Influencer contracts are a vital component of the entire brand-influencer collaboration process. Not only do they help to ensure a successful and mutually beneficial collaboration between influencers and businesses, but also protect each party throughout the process. Contracts also enable both parties to fully comprehend and agree to the terms of their partnership and allow them to hash out any details upfront to avoid misunderstandings further down the road.
So, just what is an influencer contract? Typically, they are legally binding contracts between influencers and businesses that outline the terms and conditions of their collaboration. Important details covered are the scope of work, payment amounts and terms, and other vital components that relate to the partnership.
Contract negotiations are an important step and can help to boost the overall compensation and benefits received by the influence, helping to further ensure that the partnership is fair and equitable. Hashing out and carefully negotiating contractual terms can help influencers get better payment terms, assume creative control, and open up opportunities for further growth in their influencer careers.
The negotiation phase is not one to be ignored, as this critical step can greatly impact the overall success of not only the partnership but the campaign too.
Understanding the Contract Terms
To properly grasp the terms of an influencer contract, you should first familiarize yourself with key legal terms and definitions. These may include concepts such as:
Compensation refers to any payment or financial compensation that an influencer receives in exchange for their services or partnership with a brand. Influencer contracts will feature a compensation term which usually stipulates the amount that the influencer will be paid, the formatting of payment (e.g. lump sum, monthly installments, commission, etc.), and, if applicable, any extra commission or bonuses that could be earned. Also specified may be if payment terms differ for various types of content or services the influencer provides.
Influencers should fully understand the compensation terms in their contract including how payment will be calculated when payments are processed, as well as other payment details that need elaborating.Exclusivity is a provision in a contract that restricts one party from working with other companies or brands in a specific area or for a specific period of time. Influencer contract exclusivity clauses may specify, for example, that an influencer is prohibited from promoting or featuring competing products or brands during the partnership.
Exclusivity clauses can greatly impact an influencer's ability to work with other companies. For example, if the influencer is expected to maintain exclusive relationships with a specific brand, they may be limiting or cutting off entirely their ability to work with other brands within the same industry.
Termination refers to the process of ending a contract before it reaches its full term. In an influencer contract, the termination clause outlines the conditions under which the agreement may be terminated by either party – in other words, it can be initiated by both the influencer and the brand. Termination clauses may specify the notice period required for termination, any consequences of termination, and any other related terms.
Influencers should take great care to understand termination clauses and the details therein, including the notice period required for termination and any consequences that may arise as a result. Knowing how to negotiate termination clauses will also help to ensure that the rights and interests of both parties are taken care of in the event of premature termination.
Renewal refers to the process of extending a contract beyond its original term. In an influencer contract, the renewal clause goes over the Ts and Cs under which the agreement may either be extended or renewed. Some conditions may include an automatic roll-over renewal, an option for agreement renewal, or other similar terms.
For both influencers and brands, negotiating the renewal clause can help to ensure that both parties have the option to continue the partnership if desired, and can help to provide and secure future work and collaboration opportunities. It also opens up the ability to maintain a working relationship between businesses and creators.
Preparation for Negotiations
As with most facets of influencer-brand relationships, it’s crucial to review and familiarize oneself with industry standards and best practices before discussing and drawing up a contract. In seeking how to negotiate an influencer contract, both parties could review industry reports and data, engage closely with other well-versed influencers and industry experts, or conduct a thorough analysis of comparable agreements. Improving your knowledge of industry standards will help you better evaluate the terms of your contract as well as closely identify areas where better terms could be negotiated.
When approaching influencers, especially those that are experienced in the field, they should already have a good idea of what your first questions will be – so be sure to check their profiles for a Linktree or AllMyLinks option to access their media kit or website. Even micro- and nano-influencers understand the value of having this information readily available, so be on the lookout to avoid redundant questioning. These media kits and rate cards should typically include flat rates for certain campaign types, package rates for multi-content campaigns, and their follower demographics and engagement metrics. They may also provide you with a bit of insight into their industry and creative experience, as well as their style, voice, and overall values. This information can be compared against your brand’s objectives, target audience, and budget – as well as see if it’s a good match for the specific campaign you would like to run. If all else fails and you cannot find this information, check to see if they have a talent agency or manager that you can make contact with.
