Content creators and influencers typically receive payment for their work. It’s an exchange of goods and services. The brand pays them, sometimes in cash, other times in product or other valued items. In turn, the creator creates. The influencer recommends, and so on.
The nature of that exchange of goods and services means the government is going to want their share. Whether you’re in the United States or most other countries around the world, you as content creator, or those that you work with, are going need to treat what you do like a business.
Did you know the number of solopreneur businesses … those where the owner is the only employee … have risen 65% since 1997. The Internet and Social Media have fueled the individual business owner, in our case, content creators and influencers.
Now, I’m not here to tell you that starting a business from a legal standpoint is all that difficult. I’ve done it a couple of times in my career as a consultant. But the legalities and requirements of anything can be confusing. So it helps to have legal counsel. Which I have turned to. And I’ve still run into tax issues over the years … nothing major … but it’s cost me more money than I’d care to recall.
Mike Fiffik is an attorney with LegalShield. He operates out of Pittsburgh, Pennsylvania, one of my favorite cities. Mike knows the ins and outs of the legalities of setting up a business and helping content creators and influencers navigate those waters. He also has an eye on the most recent legal perspectives on other topics creators need to grapple with .. intellectual property.
I asked Mike to come on the show and share some wisdom with us. So you content creators out there had an easier path to follow than if you didn’t hear a lawyer tell you how to do all this. For those of you on the brand or agency side, the conversation is super relevant, too. Not only do you need to hear the running-the-business perspective of your creators, but the intellectual property issue is something you need a good grasp on as well.
We’re getting smarter about the law today.
Winfluence is presented by Cipio.ai, the Community Commerce Marketing Platform. See how influence marketing, without the ‘r’, comes to life in creating raving fans to grow your business from your brand’s community – influencers, employees, customers and beyond. Sign up for a demo or the free influence discovery platform at jasonfalls.com/cipio.
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Mike Fiffik on Winfluence Transcript
[00:00:00] Jason: On this episode of Winfluence.
[00:00:01] Mike: You can do the bare minimum, right? Get a tax ID number and file that with your state regulator, and you’re all done, but it’s incomplete, so you’re gonna want to have an operating agreement that governs the rules of the road for your business, it might seem a little silly to do it if you’re a solo, but you really need to have that because you’re gonna be asked for it, if you ever need to borrow money or to buy real estate, or maybe enter into a lease.
[00:00:25] Jason: There’s a difference between being an influencer and actually influencing. I’m Jason Falls, and in this podcast we explore the people, companies campaigns and stories that illustrate that difference. Welcome to Winfluence, the Influence Marketing Podcast
Hello again, friends. Thanks for listening to Winfluence, the Influence marketing podcast. Content creators and influencers typically receive payment for their work. It’s an exchange of goods and services. The brand pays them sometimes in cash, other times in product or other valued items, in turn, the creator creates, the influencer recommends and so on. The nature of that exchange of goods and services means the government is going to want their share. Whether you are in the United States or most other countries around the world, you as a content creator or those that you work with are going to need to treat what they do like a business.
Did you know the number of solopreneur businesses, those where the owner is the only employee? Have risen in the United States 65% since 1997. The internet and social media have fueled the individual business owner, in our case, content creators and influencers. Now, I’m not here to tell you that starting a business from a legal standpoint is all that difficult. I’ve done it a couple of times in my career as a consultant, but the legalities and requirements of anything can be confusing. So it helps to have legal counsel, which I have turned to and I’ve still run into tax issues over the years. Nothing major, but it’s cost me more money than I care to recall.
Mike Fiffik is an attorney of the Legal Shield. He operates out of Pittsburgh, Pennsylvania, one of my favorite cities. Mike knows the ins and outs of the legalities of setting up a business and helping content creators and influencers navigate those waters. He also has an eye on the most recent legal perspectives on other topics creators need to grapple with like intellectual property.
I asked Mike to come on the show and share some wisdom with us so you content creators out there had an easier path to follow than if you didn’t hear a lawyer tell you how to do it all. For those of you on the brand or agency side, the conversation is also super relevant. Not only do you need to hear the running the business perspective of your creators, but the intellectual property issue is something you need a good grasp on as well. We’re getting smarter about the law today. Mike Fiffik from a Legal Shield is coming up.
