Collaborating with brands is a great way to earn income as a content creator. Collaborations can take many forms, such as a limited edition makeup palette in partnership with a makeup brand, a brand ambassadorship with a fashion company, or even a social media takeover.[1]Many of these opportunities come with standard influencer collaboration agreements that state the contractual terms of the relationship between the brand and the content creator. Many of these terms exist in standard sponsorship agreements with celebrities, but there are also particular things to consider when entering into an influencer agreement as a content creator. In order to best protect your interests as a content creator, here are tips regarding the ten most important terms to consider when negotiating an influencer collaboration agreement:
- Define All Aspects of the Deliverables
In an influencer collaboration agreement, deliverables refer to the goods or products that the content creator and/or brand must deliver under the contract.[2]Depending on the purpose of the contract, the deliverables can refer to social media posts, tangible products, or public appearances. As a result, a content creator must be aware of the scope and extent of his or her deliverables under the contract. In order to do this, make sure to address and negotiate questions about the deliverables terms, such as: In what form are the deliverables? How often must I communicate the deliverables publicly? How much freedom do I have to choose how I may endorse the good? Are public appearances involved?
Relatedly, a good influencer agreement must address which party retains creative control over the final product. Creative control refers to the authority to decide what the final product looks like.[3]Many brands require content creators to seek approval of the final product so that the brand can control the outcome.[4]But as a content creator, this can many times hinder your creative freedom. Consequently, make sure to negotiate creative control over the deliverables. It will allow you to express your creativity over your content and control your image.
- Compensation as a Percentage, Not a Lump Sum
The compensation structure is arguably the most significant part of an influencer collaboration agreement. Compensation comes in many forms—fixed fees, royalties, free products, incentives, and others—so a content creator must be sure that the terms are well-defined in the contract. For purposes of a collaboration agreement, it is best to receive compensation as a percentage of profits, not a lump sum. A harsh example of this is when YouTube beauty guru NikkieTutorials signed an influencer collaboration agreement with the international makeup brand TooFaced.[5]Under the contract, TooFaced created a limited edition eyeshadow palette with NikkieTutorials, who created and named the shades.[6]Regarding compensation, NikkieTutorials signed a contract wherein she agreed to a lump sum of $50,000 for her role in the creation of the palette.[7]However, it later came out that TooFaced made over $10 million from palette sales.[8]NikkieTutorials received none of those profits.[9]Many people criticized TooFaced’s shady contract, saying that they scammed NikkieTutorials and took advantage of her influence. TooFaced likely knew that NikkieTutorial’s palette would sell big, but it did not want to share the profits. NikkieTutorials later came out and said that she was naïve to sign such a contract, but that she didn’t know any better.[10]
Consequently, this is a cautionary tale for content creators. If a brand is willing to collaborate with you, it likely believes that you have a high level of influence on consumers. As a result, do not allow that influence to be taken advantage of and make sure to receive compensation for a collaboration as a percentage of profits, not a lump sum.
- Sometimes It’s Not a Bad Idea to Start with a Shorter Contractual Term
The term of the influencer collaboration agreement refers to the duration of the deal. You must make sure that the term is defined and does not conflict with any other projects that you are doing. But even further, you should also consider pursuing a shorter contractual term if you are just starting out. Of course, a long contractual term provides stability and financial security, but it can also become a prison for a content creator if the contract is not well-negotiated. Consequently, newer content creators who have less negotiating power should consider starting with a shorter contractual term to protect themselves from bad contracts. And if it goes well, you can always renew!
- Balance Category Exclusivity with the Contractual Term
Category exclusivity refers to the scope of the collaboration agreement.[11]Many times, a brand wants to ensure that a celebrity is not endorsing any other goods in the same category as the brand.[12]For example, if the brand sells alcoholic beverages, it would want to ensure that the celebrity does not have any other collaboration contracts with alcoholic beverage companies. Usually, this is a pretty standard term in collaboration agreements, and it is one that is hard to negotiate for the content creator. It makes sense that brands do not want their relationship with you to be diluted by other similar companies. But it also cripples you if you want to explore other opportunities in a similar field. Consequently, you can balance these competing interests by negotiating for a shorter contractual term if you are bothered by the category exclusivity provision. This allows you to appease the brand, but also prevent yourself from being pigeonholed for too long.
