How Should Your Brand Structure Influencer Deals?

In the 21st century marketing world, the immense power of influencer marketing has become nearly impossible to ignore, especially if your brand is focused on growth. (And really, who isn’t?) Consider this: Annual spending on influencer marketing has topped $26 billion in the United States, and it’s nearing $35 billion worldwide. That’s “billion” with a big ol’ B. And of course, that’s *a lot* of cash. 

The reason behind so many brands’ big investment in the strategy is pretty clear, too — the ROI for influencer marketing has swelled to $5.78 for every dollar marketers spend on it, with some brands seeing an ROI that’s closer to $20. And even beyond all of this, the list of compelling stats about influencer marketing goes on…

All of the impressive figures noted above highlight the powerful impact influencers can have on brand visibility and consumer engagement, along with a long list of other benefits that influencer marketing can deliver. However, finding brand success with influencer campaigns isn’t always easy. And one of the biggest potential hurdles to success brands can face comes well before the campaign ever even kicks off: the initial influencer deal.

4 Key Elements of a Well-Structured Influencer Marketing Deal

At the heart of any successful influencer collaboration is a robust and detailed mutual understanding. And in support of this, a clear contract can not only help in setting precise expectations, but it also safeguards both parties’ interests. It helps ensure that influencer partners understand your brand’s goals and deliverables, while also outlining compensation, usage rights and timelines. And without a solid contract, your brand risks misunderstandings, unmet expectations and potential legal issues that can derail your influencer marketing campaign.

Is your brand wondering how to structure influencer deals, what should be included in an influencer package, etc.? If so, you’ve come to the right place. To help your brand clear the potential stumbling block to success that the failure to craft a solid influencer marketing deal can pose, in this article, we’ll dive into four key aspects you’ll want to be sure to include in all of your brand’s influencer marketing deals:

1.    Setting clear objectives: In the arena of influencer marketing, setting clear objectives is not just a good practice — it’s a necessity. Well-defined goals provide a road map for both your brand and the influencers you partner with, helping ensure that everyone is aligned and working toward the same outcomes.

To support this, you’ll want to be sure that your brand and its influencers share a clear understanding about the leading goals of your influencer marketing campaign, which can often include:

– Brand awareness — Brand awareness is often a primary goal for influencer campaigns, especially those promoting new products or for brands entering a new market. Campaigns with this objective typically seek to reach as many potential customers as possible and make them aware of the brand or product being promoted.

Key metrics to follow here include:
– Impressions: The number of times the content is displayed
– Reach: The number of unique users who saw the content
– Brand mentions: Frequency of the brand being mentioned across social media and other platforms
– Follower growth: Increase in followers on your brand’s social media accounts
– Website traffic: Increase in visits to your website from the influencer’s audience

– Engagement — Engagement goes beyond mere visibility — it’s about interacting with your audience. High engagement indicates that your content is resonating with viewers, prompting them to like, comment, share or save the post.

Key metrics to follow here include:
– Likes, comments, shares, saves — any direct interactions with the content
– Engagement rate: (Total engagements / Total followers) x 100 to assess content impact

– Lead generation — If your goal is to capture potential customers who may convert into paying clients, focus on lead generation. This could involve driving traffic to a landing page where users can sign up for a newsletter, download a resource or enter a contest.

Key metrics to follow here include:
– Click-through rate (CTR): Percentage of users who click on the link provided by the influencer
– Conversion rate: Percentage of users who take the desired action (sign-up, download, etc.) after clicking the link
– Number of leads: Total count of new leads generated from the campaign

– Sales — Ultimately, many influencer campaigns aim to drive sales. This objective is particularly relevant for e-commerce brands looking to boost their revenue through direct influencer partnerships.

Key metrics to follow here include:
– Sales volume: Total number of products sold through influencer-driven traffic
– Revenue: Total income generated from sales attributed to the influencer
– ROI: (Revenue generated – Cost of campaign) / Cost of campaign

By clearly defining your campaign goals and identifying the right metrics for measuring success, you can create a focused and effective influencer marketing strategy, then optimize it as needed to achieve your objectives. Such alignment on objectives not only helps in evaluating the campaign’s performance but can also help you strengthen your partnership with the influencer, as both parties have a transparent understanding of the expectations and desired outcomes.

2.    Gifting vs. paid opportunities: When structuring deals with influencers, one of the critical decisions your brand will face is whether to offer gifting or paid opportunities. Each approach has its unique advantages and challenges, and the best choice often depends on your campaign goals, budget and the influencer’s expectations. Here’s an in-depth look at both options to help you make an informed decision.