Winfluence is made possible by cipo.ai, you know by now I’ve recently joined the company as executive vice president for marketing, so it makes sense. cipio.ai becomes the presenting sponsor of the show. What is cipio.ai?
It’s a community commerce marketing platform. What does that mean? It includes an influence marketing software solution, but it has additional apps that function to tap into your brand community to drive commerce. Community commerce marketing moves beyond influencers to fans and followers, customers, employees, and more.
With cipio.ai, you get the vital social media discovery and data you need for your typical influencer marketing efforts, but additional apps help you uncover raving fans in your own community to increase sales retention, and engagement. When I first reviewed cipio.ai last summer long before we talked about me coming on board, I declared it the first software platform I could reasonably call an influence marketing platform without the R.
That should tell you everything you need to know about why I’m now with the company. The best thing about cipio.ai, you can start using it for free. Influence discovery beyond just social media and list building doesn’t cost a thing. Go to jasonfalls.co/cipio. That’s jasonfalls.co/cipio. Go see the software that was so good, I joined the team. jasonfalls.co/cipio.
When you fight the law, as the song says, the law wins, don’t fight it, figure out how to navigate through it without breaking anything, Mike Fiffik from Legal Shield will tell us how next on Winfluence.
Mike, I’ve got a litany of questions to ask you, but I think it’s probably appropriate to start by making sure the audience knows where you’re coming from and why you’re the right person to listen to with some of the insights you’re gonna share with us, so tell folks a little bit about Legal Shield and and what you do within that structure?
[00:04:57] Mike: thanks for having me today. I’m Mike Fiffik, I’m the managing member at my law firm, Fiffik Law Group. I have offices in Pittsburgh and Philadelphia, and my law firm has been a provider law firm for a company called Legal Shield since 1993. Legal Shield is the largest underwriter of legal service plans in the United States today.
And so basically, if you buy a membership with Legal Shield for a monthly rate, you get to call one of my attorneys and ask them basically any question that you want. And we have been asked virtually every question that I think that can be conceived over the last 30 years or so of doing this.
So we handle, I would say it might blow your mind, maybe not, I don’t know, but we handle 50,000 requests for membership on an annual basis pretty easily. So we’re taking, you know, 200 to 300 calls a day from Legal Shield members and it’s great, having access to an attorney is a powerful thing.
And once people realize it, you know, they don’t really think about calling a lawyer for any type of an issue that they have in life because that usually means that the meter’s running and they’re gonna have to pay. Once they realize that the meter’s out of the way and they get connected directly just to legal advice, it can really open doors for them to make, more informed decisions, better decisions, and give them a leg up, right? Because we know that the world is tilted against the small guy out there, and we like to try to balance those skills of justice just a little bit more in favor of the little guy and the small business owner out there.
[00:06:35] Jason: Well, and you’re talking to a lot of small business owners when you talk about influence marketing, because you’re talking about content creators who are cottage industry folks working out of their house, maybe they travel a lot, et cetera, and, to have a model of accessing legal services and advice that’s, you know, affordable and not something where they are fearful that the meter is running is really smart, so I’m glad that you’re doing that.
So I want to ask some of the questions that the content creator, independent practitioner out there would ask and talk through a couple of issues that are specific to the influencer marketing space today. I can attest to the fact that anytime I have a question or an issue that has to do with contracts or legal issues, I consider myself pretty smart.
But there’s a reason that you go to law school and pass them bar to be a lawyer. I’m not gonna leave legal advice up to chance or you know, what I glean from reading something online. It’s just too complex, and of course, the law is vary by state as well. So what are the more common issues that you deal with in a service like Legal Shield, where you’re really trying to be a one stop legal shop for the public?
[00:07:39] Mike: Yeah, I think for small business people in particular and, I’ll, I just wanna say it to the audience, I’m a content creator too. I have a lot of social media pages, I have a YouTube channel. I’ve sort of walked some of those steps that you’ve walked, so I understand a lot of these issues, not just as a lawyer in advising small business people, but I actually do a lot of this stuff as well, so I get where you’re all coming from.
You know, for small business people, whether they’re thinking about getting into business or they’re already into business, I usually start with some very basic stuff, you know, with folks, sort of the nuts and bolts. If you’re gonna be doing any type of business, even if it’s a home based business, you should form a business entity, right?