Understanding what influencers are seeking in the negotiation process, as well as their priorities, will also help you get a clearer understanding of the conversation to be had. They will typically have specific goals and priorities in mind, including their ideal compensation, the degree of creative control or preferred content format, their rights and boundaries, as well as the growth they wish to achieve, and the opportunities they would like to chase. It’s important to keep this in mind and try to be aligned so that when you negotiate with an influencer, it can be productive and well thought out.
In negotiations, leverage refers to the bargaining power or influence that a party has over the outcome of the negotiation. An influencer’s leverage could lie in a number of areas, including their audience size, engagement rates, and brand recognition. As a brand, depending on your notoriety or popularity, there may also be inherent leverage. Identifying your leverage points, as well as those of the influencers you work with, is key for negotiating better terms and conditions in your contract.
How to Negotiate with Different Types of Influencers
Negotiating with influencers can be a complex process, especially when working with different types of influencers. Each type of influencer – micro-influencer, macro-influencer, celebrity influencer, niche influencer, and influencer collective – presents its own unique set of opportunities and challenges when it comes to contract negotiations. To get the best results and outcomes for your brand in the negotiation stage, it’s best to understand the quirks and complications of each type.
Negotiating with Micro-Influencers
Micro-influencers refer to those influencers with a relatively smaller follower base, usually around 10,000 to 100,000 people. Their benefit lies in the fact that while they may not present the same level of popularity or reach as their larger counterparts, they are often highly engaged with their followers and have a dedicated following. When negotiating with micro-influencers, you should pay particular attention to the personal connection they have with their audience and how it can be capitalized on to generate good results for your brand. For example, you may want to include incentives such as exclusive access to products or events, or simply emphasize the impact they can have on your brand's bottom line.
Negotiating with Macro-Influencers
Macro-influencers, on the other hand, are those influencers with a larger following, usually around 100,000 to 1 million followers. Negotiations with macro-influencers should focus on their reach and their ability to drive traffic and conversions. This might translate into negotiating payment terms based on their audience size and the positive ROI they could bring about for your brand. Aside from this, you shouldn’t neglect to look into their level of engagement and their strengths (or weaknesses) at connecting with their followers, as well as their overall voice and messaging and how that aligns with your brand values.
Negotiating with Celebrity Influencers
Celebrity influencers are high-profile individuals with significant followings on social media. During your negotiations with celebrities, you should consider their reputation, their level of engagement, and the overall impact they could have on your business. Naturally, celebrity influencers tend to command much higher fees than other influencer categories, so it’s vital that you carefully consider ROI and negotiate the terms of payment so that it remains fair and equal for both parties involved. Due to their prolific nature, you should also closely assess the impact that a celebrity’s association with your brand may have on both your reputation as well as theirs.
Negotiating with Niche Influencers
A more fringe variety of creator, niche influencers are those who focus on a specific topic or field of interest such as fashion, beauty, or technology. When negotiating with these creators, you should take into account their level of expertise and their ability to meaningfully connect with followers in their field. Niche influencers often attract lower fees than other types of influencers, but can offer a highly targeted and engaged audience.
Negotiating with Influencer Collectives
Influencer collectives are groups of influencers who collaborate to create content and drive results for their brands. As with other influencer categories, you should consider the collective’s overall reach and the level of engagement they can offer, as this will impact the negotiation process. Since a collective involves multiple creators, you should also consider the level of control you can have over the content they create, as well as monitor each influencer well beforehand to ensure that their association with your brand will be viewed favorably.
Overall, when determining how to negotiate a deal with online influencers, you need to take into account the various categories you may encounter and tailor your approach accordingly. In this way, you can weigh up their unique strengths, weaknesses, and other quirks to make the best decision for your brand and have a successful negotiation process.
Negotiation Strategies
Collaborative vs. Competitive approaches
Negotiations can take two different approaches: a collaborative approach or a competitive approach.
A collaborative approach to negotiations occurs when both parties actively collaborate and work together to find solutions that are most mutually beneficial. As such, both parties are encouraged to be open and honest in their communications in order to come to a compromise or middle-ground that can be mutually accepted in the form of a formal agreement. These types of negotiations are seen as the most effective in building strong, lasting working relationships, as both parties feel that their needs have been prioritized and acknowledged throughout the process.
Alternatively, a competitive approach to negotiations involves both parties competing for the best deal or outcome, often with a focus on winning or gaining the upper hand. This approach often involves both sides taking a firm stance, engaging in some degree of bargaining or compromise, and generally acting in a more adversarial manner to achieve what they want out of the negotiation. This type of negotiation style can be effective when time is short, resources are scarce, and a fast resolution is needed to get the ball rolling.
