A Guide to Understanding Fees Charged by Influencer Agencies
Let’s talk money and Influencer Management Agency Fees. Today we’re getting into the wallet side of being an influencer or content creator. Yep, we’re talking about all those fees your agency might be charging you.
We’re a big fan of how teaming up with an agency can totally rev up your career. They’re like your backstage pass to awesome opportunities and skyrocketing your influence.
But hey, let’s not forget – this sweet deal does come with its own price tag. And it’s super important for you to get the lowdown on the different types of fees out there. We’re talking percentages of your hard-earned cash, flat rates, or even those maybe-a-little-bit-sneaky performance-based fees. These aren’t just numbers; they’re big players in how much money you take home from your hard work.
I’m all for agencies! If you get the right management, it can be golden. So, as we roll through today’s details, remember that no matter where you are in your influencer career, getting the scoop on agency fees is important. It’s about recognising your worth and making sure any deal you shake hands on is a win-win for both you and your agency.
Whether you’re a newbie or a seasoned pro, today’s blog is going shine some light on the fee puzzle. Read through until the end – I’ve got some tips on how to strut into those fee negotiations with all the confidence in the world.
Oh, and if you missed our podcast episodes on the Influencers Guide to Talent Management Agencies and Exclusive vs Non-Exclusive Talent Agreements, listen in to those. They’re part of our series on talent management agencies that go hand-in-hand with this blog.
And here’s a pro tip: In some places, the rules on what an agency can charge might be set in stone by industry or even the government. Yep, this means there could be caps on how much an agent can take from certain types of your gigs. It’s all about fairness and keeping things crystal clear in the industry, making sure you, the star of the show, are looked after. These rules can vary a lot depending on where you’re at, so being in the know about your regions regulations can save you from some legal and financial headaches down the road.
Alright, enough warm-up. Let’s get into the nitty-gritty of agency fees.
Influencer Agency Fees – Commission Fees
Commission fees are perhaps the most common type of fee arrangement between influencers and agencies. A commission fee is a percentage of the earnings that an influencer makes from deals or campaigns that the agency secures for them. This means that the agency’s income is directly tied to the success of the influencer – if the influencer earns more, so does the agency.
Let’s talk numbers. The typical percentage range for commission fees can vary, but it generally falls between 10% to 25%. This range can depend on several factors, including the industry, the influencer’s market value, and the services provided by the agency. Some high-profile influencers might negotiate lower rates, while those just starting out might see higher percentages. The rate will also be determined in part by whether you’re signed as exclusive or non-exclusive talent.
There are pros and cons to this type of arrangement. On the plus side, commission fees align the interests of the agency with those of the influencer. Since the agency’s earnings are based on the influencer’s success, they are motivated to find lucrative and suitable deals. This can be particularly beneficial for influencers who are new to the industry and rely on the agency’s expertise and contacts.
An important aspect to understand in commission fees is whether the commission is taken on the gross fee or the net fee. This distinction can significantly impact the actual earnings an influencer takes home.
The gross fee refers to the total amount paid by a client for a campaign before any deductions. On the other hand, a net fee is the amount left after any deductions are made from the gross fee. These deductions could include any range of taxes, fees or expenses, so it’s important to understand if any additional fees are noted in your agency agreement, or when a campaign is offered to you to avoid misunderstandings about how your earnings are calculated.
Influencer Agency Fees – Flat Fees
Unlike commission-based fees, where the agency earns a percentage of the influencer’s income, a flat fee structure involves the agency charging a fixed amount for their services, regardless of your earnings from a campaign.
In a flat fee scenario, an agency charges an influencer a predetermined amount for specific services or campaign management. This could include negotiating deals, managing contracts, coordinating with brands, and other support services. The fee should be agreed upon in advance, and is likely to appear in your agency contract.
In my experience, a flat fee model has only been used on smaller-scale projects where the value of the work was low and a minimum amount needs to be recovered by the agency to cover their costs. This flat fee might be in the range of $250 – $1,000.