So get yourself into a limited liability company, that’s what most people do, that’s gonna protect you from alot of regular business type debts and risks. Not all of them, right? Not all of them. There are some exceptions to it, but it’s gonna protect you and it’s gonna give you some sense of credibility, if you have a, an LLC or a company or some kind of a name associated with you you should be using written contracts and I would not recommend that you DIY it all the time or, you know, get your, when you’re a lawyer your designation for your degree is a JD, a Juris doctor, right? So I don’t suggest that you get your Google JD out there and do this stuff yourself, so having access to an attorney to work up contracts for your review contracts for you is a very good idea, but you should have contracts.
Every small business person, especially if you’re a solo, right? You need to have a business power of attorney because your business the end of your business right, is as close as you having an auto accident or a health event, or you’re just, you know, stuck somewhere and you can’t get somewhere that you need to be as a business owner.
You need to have a business power of attorney that you sort of give the keys to somebody to take over in the event, you can’t be running your business all by yourself coz if you can’t do it, you don’t want your business to stop, that would really be catastrophic. The least expensive and best type of insurance that you can get for yourself.
And then for a lot of business owners, these days, I just want them to be aware that a lot of your business assets, a lot of the value, especially if you’re an influencer, right, is digitized, it’s in the digital world. And so you really have to be aware of the fact that you have digital assets and you need to be thinking about protecting your digital assets because that is your business.
So you really have to start from the very beginning making sure that you’re managing your assets.
[00:10:18] Jason: Well, and let’s, start with, you. which is kind of setting up your business for those out there that don’t know and obviously the steps are a little different state by state, but in general, correct me if I’m wrong here Mike, essentially in order to set up an LLC, You basically file a form with the, you know, federal government, the IRS to get an employee identification number, which is kind of like a business social security number.
It gives you an entity that you can file taxes with, and at least in the state of Kentucky, You go to the Secretary of State’s website and you say, hey, I’m starting a business in Kentucky, here’s my federal tax ID number, here’s my address, and here’s who’s in charge of it, and that lets the state know that you are a taxable entity. Are there steps probably it varies by state, but are there other steps that people need to do to establish that legal identity and have a company?
[00:11:09] Mike: Yeah, absolutely. You can do the bare minimum, right? Get a tax ID number and file that probably two page form with your state regulator, and that’s, you’re all done, but you know, it’s incomplete. So you’re gonna want to have an operating agreement, that governs the rules of the road for your business.
It might seem a little silly to do it if you’re a solo, but you really need to have that because you’re gonna be asked for it, if you ever need to borrow money or to buy real estate or maybe enter into a lease, that’s a basic legal document that you’re gonna need to produce, that needs to be signed.
You don’t wanna be scrambling around to try to produce something like that later on down the road, whenever it is that you need it, you probably need to file or register yourself with your state taxing body, maybe Department of Labor as well. There are some registrations that you’ll need to do there.
So those are some steps beyond that, if you are a minority or like a recognized minority, you may also wanna register as a woman owned business or a minority owned business of some kind, because you might get some contracting or some other types of benefits out there that’ll give you a leg up on your competition, for contract, right? And having a state certification as one of those types of businesses may in fact be helpful for you. So those are some, a little, few extra steps that you might wanna go into.
[00:12:27] Jason: Very good, and, just to frame the conversation a bit, I did a little bit of digging here. The number of employer firms, so that’s small businesses that have employees besides the business owner, that number has been very level for decades, about 5 million small businesses in the US have employees.
According to the Small Business Association since 1997, the number of non employer firms, so businesses that only have the owner as an employee, solopreneurs has risen over 65% from 15 million to now over 25 million. 81% of small businesses in the US have one employee. That’s a tremendous amount of the economy and certainly social media, content creation, influence marketing, the creator economy is just exacerbating that and making that number even bigger.
So I wanna talk about the content creator you know, portion more specifically, let’s say there’s a content creator out there or just an individual who wants to branch out on their own as a consultant, present company, most certainly included. What are the two or three things besides setting up their business that they really need to do to set them up, for success and also set them up for less legal risk?
[00:13:42] Mike: So well, I’ll just say from, if you’re an influencer, you have to recognize that a big part or something you’re gonna have to become aware of and understand really well is that the Federal Trade Commission has very specific rules that apply to influencers, you know, that are out there.
The FTCs concerned about endorsements that are made on behalf of some type of a sponsoring advertiser. So, if you are sponsoring or talking about a product and you’re getting paid for it, whether it’s by money or in products, you’re probably covered by the FTC rule and probably the advertiser’s gonna make sure that you understand that, right?
