referred to as the “Company”) and __________________actor/model with an address of ________________________ (hereinafter, the “Influencer”). Company and Influencer may be referred to collectively as the “Parties.” For good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows:
Note that the influencer contract refers to the influencer as an actor/model. That’s because the idea of brand endorsements is as old as marketing itself. The most common form of influencer content we are used to seeing is product placements with celebrities or in commercials. Most influencer contracts have been adapted from source material that originated with that kind of talent. Now that we’ve been introduced, it’s time to talk about what it is we are going to be doing together:
1. Engagement. Company hereby engages Influencer from the date of execution of this Agreement through and including the date(s) of performance (“the Term”) for the limited purpose of promoting certain brands and brand content, through Influencer’s social media outlets. The nature of the brand content to be promoted and the specific details and requirements of the promotion is outlined in the attached Schedule A. During the Term, Influencer agrees to be engaged for the purpose of promoting the brand content and to be bound by the guidelines as attached as Schedule B (“Guidelines”).
Well, at least the introduction section was easy. The influencer contract is designed to determine the inner workings of the relationship, such as when payment is due and who owns what after it is created. Schedule A and Schedule B are attachments to the influencer contract that will tell both parties how much money will be paid for what content, when content is to be posted, which social platforms (Instagram, Pinterest, Youtube, etc…), and any other details about the end product.
Schedule B specifically will talk about brand guidelines including desired colors, fonts, or other creative direction. Schedule B will also tell influencers what not to do, like use profane language or show too much skin. Because Schedule A and Schedule B will be totally unique to the deal you have been presented with, we won’t show any specific examples here. The influencer marketplace is very loose. Standards for compensation amounts, deliverables, and even communication practices have not been defined.
Do brands have rights to your social media posts?
The short answer is simple: Brands have exclusive rights to use your work as they see fit – if you sign a contract saying they do! As a brand, the goal will always be to get full rights over any content that is produced under an influencer contract. But influencers don’t have to give everything away. Many influencers will specify where and when their content may be used, and for how long. If the brand wants more, they have to pay for it. There are three basic parts to the rights section of a short form influencer contract:
A. Ownership. Influencer acknowledges and agrees that Company for the purpose of performing the Services under this Agreement shall own, exclusively and in perpetuity, all rights of whatever kind and character, throughout the universe and in any and all languages, in and to the videos, photographs, text and/or all works of similar nature produced, developed, or created by the Influencer for this Agreement, and any and all intellectual property rights thereto, including trademarks, trade secrets, trade dress, design, mask work, copyrights, and patent rights (collectively, the “Content”), including the right to sublicense the Content to Company’s brand partners (the “Brand Affiliates”) . Notwithstanding the foregoing, Influencer may delete posts from his/her owned and/or controlled social media channels containing any Content after a period of thirty (90) days from post date.
In the above example the brand is taking full ownership of all content produced according to Schedule A. That does not mean the brand owns all content produced during the contract period, but only the content listed in the contract itself. Like it or not, this is a standard part of most modern influencer marketing programs. Brands are paying what they see as good money for a piece of content, and they want to be able to use that in future marketing efforts. That may include everything from a banner ad on the web to a billboard in Times Square. And yes, the brand can even resell or license your content for money to another party, and keep the proceeds.
Every situation is unique, and if you don’t like the idea of a brand owning your content you can always request this be removed. Of course the brand can always push back too!
The final sentence in the first portion of the Rights section is a nod to professional influencers. Most influencers don’t want their feeds to look like a running series of advertisements. They want to maintain the authenticity and awesome content that helped them become Instagram famous in the first place. That’s why they delete old sponsored content from brands from their feed. By deleting old ads regularly, an influencer avoids a number of issues:
- Appearing inauthentic to their loyal follower base
- Getting penalized for new laws that could be enacted in the future about brand sponsorships on platforms like Instagram
- Turning off competitor brands that would otherwise hire them
It’s a lot to think about! Once you start taking money for Instagram posts the stakes go up and things get real. That means seeing all the angles and thinking about the future. Even if you’re doing your first brand deal, you wan to do it right.
B. Usage. Company shall cause Influencer to grant to Company and to Brand Affiliates a limited, non-exclusive, royalty free, right and license to feature Content generated by the Influencer as part of the Campaign (including influencer’s name and likeness) on Company’s and Brand Affiliates owned and controlled social media platforms and within third party digital and broadcast platforms and print platforms including but are not limited to: ad networks, email marketing, paid search listings, television, radio, newspapers, magazines and brochures, Facebook, Instagram, Twitter, Tumblr, YouTube, Pinterest, Vine, Google+ and website blogs for a period of twelve (12) months.