Gifting
Gifting, also known as product seeding, involves sending free products to influencers in exchange for content creation. This content can range from social media posts and stories to blog reviews or unboxing videos. Gifting can be more budget-friendly than paid collaborations, making it an attractive option for smaller brands or those with limited marketing budgets. By allowing influencers to experience and showcase your product authentically, gifting often leads to genuine endorsements. Moreover, it serves as an excellent way to start building relationships with influencers, potentially leading to more formal partnerships in the future.

“In our experience, gifting/product seeding is a great option for brands that are not wanting to spend a ton of money on influencer marketing and/or have a high-price-point item that is enticing enough for the influencer to receive as payment,” said Taylor Gills, Campaign Lead at Joybyte.

However, gifting has its downsides. Influencers are not always obligated to post about the gifted products, leading to uncertain outcomes. Brands also have less control over the content and messaging in gifting scenarios, leading to the creation and sharing of content may not always align perfectly with the brand’s voice. Additionally, influencers who accept gifting may have smaller audiences compared to those who require payment, potentially limiting the reach and impact of the campaign.

Paid opportunities
Paid opportunities come in various forms, including flat fee, commission-based and performance-based collaborations. In a flat-fee arrangement, influencers are paid a fixed amount for creating and sharing content, covering either a single post or an entire campaign. Commission-based deals involve influencers earning a commission based on the sales generated from their content, often tracked through unique discount codes or affiliate links. Performance-based payments are tied to specific metrics such as engagement rates, clicks or conversions.

“With paid influencers, you can manage the outcome and quality of the content much more since there is an expectation that the influencer will not get paid until the content is approved,” continues Gills. “This is also recommended for brands that have a low price-point item, like consumer packaged goods, that may not be compelling enough for an influencer to take on without further payment.”

Determining fair compensation for paid opportunities involves several factors. Larger followings and higher engagement rates typically command higher fees. Influencers who produce high-quality, professional content may also charge more for their work. Additionally, influencers with expertise in specific niches, especially those aligned with your brand, can demand higher compensation due to their specialized audience. It’s important to research average rates within your industry and geographic location to ensure your offers are competitive.

Choosing the right approach
Choosing between gifting and paid opportunities depends on several factors. If your primary aim is broad product exposure and building brand awareness, gifting might be sufficient. However, if you’re looking for high-quality content creation or guaranteed deliverables, paid opportunities may be more appropriate. Budget constraints play a significant role in this decision. Gifting can be a more feasible option for brands with limited funds, while paid collaborations might be necessary for larger-scale campaigns.

Influencer expectations must also be considered. Influencers with substantial followings and professional content may expect monetary compensation. 

Conversely, micro-influencers or those new to the scene may be more receptive to gifting. Desired control and outcomes are another important consideration. Paid opportunities typically allow for greater control over the content and ensure that specific deliverables are met. Gifting, while less predictable, can still yield valuable content, especially when working with influencers who genuinely love your products.

Finally, consider your long-term influencer marketing strategy. Building relationships through gifting can pave the way for future paid collaborations as your brand grows. By weighing these factors, you can determine the best approach to structuring deals with influencers that align with your campaign goals and resources. Whether opting for gifting or paid opportunities, clear communication and mutual respect are essential for fostering successful and authentic influencer partnerships.

3.    Essential elements of an influencer contract: A well-structured influencer contract helps ensure that both parties are clear about their responsibilities and rights, minimizing the risk of misunderstandings and disputes. Here are the essential elements that should be included in every influencer contract:

– Scope of work — A precise and detailed description of the deliverables is crucial for setting clear expectations. This section should outline the exact number and type of posts, stories, videos or other content types the influencer is expected to create. For example, your brand might specify that you expect “three Instagram posts and two Instagram stories” in an influencer’s contract. It’s also important to specify whether your brand expects photo or video content, or a mix of both. 

Additionally, providing detailed brand requirements and guidelines helps ensure consistency with your brand’s voice and aesthetics. This can include specifics like color schemes, hashtags, mentions and overall tone. Further, it’s important to outline the approval process for content before it goes live, including timelines for submission, review and revisions.

– Compensation and payment terms — Clearly defining how and when the influencer will be paid is also essential. Common structures include up-front payment, milestone payments at various stages of the campaign and post-campaign payment after all deliverables have been completed and approved. If the influencer is expected to incur any expenses, such as travel or production costs, it’s important to specify how these will be reimbursed. This should include a list of eligible expenses, instructions on how to submit receipts and the timeline for reimbursement.