They, you know, good advertisers are gonna let you know You’re covered by the FTC rules and probably give you some rules of the road, but you need to know that, you know, right up front, especially if it’s interstate commerce, that’s really what we’re talking about, not influencing for the local lemonade stand in your hometown, that wouldn’t be a big deal , but most people aren’t gonna make any money doing that.
So you gotta understand that, right? And basically the name of the game is disclosure, right? You’re gonna need to disclose that you’ve got a business relationship, because you’re, sponsoring this product, it’s because you have a business relationship. You can’t hide it or try to obscure it.
And you need to just make sure that people understand that there’s a relationship between you and the advertiser. So it’s disclosing that on your blog posts or in your tweets or videos whatever it is that you’re doing from an influencer standpoint that’s what you’re gonna need to do out there.
And there may be other governmental regulations that speak to this depending on the type of product that you’re endorsing. So maybe it’s the FDA or some other regulators that have things out there. Your state may also have, most states have some type of unfair trade practice statute of some kind, some type of consumer protection statute that may speak to these issues as well.
So, it just, number one, you have to be aware of that. The advertiser that you’re gonna be working with will probably tell you, but you can’t necessarily, rely upon that, and at the end of the day, it’s your responsibility to know those things. And this is where having a relationship with an attorney is really important because you need to know and be really good at doing the influencing part.
You don’t need to be good at knowing all of this stuff, right? And so call somebody that knows about it and they’ll tell you, you’ll be that much further along, if you have access to a lawyer that can say, okay, where you at? You’re in Kentucky. Here’s what you gotta be worried about here, and, you know, the rules of the road are relatively basic.
I think you can avoid stepping on a landmine with some good sound, legal advice.
[00:16:28] Jason: Well now what Mike said, everyone is certainly true. You as the content creator, influencer, need to be aware of the FTC disclosures and all the other rules that apply to you. But I would also say that you brand folks out there listening also need to be aware of that too, because from what I understand, and it’s been a while since I’ve read of a case of this happening, but the limited number of cases where the FTC has come down on, an influencer relationship around that disclosure rule. They don’t just find the influencer, they find the brand too. So the responsibility is shared, so this is not something that either side can ignore or run away from. You’re both responsible for that, so keep that in mind.
[00:17:11] Mike: yeah, and there’s the teamy was one that was a big one where the FTC came down on them for violation of these FTC rules, and I think that the fine was something like $15 million, although it ultimately got reduced, they didn’t find any of the influencers.
But you know, they certainly made it aware, made everybody aware that influences, could be personally responsible, and the FTC just issued, I think in October of last year, so just almost a year ago, published a very long list of companies that they believe are violating the FTC rules, and there are very big companies on there, right? And small companies too, right? So they’re active, it’s not like they’re just, asleep at the wheel.
[00:17:51] Jason: Yeah, I think the first time I read of an FTC fine being levied, it was against a company and the influencer and they were both fined $17,000 per incident. So this isn’t something that you’re gonna be able to write off folks, this is serious stuff. We’re talking to Mike Fick from Legal Shield and making sure the content creators and influencers out there that are moving into being entrepreneurs and starting businesses with their content creation and influence as the product we’re making sure they’re doing so wisely.
When we come back after the break, I want to ask Mike about the legal concerns specific to influencers and content creators, intellectual property and the like. But we’ll also ask him to share some ideas for brands and agencies on dealing with content and content creators Stay tuned.
Back on Winfluence with Mike Fiffik. He is an attorney with Legal Shield and he is a Pittsburgh guy, so, I’ll resist the urge to sit here and get all yins are on you and talk Pittsburgh, coz that’ll probably bore most of the people listening, but.
[00:18:50] Mike: Yeah, if we started talking about the pirates, we probably both start crying, Jason, right?
[00:18:54] Jason: That’s true, yeah. We’re long suffering Pirates fans, so, I mean, you know, we’ve got little highlights with the Steelers and Penguins over the years, but the pirates are, it’s tough to be a Pirates fan these days
[00:19:04] Mike: Boy, I tell you that
[00:19:06] Jason: Although, anyway, I’ll throw this out there. For those of you who are Pittsburgh people, Pittsburgh fans, if you’re in Pittsburgh, you know this but if you aren’t, then I will point you in this direction.