- Protect Your IP at All Costs
Intellectual property rights refer to a party’s right to use a content creator’s name, picture, likeness, logo, artistic work, etc. In the context of standard celebrity contracts, celebrities will usually retain these rights and will grant licenses to the brand.[13]However, since content creators are not always viewed in the same light as celebrities, they are not always given the same courtesy regarding any intellectual property that they have. Consequently, it is vital to negotiate that the rights over the use of your name, likeness, logo, and other works should remain with you. And when you grant a license to a brand, you, as a content creator, should be aware of the nature of the license that you grant to the brand, such as its exclusivity, revocability, and duration. Even further, you should also address who, if anyone, may use your name, likeness, and artistic works after the contract ends.
- Get Indemnified
Indemnification refers to one party’s protection from liability from the bad actions or inactions of the other party.[14]Although indemnification is common in standard business contracts, it is sometimes left off in influencer collaboration agreements. However, indemnification is very important for content creators! For example, in case the brand is sued for misrepresenting or falsely advertising its products, you, as a content creator, to make sure you will also not be liable for the brand’s bad acts. An indemnification clause would prevent against such a situation, so it is something that you should address and negotiate in an influencer collaboration agreement.
- Brands Should Cover Promotional Expenses
Promotional expenses are the peripheral expenses that result from carrying out an influencer collaboration agreement.[15]These include the costs of advertisements, banners, prizes, or giveaways related to the collaboration. Usually, the brand will handle the expenses in this category, but you must be sure that the contract clearly states that you are not stuck with any of these costs. Not only do brands have the funds to cover these expenses, they also have the expertise and resources to carry out the promotions that relate to the collaboration.
- Narrow the Language about Breaches as Much as Possible
Breach provisions enumerate when a party violates the endorsement contract.[16]You must look over these provisions to make sure that you do not end up in breach. Often, these provisions include a morality clause, which states that a content creator is in breach of the contract if he or she engages in “immoral behavior.” You must make sure that this clause is drafted narrowly, as content creators are often unfairly scrutinized more heavily than laypeople about their behavior. And given that your presence is exclusively on social media, issues that arise from scrutiny from your audience or the Internet is even more salient.
- Beware of Non-Competes
A non-compete clause prevents a content creator from endorsing similar goods for a period of time after the influencer collaboration agreement ends.[17]A brand may want to broadly restrict a content creator from endorsing similar goods for a long period of time after the contract ends, so you should make sure to watch out for any language that would do so and try to negotiate for a narrower non-compete clause to keep themselves open to other opportunities.
- Don’t Be Afraid to Negotiate
Finally, don’t be afraid to negotiate! Content creators often feel that they do not have the legitimacy that other celebrities do, but this is definitely not the case. Our society is shifting rapidly towards social media, so social media-based creators are becoming increasingly influential over consumers. As a matter of fact, celebrities that are not transitioning to social media are arguably becoming stale and irrelevant. Consequently, don’t feel like you don’t have a stake in the game. Brands want to work with you for a reason. You have influence. Use that to your advantage to negotiate for terms that are important to you.
[1]See, e.g., Jacquelyn, 10 Ways Fashion Brands Can Work with Influencers, Scrunch, https://www.scrunch.com/blog/11-ways-fashion-brands-can-work-with-influencers (last visited Nov. 20, 2019).
[2]Kevin Cornell, Brand Sponsorship & Endorsement Agreements for Artists, TuneCore (June 25, 2018), https://www.tunecore.com/blog/2018/06/brand-sponsorship-endorsement-agreements-for-artists-part-1.html.
[3]John Spacey, 5 Examples of Creative Control, Simplicable (Mar. 13, 2017), https://simplicable.com/new/creative-control.
[4]Influencer Agreements: Everything You Need to Know, MediaKix, https://mediakix.com/blog/crafting-the-perfect-influencer-agreement/ (last visited Nov. 20, 2019).
[5]Kat Tenbarge, Makeup Youtuber Nikkie Tutorials Explained Why She Took a Deal for Only $50K for Her Too Faced Collaboration After Jeffree Star Said She Took ‘Dirt,’ INSIDER (Oct. 6, 2019, 10:50 AM), https://www.insider.com/nikkie-tutorials-50k-too-faced-contract-palette-dawson-jeffree-star-2019-10.
[6]Id.
[7]Id.
[8]Id.
[9]Id.
[10]Id.
[11]Anthony R. Caruso, Five Cautionary Steps When Signing an Endorsement Deal, Scarinci Hollenbeck (Apr. 11, 2017), https://scarincihollenbeck.com/law-firm-insights/entertainment-and-sports/signing-an-endorsement-deal/.
[12]Id.
[13]Cornell, supra note 2.
[14]Caruso, supra note 11.
[15]See Cornell, supra note 2.
[16]See Caruso, supra note 11.
[17]Cornell, supra note 2.
Legal Dos and Don'ts for Social Media Influencers 