The Usage section of Rights governs where the brand can use influencer content and the length of that use. In this case, the brand wants to be able to use any content the influencer creates under Schedule A in just about any media channel. There is a 12-month time limit though, and after that if the brand continues using content from the influencer they could find themselves having to pay up. An influencer should carefully consider this portion of the contract and be aware that the brand does not have to inform the influencer when and where that content is being used.
Brands love to extend value for their creative work as far as it can go. Don’t be surprised if you see your face pop up in an unexpected place after engaging in a brand campaign!
C. License. Company grants to Influencer a temporary license to use the Brand Affiliates name and promotional materials as may be necessary to achieve the promotional purpose but only in compliance with the Guidelines and only to achieve the promotional purpose as described in the Schedule A. Influencer grants to Company a perpetual license to use Influencer’s name and likeness in all media including the Company website and the brand website and on social media sites and in all formats of print and digital media advertising.
What would an influencer campaign be if the influencer didn’t have the rights to use the brand name? It’s really the whole point of influencer marketing, so the above section outlines how the influencer may use the brand name and trademarks. Guidelines are provided in the attachments, which vary from brand to brand. It’s a two way street. The brand may also use your full name and image in their marketing materials too, and unless specified in Schedule A you typically won’t be compensated for these additional uses.
3. Date of Performance. Parties agree that the Content will be disseminated on Influencer’s Outlets on __________________ (“Date(s) of Performance”). This dissemination on the specified date(s) will constitute the date(s) of performance and upon performance of the promotion of the Content and fulfillment of the terms, and upon payment of compensation by Company as outlined below, this Agreement shall terminate and Influencer’s rights to use the brand name as described above shall terminate as well.
At least the next section is easy to understand. The influencer is assigned to make certain posts on certain days. Once the work is done and the influencer has been paid, the brand revokes any right to use their trademarks. Seems pretty simple, except an influencer may want a portfolio or sell sheet of examples to show new and prospective clients. Any additional or ongoing uses of the brand trademark should be added to maximize value for both parties. Did somebody mention getting paid to post?
How much should influencers get paid to post?
4. Compensation. As compensation for Influencer’s satisfactory performance, Company agrees to pay Influencer $___________. Influencer agrees that this payment shall be the sole and entire compensation received and no other compensation of any kind shall be due upon termination of the Agreement or thereafter. Payment shall be remitted Fifty Percent (50%) upon execution of this Agreement and Fifty Percent (50%) within Seven (7) Days of performance on the final specified date.
If you’re like most people you will probably skip to this section before going back to read the rest of the influencer contract. Getting paid is one of the most important aspects of influencer marketing. Once you make a post live, your value to the brand or agency goes down, and so will their motivation to pay you promptly. Not that brands and agencies are full of bad people, but they are often running enormous campaigns that keep their attention focused on the next opportunity rather than taking care of bookkeeping.
To protect both parties it is fair for the influencer to require 50% payment up front. This has become one of the few standards in influencer marketing, and should be adhered to. Influencers should be wary of any brand that refuses to pay up in part before a post is made. Once the assignment is complete and the influencer has posted all relevant content by the required deadline they are to be paid quickly. This area can be difficult for many larger brands that issue checks or payments at specific times. Influencers may have to be flexible to accommodate procurement policies. That said brands will always find ways to pay quickly if they want or value something.
Other things you should know before signing an influencer contract:
We’re almost there! The next section covers a variety of standard legalese but with some specifics for influencer marketing. I’ll try to hit the unique aspects of an influencer marketing contract and skip the legal boilerplate.
A. Representations and Warranties. Parties represent and warrant to each other that each is free to enter into this Agreement and that this engagement does not violate the terms of any agreement between any third party.
B. FTC Compliance. Influencer acknowledges and agrees that it is being engaged by Advertiser to operate one or more social media influencer campaigns on behalf of Advertiser using influencers activated by Company. Influencer acknowledges and agrees that influencers are required by law and by Company to clearly and conspicuously disclose all paid endorsements and/or testimonials contained in the content for each campaign governed by this Agreement or the Campaign SOW. Influencer acknowledges that any failure to adhere to the FTC regulations may result in liability for the Advertiser, and agrees that Influencer shall use its best efforts to comply with such FTC regulations. Influencer acknowledges that Company reserves the right to terminate this Agreement in the event Influencer seeks to have, or requests, Company or Advertiser to avoid or circumvent influencer’s obligations under FTC regulations.