Go subscribe to the Ya JagOff podcast my buddies John Chamberlain and Rachel Rennebeck on that, it’s great Pittsburgh focused stuff, and they’re actually getting ready to produce a marketing podcast that is going to be on the marketing podcast network, so stay tuned for all that, so all sorts of Pittsburgh stuff happen.
Anyway, all right, we gotta get back to the task at hand here with Mike. So, Mike we’re talking about the ways small business owners in general can protect themselves legally as they set up businesses, but I want to get into the nuances of that content creator and influencer, you know, solopreneur themselves, we’re talking about people who create intellectual property. Now, I might think that, that includes photographs, videos, maybe writing for those that really don’t know what is intellectual property and what does all of that encompass?
[00:20:03] Mike: Yeah, , what’s got, thats a very broad topic, right? But yeah, intellectual property would be images, whether they’re, photographs, whether they’re artistically created, digitally created images it’s writings, some type of creation ideas concepts, designs, customer lists, recipes, all of that falls under the broad category of intellectual property.
there are a lot of potholes that influencers can step on or step in in this particular category. Things that they have to worry about just for themselves as creators, because they are creators, right? But worried about, violating somebody else’s rights, you know, as a intellectual property, so this is a, big area of learning.
And sometimes you can get spanked if you get like a nasty gram from some giant law firm from New York or Los Angeles saying that we think that you’re violating our client’s intellectual property rights. That can be very scary situation it’s a learning experience.
But anyway I’ll talk about as influence, you know, protecting yours, and I’ve mention, that, you are a digital business, so you really have to be thinking about protecting your own digital assets. So, you know, you have to create an inventory of everything that you own, whether it’s digital files that you’ve created, images, things of that nature, but also your online accounts that you use to work with.
You wanna back everything up regularly, god forbid you keeping it all on your laptop and it’s not in the cloud or wherever, but you need to be backing all of that stuff up, you know, regularly. If you are having somebody work with you to create content, whether it’s your buddy or somebody that you actually employ, or some agency of some kind, or a designer, Because you’re not very good at doing graphic art, but you know, you’re good at speaking online or whatever it is.
You need to make sure that you have agreements in place and make sure that they understand that whatever they create on your behalf, you own, they don’t you don’t wanna have them pull all of that stuff off of your sites. You may wanna get trademark protection for your images and logos.
That could be something that’s important as well. And you wanna have some type of digital asset management software, you know, of some kind that’s going to, where you can log all of your digital assets, where you can store it there, you can manage it there, you can give the keys to the cupboard to somebody like that power of attorney that I talked about.
You wanna have all of that there. This is what your company is, this is what your business is, you’ve got to protect it. And then almost just as importantly, you have to understand that if you’re gonna have contracts with advertisers, you probably have to give them the keys to your cupboard, coz they’re gonna wanna see what’s going on to make sure that they’re getting their return on investment.
So, Almost as important as all of those things is you need to keep your personal stuff personal, right? You can’t co-mingle that, your personal things, if you wanna maintain any level of privacy. So keep all of that stuff separate on a different laptop, on a different phone, in a different, cloud account, you know, whatever it is, because if you don’t want somebody to see whatever it is that you have there, right?
Then you need to really make sure that there is, the proverbial Chinese wall between your digital assets and where they’re stored for your business and all of your personal stuff, right? So that’s very important, I think, as a basic starting point, you just have to realize that’s very important coz that is your business, right?
[00:23:30] Jason: Yeah and that’s gonna be a challenge for a lot of content creators out there because the reason that they have such engaged audiences in a lot of cases is because they blur that line between what is business and what is personal, their personal lives, and living them so openly is part of that process.
So, It’s something that you definitely have to think about, if there has to be a line for everyone, you’ve gotta be very clear on what that line is and make sure that there is, as Mike said, that proverbial great wall of China between those pieces of content. So, real quickly, Mike, one nuance about this whole thing.
This is a question I’ve been asked before. I’m not a lawyer or a legal expert, but I’ve read up enough to think I know the answer, and maybe you do, maybe you don’t, but you know let’s say I create a beautiful video or image, I upload that image to any of the main social networks, am I giving up any rights to that intellectual property? Does Mark Zuckerberg own it now?