Utilizing different negotiation techniques
There is a range of strategies that can be used during negotiations to get closer to achieving your goals. Some of these strategies include:
Active Listening: This involves paying close attention to the other party's perspective and needs, trying to gain a better understanding of their perspective. By actively listening, you can help secure their trust and push for open communication, as well as deeply understand the other party’s desires and needs for the collaboration.
Trade-Offs: This is the practice of giving up something of value in exchange for something of equal or greater value. For example, you might be okay with granting a greater degree of creative freedom or additional opportunities for growth, in exchange for a lower overall compensation package. Trade-offs can help you find mutually beneficial solutions that keep both parties happy, while ultimately fulfilling their most pressing needs.
Alternative Options: In negotiations, you should always have alternative options at your disposal in case the current negotiations do not lead to a mutually acceptable agreement. This might entail having alternative influencers on the backburner who may be ready or willing to work with you, or some other form of backup plan in case the negotiations fail. By having alternative options available, you can maintain your bargaining power and increase your chances of success.
Win-Win Approach: A win-win approach to negotiations involves finding solutions that meet the needs and interests of both parties. This approach is far more conducive to building and maintaining healthy, strong relationships between brands and influencers, as both parties feel seen and considered, and their overall well-being is viewed as important in the eyes of the other party. By taking a win-win approach, you can ensure that both parties come away from the negotiations satisfied with the outcome.
Power and Influence: Using power and influence refers to the ability to impact the outcome of negotiations by using different sources of authority, such as expertise, reputation, or control over resources. For example, in the negotiation process, an influencer could exert this by demonstrating a strong proven track record in their field or leveraging their reputation.
Handling Objections and Overcoming Obstacles
Managing speedbumps is an important skill to learn regardless of how they may arise. Some tips for this include:
Listen actively: Take time to listen to and process the other party’s concerns before responding. By displaying the will and ability to understand their position, you can help deepen the trust and loyalty between you and increase your odds of finding a solution that benefits you both.
Be flexible: Compromise doesn’t have to be a bad thing! By showing your willingness to be flexible, you may inspire the same behavior from the other side and get one step closer to finding a reasonable solution.
Stay calm: It can be difficult to remain calm and collected in the face of adversity, but doing so shows resolve and a professional attitude that the other party will always appreciate. Keeping tensions low can help you engage in positive negotiations and increase your chances of success.
Find common ground: Finding a middle ground where you can both agree creates a basis for cooperation and will boost your odds of finding appropriate outcomes.
Seek creative solutions: When all else fails, think outside the box. By seeking out alternative or lesser-thought-of solutions, you might be able to stumble upon something you previously missed and find a good solution for your negotiation process.
Keep the conversation focused on the issue at hand: Try not to get too distracted or sidetracked; rather keep the conversation on-topic to avoid wasting time and help work towards a resolution.
Use Emotional Intelligence: EQ refers to the ability to understand and control your own emotions, as well as interpret the emotions of others. This is a highly important aspect in addition to the regular IQ that is spoken of, as understanding emotional highs that can occur during tense negotiations is important for diffusing and directing the conversation. In doing so, you can boost your odds of reaching a mutually beneficial outcome.
Use persuasive language and storytelling: This approach can help you to better communicate your ideas and perspectives in a clear and compelling way. With practice and confidence, this type of language can help inspire trust and support in you from the other party, and they may be more inclined to listen to your perspective if you can captivate their interest and convince them. Naturally, this can lead to a successful end to your negotiations.
Common Points to Negotiate
There are five primary discussion points in the negotiation process:
Payment terms
Duration and renewals
Creative control and brand representation
Performance metrics and reporting
Termination and cancellation clauses
Payment Terms
An influencer contract will typically have a section that outlines how much the influencer will be paid for their work, how payment will be made (lump sum, monthly payments, etc.), and any additional bonuses or incentives that may be included. This might also include details for differences in payment or compensation depending on the type of content the influencer creates.
Payment terms are some of the most important details to negotiate as they can have a significant impact on the success of the collaboration. A few common payment terms to discuss include:
Amount of compensation: The total monetary amount that the influencer will receive for their services.
Payment schedule: When payments will be made, such as a lump sum payment, or a series of payments spread out over a number of weeks or months.