– Usage rights — Defining the scope of usage rights helps ensure your brand can utilize the influencer’s content effectively. Specify the platforms where the content can be used, such as your website, social media channels and advertisements. Additionally, clarify whether the content can be used globally or is restricted to certain regions. It’s also important to clarify the duration of usage rights — whether it’s for a limited period, such as six months or one year, or perpetual rights without an expiration date. If needed, be sure to include conditions under which the usage rights can be renewed or extended.

– Disclosure requirements — Compliance with legal guidelines for sponsored content, such as the FTC requirements in the United States, is crucial. In most cases, the influencer is required to clearly disclose their relationship with your brand, using hashtags like #ad or #sponsored. Additionally, provide guidelines on where disclosures should be placed within the content to ensure visibility and adherence to legal standards.

– Exclusivity clause — What is the exclusivity clause for influencers? An exclusivity clause prevents the influencer from promoting competing brands during the campaign period, protecting your brand’s investment and helping ensure the influencer’s focus remains on your brand. To structure an exclusivity clause effectively, specify the duration during which the influencer cannot promote competitors, such as during the campaign and for 30 days afterward. To avoid ambiguity, clearly define what constitutes a competing brand and determine whether the exclusivity is product-specific or covers broader categories.

Including these essential elements in your influencer contract will help ensure a successful and smooth collaboration. By clearly defining the scope of work, compensation, usage rights, disclosure requirements and exclusivity terms, you set the stage for a productive partnership that benefits both your brand and the influencer. Remember, a detailed contract is not just a legal safeguard, but a tool for fostering trust and clarity between all parties involved.

4.    Legal considerations: When structuring influencer partnerships, it’s also important to address certain legal considerations to protect both your brand and the influencer. Proper legal safeguards help ensure clarity, fairness and compliance, reducing the risk of disputes. Here are a couple key legal aspects to make sure you address in your influencer contracts:

– Confidentiality — Confidentiality clauses are essential for safeguarding sensitive information about the collaboration. This can include details about the compensation, deliverables and specific terms of the agreement, as well as information about your brand’s marketing strategies, campaign plans, and any proprietary methods or technologies. Both parties should agree not to disclose any confidential information to third parties without explicit consent. Including a confidentiality clause in your influencer contract helps in protecting your brand’s competitive advantage by ensuring that proprietary strategies and sensitive information remain undisclosed. It also helps you build trust, demonstrating professionalism and a commitment to protecting mutual interests, and fostering a stronger working relationship.

A sample confidentiality clause might state: “Both parties agree to keep the terms of this agreement and all confidential information shared during the collaboration strictly confidential and not to disclose any such information to any third party without prior written consent.”

– Termination terms — Termination clauses provide clarity on how either party can end the agreement. This section should cover conditions under which the contract can be terminated, such as a breach of contract if one party fails to meet their obligations, mutual agreement to terminate the contract if both parties consent and force majeure, allowing termination in case of unforeseen circumstances beyond the control of either party, such as natural disasters or major changes in law.

Defining a notice period and the consequences of termination helps ensure a smooth transition and helps minimize disruption. Specify the amount of notice required for termination, 30 days for example, giving both parties time to make necessary adjustments. Outline the responsibilities of each party if the contract is terminated, such as whether the influencer is required to remove sponsored content from their platforms, how payments are handled in the event of early termination, including pro-rated payments for completed deliverables or refunds for unused portions of the campaign, and any brand-owned materials or products that need to be returned by the influencer.

A sample termination clause might state: “Either party may terminate this agreement by providing 30 days’ written notice to the other party. In the event of termination, the influencer shall remove all sponsored content within 10 days and return any brand-owned property. Any payments due for completed deliverables will be made on a pro-rata basis.”

By setting clear objectives and performance metrics, choosing the right payment approach, creating a well-structured influencer contract and addressing important legal considerations in its deals with influencers, your brand can lay the groundwork for a successful influencer marketing campaign — and increase the likelihood of a long-lasting and mutually beneficial influencer partnership.

When your brand is ready to tap into influencer marketing to increase its brand exposure, awareness and conversions, the experienced team of influencer marketing pros at Joybyte is here to help. And to ease the experience, we can handle all the critical campaign elements for you — from influencer identification and contract structuring to campaign execution and management, success measurement and optimization, influencer relationship management, and all points in between.

Ready to get started with assistance from a marketing agency with a wealth of specialized experience in influencer marketing? Joybyte has you covered — reach out to us today about our range of influencer marketing services.