[00:24:25] Mike: No, you’ve a copyright arises under the law, you know, so you have a copyright under the law to things that you create yourself right now where you can get yourself into trouble is putting a video up that you’ve created, but then you’re using somebody else’s music underneath, so you can have, you know, you’ve got your own intellectual property out there, you’ve got a copyright to, that you should put copyright marks on or, you know, say that you own it, right? You wanna state those things, but you gotta be careful about using somebody else’s work as part of it, because you could be violating somebody else’s copyrights, you can’t use somebody else’s music without their permission.
You know, there’s a lot of, royalty free music that you can use out there. There are lots of places where you can find that kind of stuff, but if you’re using a popular song on your videos or whatever it is, you have to be very careful about what you’re doing there. But yeah you have a copyright to things that you create, and just because you put it out there for people to see doesn’t mean that you don’t have some type of rights to it.
[00:25:25] Jason: good to know, and I will tell folks out there, especially those of you that are interested in podcasting audio stuff or even video stuff with regards to music, I did a podcast experiment a few years ago where I licensed music, to use on the show. I wanted to use popular songs and so I filed, you know, applications with the two main, you know, ASCAP and BMI the two main music licensing trade bodies out there.
And I will tell you that it was worth it because I got to use all this cool music on the show. And if I had been able to put more time and energy into growing the show, it would’ve been kind of interesting to have the license to use that music, but the challenge, just so you know, is number one, you have to file quarterly usage reports with both of those bodies to tell them exactly what songs you used, who the artist was, et cetera.
So there’s a lot of paperwork involved in making sure that you are telling them what you’re doing. And the fees, I mean, for the entire year, the fees were a few hundred dollars total, it wasn’t a whole lot of money based on what I was using it for. Obviously the more downloads and listens for your podcast or views of your video, the more you’re gonna pay, because every time that song gets played, there’s an increase.
But I was paying probably three or $400 a year, probably total. So it wasn’t very expensive, but the paperwork was a monster, and I didn’t like keeping up with it. So understand, if you’re gonna get into that license music or even license video content, there’s going to be some administrative costs that you may not be anticipating. It can be a real pain in the ass, quite frankly but you gotta do it.
[00:27:01] Mike: Using other people’s images as well, if you use photos, things of that nature, there are entities out there that are pretty vigilant about protecting their copyright to images and things of that nature, so you really need to pay for, if you’re gonna use images, you need to find royalty free images or just pay, have a subscription of something to Canva or whatever it is, or to get royalty images or Getty images or whatever, just pay for them.
It’s much less expensive to do it the right way the first time around than get a nasty gram from somebody like me on behalf of some company. It’s gonna cost you a whole lot more money and we aren’t gonna be very nice.
[00:27:37] Jason: Yeah, that’s true. I will tell folks out there who are looking for the royalty free images route, I’ve been using Unsplash for quite some time now, it’s a great site where the photographers upload images under the auspices that they may get credit for it, they may not, but they’re allowing you to use it free of charge. So unsplash.com is a great resource for that.
[00:27:56] Mike: I’ve used that one as well, Canva, they’re all pretty good and they have a lot of graphic design features to them as well, anymore these days, so they’re pretty cool, so at least while I was doing, before I hired somebody to do it.
[00:28:07] Jason: Mike, before I go, I also wanna make sure the brand and agency folks get a little bit of your expertise here too, there’s a question that I think bridges that gap. For the creators who may not know that this is important, talk to me about what they need to ask for and watch for in a contract with a brand or an agency. Then maybe flip that and tell us what the brand or agency that works with a creator needs to watch for in that contract?
[00:28:31] Mike: Yeah, this is a great question. This is sort of the meat and potatoes, if you’re gonna get into this business you need to have a contract and need to know what to look for, so for an influencer, I think there are a few things that I would suggest one, you need to make sure that your contract defines the scope of work that you’re gonna do, right?
What is it exactly that you’re gonna be doing for this advertiser? Is it, you know, content creation? Are they gonna be doing some of it? Are you doing all of it? Are you going to attend events? What type of visibility? So you need to get pretty good detail about what exactly it is that they want you to do, what your role is, what their role is gonna be.
It’s important because you don’t wanna have what they refer to as scope creep, right? Where you think it’s one thing when you’re getting into it and it turns out to be a whole nother ballgame, like marriage, you think it’s gonna be one thing, and then when you get into it, you realize it’s this whole other thing, at least for guys anyway, that’s right?
