Introduction

Welcome to the Simplifying Legal podcast, brought to you by Businessese. I’m your host, Danielle Liss.

Many years ago, someone told me I was the least lawyer-y lawyer she’d ever met because I helped make legal easier to understand. To this day, it’s one of the best compliments I’ve received in my professional life.

If you’ve ever felt legal was too scary, too overwhelming, too complicated, or just plain incomprehensible, you’re not alone. The Simplifying Legal podcast was created to help. 

In each episode, we’ll do a deep dive into a legal topic and give you concrete next steps so you can apply it to your business. 

My goal is for you to walk away from each episode thinking, oh, that was easier than I thought it would be.

Let’s get started. 

Episode Content

Hey there, I’m Danielle. Welcome to episode 20 of Simplifying Legal for Small Business Owners. Today, we’re talking about sponsored content agreements. 

Disclaimer: As always, before we get into today’s topic, a quick disclaimer. This podcast is meant to provide you with legal information only. It’s not legal advice and does not create any type of attorney-client relationship between us. Please don’t take any action without consulting your lawyer first. 

Now, let’s get into the discussion of sponsored content agreements.  

For the past decade, I’ve worked in some capacity on the legal side of influencer marketing. The industry has changed so much and I’m so thrilled to see how many bloggers and influencers are now able to make this type of work their full-time job. Sponsored content can be a significant part of your revenue, so this episode will review some of the most important aspects of a sponsored content agreement. Of course, depending on what type of content you create, your agreements may vary from what I’m including in this discussion, but my goal is to cover the most common areas. 

Sponsored Content

But, before we talk about the agreements, what is sponsored content? For today’s purposes, I’m going to keep this definition as simple as possible. Sponsored content is when a company works with a blogger or influencers to promote their products or services on the influencer’s channels. Of course, the goal is to drive sales or interest of that product from the influencer’s audience. 

For many years, sponsored content was primarily in blog posts, but it has evolved so much. 

Now, sponsored content can come in a lot of different forms: blog posts, YouTube videos, TikToks, Instagram feed posts, Instagram stories and so much more. Basically, if an influencer has a particular audience, a brand may want to work with them to put their products in front of the influencer’s audience.

In many cases, the brand may hire an agency or influencer network to manage their sponsored content programs. Usually, the brand or the agency or network on the brand’s behalf will issue the agreement to the influencer. 

This often means that many influencers don’t need a contract of their own, but they do need to know the typical terms and how to negotiate them.  

Agreement Term

First, let’s talk about the term. 

The term of the agreement is when it is in full force and effect. In other words, when does the agreement start and when does it end. 

The end of the term can be really important in sponsored content agreements when there is an exclusivity provision. If the exclusivity provision states that it will be for the term plus a period of time after, it’s important that you know when the term ends so you can then calculate the end of the exclusivity period. 

Agreement Termination

Next, let’s talk about termination. 

The termination provision will determine if you can end the agreement prior to the planned end date. 

Can both parties terminate the agreement? If so, what happens to the compensation? Is the influencer paid pro rata for the work already completed?

When you consider termination, it’s also important to consider ownership of the content. If the agreement ends early, will the brand have any rights to content that hasn’t been completed or posted? This might include raw files or unedited video. Make sure your agreement is clear as to what happens to this type of content. 

Compensation Terms Upon Agreement

Next, let’s talk about compensation

Of course, knowing the payment terms will always be important. In sponsored content agreements, the structure of these clauses can depend on whether or not it is an ongoing campaign with multiple months or a single project. 

One of the most important aspects is the timing of the payment. If you require a deposit prior to starting work, this should be included. Otherwise, when do you get paid? Is it one payment that gets made after the completion of the project? Or is it paid ahead of time? 

If you need to send an invoice, make sure you know when to send it and what the timing is before you get paid. Some larger companies can take a long time. You might see requests for net 60 and net 90, which means they would have 60 or 90 days to pay you. You can try to negotiate these to see if you can cut down on some of the timing. 

For multi-month projects, the timing of the payments remains important. Are you paid at the end of each month? Is it based on certain milestones? Make sure you know when payments are due. 

Confidentiality Provisions

Next, let’s discuss confidentiality. 