Influencer Agency Fees – Retainer Fees
Sometimes, these retainer fees are combined with commission-based fees to create a more comprehensive compensation model.
A retainer fee is a regular, pre-agreed payment made by an influencer to an agency for ongoing services. This fixed fee is usually charged monthly and covers a specified range of services, providing a steady income for the agency and consistent support for the influencer.
It’s not uncommon for agencies and influencers to agree on a combination of retainer and commission fees. In this hybrid model, the retainer fee covers the baseline services provided by the agency, while the commission fee is applied to specific earnings or successful deals brought in by the agency’s efforts.
For example, an influencer might pay a monthly retainer fee of $2,000 for ongoing services like brand strategy, management and administration services. Additionally, for any campaigns the agency secures, a commission of 15% on the gross earnings from those deals is charged. This arrangement ensures that the agency is compensated for their regular consulting services while also being incentivised to actively seek out lucrative opportunities for the influencer.
Influencer Agency Fees – Performance Based Fees
Performance-based fees are results-oriented approach to agency compensation. This model differs significantly from commission, flat fee or retainer arrangements, focusing instead on the tangible outcomes of a campaign.
Performance-based fees are directly tied to the success of specific campaigns that an influencer participates in. Under this model, the compensation is contingent upon achieving predefined performance metrics, such as the number of sales generated, engagement levels, or other key performance indicators (KPIs) agreed upon in advance. The agency earns a fee only when these targets are met or exceeded.
This fee structure is highly aligned with campaign results. Because of this, it is my recommendation to avoid these types of campaigns, unless everyone’s role in the campaign is clearly defined. For example, if the campaign was to run for a certain term but you didn’t receive the product/ brief until a day or two prior to commencement which prevented you from going live on campaign start date, the brand or agency had other obligations to fulfill that impacts your delivery of the campaign, or you have no oversight to metrics that might inform your income, these performance-based fees can be problematic.
It is always my preference to work on campaigns with clearly defined payment amounts for your work.
Influencer Agency Fees – Service, Operational, Administration and Other Fees
There are some additional fees that agencies may charge to you or the brand, which might not be obvious or even necessarily disclosed in your agreement. These fees can include:
- Termination Fee
- Marketing Fee
- Service Fee
- Administration Fee
- Percentage of Spend
Agency fees will vary greatly, so it’s important to have this discussion upfront before signing your agency agreement, and checking each campaign for any additional fees that might apply.
Tips on Negotiating Your Fees
Negotiation is a constant process in business, and a skill that needs to be honed, regardless of where you’re at in your career.
Generally, you’ll have three key times to negotiate your fees:
- Prior to Signing an Agency Agreement – once you’ve signed your agreement, it’s difficult to negotiate. Not impossible but far more difficult than when an agency is in that “dating phase” and trying to get you on their books.
- On Presentation of Campaigns – carefully review the documentation relating to each campaign you’re presented. Check for any additional or unusual fees, for example a cancellation fee. These can sometimes be mandated by the brand and your agent has an obligation to pass on this fee.
- On Renewal of Your Agency Agreement – if you’re renewing a term with your current agent, it’s a good time to have a discussion around commission and fees. Go the discussion prepared with the value you bought to the relationship and be ready to present what you’d like to negotiate. We’ll dedicate a future episode to fee negotiation soon.
Understanding the different types of fees and agency might charge an influencer is the important first step in being able to negotiate those fees. You need to also understand your market value, be able to effectively communicate your worth, while professionally and respectfully navigating the dynamics of the agency-influencer relationship to achieve mutually beneficial agreements.
Listen in to The Business Of Influence podcast 4-part series on navigating what you need to know about signing with a talent agency:
Episode 19 – Influencer’s Guide to Talent Management Agencies
Episode 20 – Exclusive vs Non-Exclusive Talent Agreements – What You Need to Know
Episode 21 – What Fees to Expect from Your Influencer Management Agency