[00:29:28] Jason: Oh, I’m sure my ex-wife will tell you that it was a whole lot more than she bargained for too so…
[00:29:32] Mike: That’s right, or for most guys, for wives, it’s, this is a whole lot less than I thought it was gonna be, right? But anyway, we digress. So , you wanna make sure that you have a pretty good idea of what it is that they want you to do. Secondly you need to address who owns the stuff that you’re creating, right?
Do you own it or are you creating it as a work for hire, as they call it in the parlance for the advertiser, meaning they’re going to own it. You really, really need to understand that because this is your business so It might be a work for hire for them, but they may give you a right to use it in your portfolio going forward, or to allow it to stay on your social media sites or whatever it is.
So need to understand who owns the intellectual property that’s being created. You need to understand whether you’re gonna be an employee, or paid as an independent contractor. This is a big area where businesses can get in trouble because misclassification of workers is a big problem for everybody, right?
you’re probably gonna be an independent contractor. Meaning for you, the most important part of that is you’re gonna pay more taxes on the money that you earn, right? They aren’t gonna be sharing the load as part of the, relationship, so just have a higher tax burden, right?
But if you’re an LLC and you’ve got a good accountant, hopefully you can write a lot of expenses off and shield some of that in income. Understand that they’re going to have access to your, digital files most likely. You need to understand exactly what that is gonna be and what the key performance indicators are that they’re gonna want you to perform to, right?
They want to get a return on their investment, they’re gonna wanna see exactly what’s going on, and so you’re probably gonna have to give them access to all of your social media accounts to look at all of the insights and the Google Analytics and all of that good stuff that’s out there to make sure you’re doing what you’re supposed to do.
You’ll have to comply with FTC and other regulatory guidelines. You should ask them to give you from a very specifically what they want you to do in the way of complying with those FTC guidelines. So whenever you’re tweeting and you’re putting a hashtag in there, or disclosure, you wanna ask them, What, how do you want me to disclose this relationship?
Tell me specifically what you want me to do, so that there’s no misunderstanding, you don’t get yourself in hot water with them and then compensation, how are you gonna get paid, right? Most importantly for you, how are you gonna get paid? When are you gonna get paid? , what denominations are they going to pay you, right?
Make sure it’s dollars or euro, whatever you want, right? but better understand exactly what that is, so those are some of the basics, right? Just the key components to an influencer, for influencers, right? Those are the things that you really should be looking for. You know, if I were talking to a company or a brand of some kind, you know, the first thing that I would tell them is make sure that your influencer knows what the FTC guidelines are.
That’s the most important thing for them, right? You don’t want some, you know, a bunch of wild cards going around out there, doing whatever they wanna do. So most companies are gonna have pretty strict guidelines about what they want should be in writing so that there’s no misunderstanding, and you give them specific guidelines.
And if you’re working with an influencer that’s relatively new to the game, you probably wanna manage their content or ask for approval before they can post anything in advance to make sure that they’re not running a foul, right? So you wanna review their content. I think that’s really the most important thing for advertisers is to make sure that their content is compliant with whatever the regulations are and they get approval at least until they feel comfortable that the influencer, understands and can comply with whatever it is that they’re doing, so may also wanna check to see if the influencer is member of the Screen Actor’s Guild, sometimes that happens, right? They might have a whole nother set of ball game things that they have to comply with if that influencer is a member of the Screen Actor’s Guild, so those would be some basics, there for brands that I would be, you know, talking about.
[00:33:27] Jason: Very good, yeah I would also say for brands and creators, when you’re talking about how you’re gonna get paid, when you’re gonna get paid, et cetera, keep in mind, if you’re a content creator and you’re an independent, Person, you know, you’re, it’s very important, especially early on when money’s not something that you have a great you know, resources to, to capitalize what you’re doing, but it’s important for you to get paid and it’s important for you to get paid probably pretty quickly. You know, probably within 30 days, sometimes creators will say, You have to pay me 50% upfront, and make sure that you’re having that conversation with the brand early because if you look at it from the other side of the aisle, the brand perspective, bigger companies are used to paying in like, 30, 45, 60, even 90 day cycles, and if that’s how they’re used to paying, they’re not gonna necessarily mention it in the negotiation.