Many sponsored content agreements will contain confidentiality provisions. As an influencer, it’s important to know what you can and cannot discuss. If your compensation is supposed to be confidential, make sure you respect this provision. Over the years, I’ve seen many influencers share compensation rates in Facebook groups. Don’t do this unless you know you are allowed. 

Intellectual Property and Content Ownership

Next, let’s talk about intellectual property and ownership of content.

Ownership is one of the most important pieces in most sponsored content agreements. It’s often the most heavily negotiated. As the creator of the content, you automatically have copyright rights. In order for the brand to use the content, you have to agree to the usage. 

There are three common terms you need to understand to be able to navigate these clauses. 

Work for Hire

First is work for hire. Under this type of clause, the brand would own the deliverables you create. 

Assignment of Rights

Next, is an assignment of rights. Under this type of provision, you assign the copyright rights to the brand. This may be done for final approved posted versions only. You may also consider holding the assignment until all payments are received. 

License to Brand and Ownership

And last is the license to the brand. If you retain ownership of the copyright, but you allow your client to use it in certain ways, you’re giving them a license. If you use this option, get specific about what the permitted uses are.

When it comes to sponsored content, most brands want to own the content that you create. However, as the content creator, you’ll typically want the opposite and you’ll want to keep as much control over the content as possible. 

Most often, I see either the brand taking ownership, or the influencer keeps the copyright, and licenses certain rights to the brand. 

The most frequent type of license I see is the right for the brand to use images on their digital channels. For example, the brand could post the influencer-created content on Instagram, but they wouldn’t be able to use it for a print ad. 

Ownership of content is often strongly tied to the influencer’s compensation rate. If a brand wants more rights to the content, the price will typically increase. 

I did a deep dive into content ownership in Episode 13, if you want to learn more. 

Deletion of Content

Next, let’s talk about deletion of content. 

For a few years, we didn’t talk a lot about deletion of content. But, when Instagram started to take center stage in a lot of campaigns, there were more and more questions about how long the content needs to stay on the influencer’s platforms. 

If you want the ability to delete the sponsored content or to republish the content without the sponsored aspects and brand mentions, make sure your agreement mentions this. 

For Instagram feed content, deletion after 30 days is fairly common. A year is more typical on blog posts. 

Intellectual Property

Next, let’s talk about the brand’s intellectual property. 

For the post, you typically have permission to use certain things from the brand, like their logo. Make sure you are clear on exactly what permissions you have so you aren’t violating their intellectual property rights.

Also, if you have a media kit where you list all of the brands you’ve worked with, make sure you have permission to include their logo. 

Sponsored Content Reporting

Next, is there any type of reporting required as part of the sponsored content? 

If a brand wants reporting, make sure you know what they expect to receive and when they expect it. Usually, this will include things like links and impressions. Before agreeing, make sure you have the capabilities to give them the reporting that they are requesting. 

And, if you don’t have a lot of experience with reporting, check out https://influencekit.com. They have some really cool tools to help you automate your reporting. 

Exclusivity within Sponsored Content Agreement

Next, let’s look at exclusivity. 

Like ownership of content, this is a really important piece of a sponsored content agreement. It’s often heavily negotiated and it’s closely tied to the influencer’s compensation. 

Many brands would prefer that you are not featuring their competitors when you are working on a sponsored campaign on their behalf. 

An exclusivity provision will govern what you can and can’t post for a certain period. Some will state that you can’t post about competitors for 2 weeks before the sponsored content goes live and then for 2 weeks after. 

Other exclusivity provisions will state that for the term of the agreement and three months after, you are restricted from posting certain types of content featuring competitors. 

When it comes to negotiating exclusivity, keep a couple of things in mind. First, make sure it is specific, and second, price in accordance with what is being requested. 

For specificity, you need to know exactly what you can and can’t promote. The brand should provide you with narrow categories of prohibited content or a list of brands that you can’t post. 

For example, let’s say you are a fitness blogger and you’re working with a popular ibuprofen brand for content related to general aches and pain. The agreement says you can’t discuss any other pain killers. Does this mean that you are only restricted from talking about oral medications? Does it include topical creams? Would it include talking about icing or foam rolling to reduce pain from a workout? If it’s not clear, ask the brand for clarification.

Like ownership of content, exclusivity is often related to the price of the services. If a brand wants a really broad restriction or they want the exclusivity period to last for a long time, then the price will typically be higher. 

