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What Creators Don’t Know – Setting Your Value!

by | Aug 25, 2021 | Firm News

By Joseph Wapelhorst, Staff Writer

There’s a lot of attention in the business world on online creators, whose aspirations are being challenged by both predatory corporations and their own lack of preparation to be able to succeed.

“Creators create,” said Danielle Wiley, founder and CEO of Sway Group, an influencer marketing agency. “They’re making content and then sharing it with the world.”

Creators include professional YouTubers with millions of followers and filming studios, TikTok stars who perform dances on the platform in the bedroom, or comedic Instagram meme pages which create visual content in an app on their phone. The common link is independent digital content created on a semi regular to frequent basis most often with a theme or brand attached.

These content themes or creator brands – combined with large digital followings – lend themselves to digital advertisements to primarily young audiences. This is something that every company is finding increasingly desirable. A beauty YouTuber’s offhand mention of their dog’s food brand or their deliberate commentary on a makeup brand could spur a business to contact the creator through direct messages (DM’s), email, or texts.

Then, they try to set up a deal in which their product is plugged, often with a prepared script or message given to the creator for some – or no – compensation. The compensation, if there is compensation, can include cash, products, or simply exposure. For creators looking to grow their audience, these deals can be very attractive – but many of them have begun to raise alarms on predatory practices.

Here, having a contract is important. It is obvious that a written offer in an email or even a DM will have some value for a creator looking to ensure they are not cheated out of compensation. Having a written – instead of a verbal – agreement with clearly defined terms is essential for anyone exchanging services for some form of compensation. A writing is also critical in establishing timelines for those exchanges.

But it is the “blind” way that creators are forced to evaluate these offers without full knowledge of a company’s resources, their own value as an advertiser/creator, and an idea of rates/compensation offered to other creators that is the “big” problem.

A small “revolution” has occurred. Creators have almost reinvented the “unions for the digital age” by establishing platforms and online communities where information on brand deals, from payment, to requests about the general quality of a working relationship, can be shared among them. These can help creators to compare rates offered each another, avoid predatory offers and seek out deals that could best benefit them. While it has not solved the “big problem” facing creators, it has given them a starting point for negotiation in deciding the terms of a deal.

The core of any contract, of course, are its terms.  Creators and all those seeking to enter even the most commonplace transactions in or out of the corporate sphere need to understand the terms of their agreement. Negotiation is how those terms are decided and thus the opportunity for creators (or anyone) to assert their value and make their demands. The rules of negotiating are rather simple: know your goal (particularly regarding compensation), define your obligation (positively and negatively), and balance your power with the other side.

Knowing your goal means understanding what you are asking for as compensation and how it compares to others in a similar situation. It also means understanding how this particular agreement will fit into your plans, be they personal or professional. Defining obligations positively means knowing what your “business partner” expects of you. For example, how many videos will a YouTuber have to make? What will the content be? Defining the obligation negatively means understanding what you should not do and what you don’t need to do. In the same example, it might mean the YouTuber must not mention a competing brand’s product for the terms of the arrangement, but they don’t need to show themselves using the product.

Finally, balancing power with the “business partner” means that the terms of the agreement or contract gives both equal power when it comes to enforcement, nullification, penalties and term renegotiation. But it also means that for online creators, they are not “in the dark” about their rights and responsibilities. Knowing your value is critical to creating a balance of power in the contract and ensuring proper business practices. And as always, be sure to get it in writing.

Staff Writer Joey Wapelhorst is a recent graduate of Fordham University where he studied Political Science and Accounting with a focus on Constitutional Law and American Government. He begins Georgetown Law School in the Fall.


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