Method of payment: The manner in which payment will be transmitted, such as a direct bank deposit, or payment through a third-party platform such as PayPal or Payoneer.
Brands should know how to negotiate influencer rates and ensure that their terms are understood clearly by influencers to avoid any misunderstandings or confusion down the line.
Duration and Renewals
This refers to the length of the agreement and the terms for extending or renewing the agreement. It’s important to thoroughly establish these terms as they can have a significant impact on the stability and longevity of the relationship between the influencer and the brand. A few common terms to negotiate include:
Length of the agreement: How long the initial collaboration agreement will be in effect, such as a one-time collaboration or a long-term partnership.
Renewal terms: How the agreement could be renewed, such as automatic rollover, or the requirement for a new agreement to be signed.
Creative Control and Brand Representation
These two factors involve the level of control that the influencer has over the sponsored content they produce and the overall manner in which they will represent the brand. These factors can have a major impact on the success of the relationship between the influencer and the brand as they necessitate trust and solid communication abilities. A few common discussion points include:
Degree of creative control: This refers to the amount of flexibility and freedom the influencer has to create content that fits their personal style. Many agreements include some form of specific guidelines from the brand’s side.
Brand representation: The manner in which the influencer showcases or features the brand, such as using campaign-specific hashtags or promoting certain products in the brand’s lineup.
Exclusivity
This refers to the restriction that the influencer may have on working with other brands or promoting competing products. Exclusivity can be a point of contention in negotiations due to the conflicting nature of both parties’ interests.
Both perspectives are important and valid; from the brand's perspective, exclusivity helps to ensure that the influencer is fully committed to the relationship and that their audience will see the brand as their primary focus. From the influencer's perspective, exclusivity can limit their earning potential and restrict their ability to collaborate with other brands.
There are a few different types of exclusivity that may be included in a contract:
Full exclusivity: The influencer is restricted from working with other brands or promoting competing products for the duration of the agreement.
Category exclusivity: The influencer is restricted from working with other brands or promoting competing products within a specific category, such as beauty or fashion.
Geographical exclusivity: The influencer is restricted from working with other brands or promoting competing products within a specific geographical region, such as a specific country or city.
Exclusivity agreements need to take into consideration the length of the overall collaboration, the terms of renewal, and the payment or alternative compensation being offered. It’s also important not to take lightly what the impacts of exclusivity may be on the influencer, and to ensure that the terms are fair and reasonable to them and their earning potential. Ultimately, the inclusion of exclusivity terms will come down to the needs and goals of the brand – they may not always be required depending on the scale and type of campaign being run.
Performance Metrics and Reporting
This refers to the metrics that will be used to measure and ultimately determine the success of the campaign as well as the reporting requirements for both parties. These factors are important topics for negotiation as they can help to ensure that both the influencer and the brand are held to account.
Performance metrics: To assess the overall success of the collaboration, trackable metrics such as engagement rates, reach, or conversions may be used, depending on the campaign goals.
Reporting requirements: This may include either regular reports or real-time access to performance data.
Termination and Cancellation Clauses
This refers to the conditions under which the agreement can be prematurely ended. Termination and cancellation clauses can help to ensure that both parties are protected, for example in the event of a breach that may necessitate termination or cancellation.
Termination conditions: Reasons for which the collaboration can be terminated, such as breach of contract or failure to meet performance metrics.
Cancellation conditions: The conditions under which the agreement can be canceled, such as a change in the influencer's personal circumstances or a change in the brand's strategy or approach.
Conclusion
Negotiating an influencer contract can sound like an overwhelming process, but regardless, it forms an essential part of the influencer marketing campaign. The preparation of an airtight contract and a thorough negotiation process beforehand will help to ensure the collaboration runs smoothly, eliminating doubts upfront and keeping expectations at the appropriate level. Of course, negotiating skills can be tough to learn, as not everyone understands say, the power of persuasion or how to negotiate influencer pay right off the bat. Therefore, you should prepare and understand industry standards and practices before engaging in such processes to ensure that your negotiations are both in your and the other party’s best interests, and remain equal and fair.
With the right mindset, a healthy collaboration process that prioritizes transparency and open communication can help foster a great relationship with the influencers you work with. They may view your approach positively if you work with them collaboratively, thus earning their trust and loyalty. Doing so can only aid you in the long run as you continue to run more influencer marketing campaigns, as this kind of relationship boosts your chances of success in all manners of collaboration.