Content Drafts and Approvals

Next, let’s talk about drafts and approvals. 

Often, a brand will want to see drafts of the content before it goes live. Make sure it is clear what the brand can and can’t edit. Often, for my clients, I advise them to include one round of edits for factual statements about the brand or the product. But don’t include edits to your voice or the way you’re telling the story. 

Additionally, if you don’t offer reshoots for images, make that very clear. Some influencers will offer reshoots only with payment of an additional fee. 

To ensure there are no requests for reshoots, make sure you know exactly what type of images the brand wants. If you shoot in a particular style, they are likely expecting that when they hire you. But, there are still areas of potential confusion. 

For example, if they are expecting brand representation in every image and you included it in one out of six images in a blog post, that might cause some conflict during the approval process. This is something you can easily list in the deliverables to make sure that everyone gets what they are expecting. 

One other area of frustration for some bloggers is the delays that can come along with the approval process. I’ve heard from too many bloggers that they’ll be scheduled to go live on a particular date and the brand hasn’t given them the approval. So should they go live or wait? 

To avoid this type of situation, build something into your agreement that gives you the ability to move the post date if you don’t have their approval back within a certain time frame prior to the time the post should go live. And make sure it is clear that you will collaborate with them to get another date set on your editorial calendar. Depending on exclusivity clauses, this can cause some issues if you have to move things around, so make sure you give yourself adequate wiggle room. 

Content Statement of Work and Specifics of Deliverables

One of the most important parts of your agreement is the statement of work or overview of what you will provide for the brand.

Get specific about what you’ll be creating. If it’s a video on your instagram feed and a blog post, list the details. What is expected for the video? Is it a short demonstration? What will be included in the blog post? Is there a certain them? How many images? 

Make sure that you are listing all of the deliverables. 

And, remember, the services are things you will do or will create. It shouldn’t include any guarantees about the results. While you are certainly the #1 expert on your audience, you can never guarantee how your audience will react. You can use best practices to try and anticipate performance, but I don’t recommend a promise that something will get 100,000 likes laid out in your agreement. 

Disclosure of Sponsored Content

Next, disclosure requirements.

If you’re new to sponsored content, you may not be aware that the Federal Trade Commission requires that you disclose this type of material relationship. The disclosure should be easily understood by the average person that the content has been sponsored. 

If you’re experienced with sponsored content, you’ve probably seen many iterations of what brands require and how it has changed over the years. I’ll be doing a future episode on FTC requirements, but I think it’s important to mention it here too since it comes up frequently in agreements. 

Many brands, agencies, and networks have very specific policies regarding disclosure, which they will attach to their agreements. This is important, so make sure you review their requirements carefully and follow them when you post. 

Legal Provisions 

And, last, don’t forget to add the standard legal provisions to your client agreement, like indemnity, limitations of liability, assignment, etc. If you want to know more about the boilerplate clauses, check out Episode 15. 

This wraps up the overview of some of the most important parts of a sponsored content agreement.  

Action Steps

Now let’s talk about today’s action steps: 

1. First, if you have a sponsored content agreement that you regularly use, are you missing any of the key terms? If so, consider making updates. 
2. Next, if you received an agreement from a brand, make sure you carefully review the clauses so you know what you’re agreeing to. It should match your talks with the brand. Remember: don’t be afraid to ask for changes if you don’t agree with something. The worst thing that can happen is they say no. 
3. Next, have you had any past issues with brands you’ve worked with? This could be payment issues or a dispute regarding usage of the content you created. If you have, consider whether you can adjust your agreement to prevent the same issues from coming up in a future agreement. 
4. Next, if you need to negotiate the terms of an agreement provided by a brand, consider using a sponsored content agreement template to provide you with examples of alternative clauses. One of the most popular products in the businessese store is the sponsored content agreement template. I’ll link to it in the show notes. 
5. Next, if you enter agreements with exclusivity provisions, make sure you track the duration and scope. A few bloggers I work with have a spreadsheet and they calendar the key dates. 
6. And, last, as always, if you are not sure if you have everything you need for your group program agreement, please reach out to a lawyer. I regularly review these types of agreements for bloggers through my firm Liss Legal. If you’d like more information, check out lisslegal.com. 

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