You’re gonna send them an invoice. You may not see it for three months. And that’s prohibitive for someone who’s a solopreneur who needs that money to be able to, pay their bills where they’re doing all this work. So having that conversation, especially with a new client up front, whether you are on the brand side or you are the creator, and if you’re on the brand side, understand that creators often can’t operate on a 90 day paying cycle. Like they have bills coming up next month and they’re not a big enough corporation with levels of bureaucracy and accounting,
that mean that 90 days is acceptable, right? It’s gotta be, either half upfront or 30 days, maybe 60 days if you’re lucky. So understand on both sides of that equation and have that conversation.
[00:35:00] Mike: Yeah, it’s not like they’re gonna change that pay cycle for you
[00:35:02] Jason: No,
[00:35:02] Mike: They’re locked in.
[00:35:04] Jason: and it’s, I’ll raise my hand here and say it’s probably even worse with agencies.
If you’re a creator out there, or if you’re an agency, have this conversation up front because, for those of us in the agency world, we know we can’t pay that creator bill until the client pays their bill to us, right? So there’s an extra pay cycle in there that we’ve gotta account for somehow. So if the creator wants 50% up front, Then there has to be a couple of weeks for us to let the client know we’ve gotta pay 50% up front.
So get us that money so that we can get started, so that conversation is a very important conversation, and if you don’t have it and have it well up front, there’s gonna be some frustration and friction in that relationship, and you wanna try to remove that if at all possible.
[00:35:49] Mike: Even little details like what’s the invoice supposed to look like, right? You know, you wanna make some bean counter in the billing department, they see an invoice that doesn’t look like it’s supposed to look, they just sit. Now , you’re in la la land,
[00:36:02] Jason: there’s a comma in your company name, but there’s not a comment in the company name on file with the Secretary of State. So you gotta redo the whole invoice. And you’re like, what?
[00:36:10] Mike: Yeah, that’s right.
[00:36:11] Jason: And for the first time if you’re an independent contractor, just fricking send them a W9 man, they’re gonna ask for it. So just have one on, I’ve got mine filled out as a PDF on my desktop, and anytime I deal with somebody new, I just send them a copy of the W9 because then I don’t have to worry about it.
[00:36:27] Mike: Yeah. That’s the sort of those standard business documents that you just have PDFs of and just send it out as a package, right?
[00:36:32] Jason: Absolutely, yeah. I mean, if the influencers are new to this whole business and legal thing, brands and agencies who work with ’em certainly need to be alert, but of course, I would always recommend in the interest of the relationship and the industry, if you know you’re dealing with someone who maybe doesn’t have their ducks in a row, if you’re on the agency looking at creators, look out for them too.
Help them understand the contract, what it obligates them to do, so that they understand licensing and things like that. Theoretically it might cost you a little bit more money in the long run because you’re educating them that what’s fair is fair and they can make more money, but it’s gonna make that relationship in your position with the creator a lot stronger.
Mike, this has been super useful for folks. Where can people connect with you online, and where can they reach out if they wanna get some legal help through Legal Shield?
[00:37:16] Mike: Thanks. My website is www.fifiklaw.com. fifiklaw.com, you can find me there. We’re on Twitter, Facebook, Instagram, YouTube. We have a YouTube channel. We regularly do webinars. You can find us on Event Bright if you just search for fifiklaw and be happy to talk to anybody. Give us a, pop us an email, send us a text, tweet, dm, whatever it is, we respond to them all, be happy to talk with you anytime.
[00:37:47] Jason: Not doing any crazy TikTok answers yet,
[00:37:51] Mike: You know, I’ve been asked and I said, that’s just not my space,
[00:37:57] Jason: And there’s absolutely nothing wrong with that.
[00:38:02] Mike: but I’ve been asked, that’s funny.
[00:38:04] Jason: Awesome, Mike. Thanks for your help today, appreciate your wisdom, sir.
[00:38:07] Mike: Thanks Jason very much.
[00:38:16] Jason: Useful that appreciate Mike sharing the wisdom with us. As always, with regard to the law, you need to pay attention to federal, state, and local regulations and requirements. So it’s best to consult a business attorney in your city or area. They’ll be more prepared to help you with the state and local stuff. And of course, legalshield.com is a great place to start.
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Winfluence, the Influence Marketing Podcast is an audio companion to my book Winfluence Reframing Influencer Marketing to Ignite Your Brand. Get your copy online at winfluencebook.com. While you’re there, sign up for the latest ideas about influence marketing delivered in my periodic newsletter, or book me to speak to your company or organization about influence marketing.
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