The first section of Miscellaneous acts as a check to make sure you are legally allowed to sign the influencer contract. This usually won’t matter when you are starting out. Influencers that have worked with many brands and engaged in many contracts may review or modify this section. If an influencer currently works with a competitor brand then she may be barred by an agreement that predates a new opportunity in the same space. For example, she may represent a lipstick company and be working under an agreement that prohibits her from displaying a competitor lipstick on her profile for money.
The second section is relatively new to influencer marketing. The Federal Trade Commission (FTC) has released guidelines for social media influencers. These Endorsement Guidelines are meant to provide a gut check for influencers who are paid to advertise a product. They outline procedures and even rules to follow. Of course this represents a huge risk to brands, and the FTC will not go after an individual influencer. The FTC Compliance section of the influencer contract is designed to protect the brand by proving they warned all influencers to follow the rules. Be sure to check out our influencer resource center to download a copy of the FTC Endorsement Guidelines.
The rest of the influencer contract is standard legal speak, so we won’t analyze it here. There’s really nothing unique about this content as it pertains to influencers getting paid to post. If you want to download the entire agreement in a document form, head over to our influencer resource center. Once an influencer has a contract in hand, it’s time for next steps.
Identify points for negotiation
Every influencer contract is a relationship between two parties. And any successful relationship requires both groups to feel that their needs are being met. Brands often come out of the gate with more knowledge and experience, so they have the upper hand. Micro-influencers, or those with fewer than 50,000 followers, are especially new to the game of negotiation. I have identified points above that are good areas to offer terms modifications. You can suggest these updates on your own, but for particularly large contracts you may consider the help of a proper attorney. After all, these posts can only get you so far…
Here are some top areas that can be negotiated in an influencer contract:
Money. It’s the number one thing both sides are concerned with. Brands want to minimize it, influencers want to be paid generously. Somewhere in the middle lies the right number. Influencers may want to ask around and compare notes. Usually a brand is working with more than one influencer at a time, so try to find someone like you that is still negotiating and see what they have been offered. While it may seem uncouth, in the wild west of influencer marketing all is fair.
Rights. An influencer wants to retain rights to their identity, while a brand wants to be able to use that identity in any way they want. That may mean in other advertising campaigns or social media channels. Influencers can take a page from stock photography companies. Rights are typically sold to brands for specific use cases, and additional use costs additional money. Brands are used to working under these rules, so it should be a simple discussion. That doesn’t always mean a brand will be willing to pay!
Effort. Most brands want Instagram posts, stories, event attendance, and anything else they can dream up under one price. Influencers may want to be more nuanced about this approach, as a single brand campaign can be a drain on time and resources. For example, if event attendance is a requirement then who is paying for travel to and from that event? What specific activities must be performed at that event, and what must be done in follow up? Getting all the specifics outlined on an attachment is critical. Brands should hold influencers to producing everything on the list, and influencers should check brands that ask for more after signing. It’s a delicate dance, but both parties must be mindful.
Don’t overpromise or undercharge
It can be very exciting to get an initial brand opportunity. Read our interview with Waikei Tong (@waikeezy) and her first influencer deal to understand the feelings and pressure that come with that decision. Pricing is difficult in a time when Instagram influencers are getting paid boat loads of cash at the upper levels. When you are starting out, many brands will approach you with trade offers only. That may include product, trips, or other goods and services in exchange for a post. Influencers should not be afraid of those deals, but should also make sure they are not overpromising. One trip across town can take an entire day that could have been used for many other things.
Experiences are cool, but they don’t pay the electricity bills!
Make the decision that’s right for you
Nobody can tell you what’s right for you. Brands are often pressured by influencers to provide free product or valuable services in exchange for posts. Brand managers should look closely to make sure the influencer is right for their brand. They should also vet for anything that doesn’t feel right, like fake followers or fake likes. There’s no doubt that influencer marketing is beneficial to brands. As with any new technology or way of doing things, there are many people gaming the system.
Influencers should focus on representing products and services they truly believe in. If it isn’t a great product, don’t share it with your followers. In the end, shilling poor products and services will hurt your ability to make a successful career out of being a brand ambassador or social media influencer.