Do You Need a Contract for Podcast Sponsorship?

Hey everybody, I'm going to start off this episode by telling you that I am not a lawyer. And everything you hear on this episode should not constitute legal advice. I'm going to tell you about my experiences. Working over many years with many different brands and companies. On a bunch of different projects. And how I have dealt contractually. With sponsorships. In the past. So there you go. I'm not a lawyer. This is not legal advice. This is just my shared experience. And what you might look for. And how I have handled things. So listener Erin wrote in and she asked about a contract for sponsorship. She said that she's been getting. Requests. Congratulations for sponsorship. And she was looking for a. Template. Four. A contract for sponsorships. Now I will say, um, Aye. I would recommend that you, if you run a business, you should have a lawyer or a lawyer friend who you can ask questions to. Um, I ran this by my lawyer several years ago. Uh, but I don't use a contract. I use. And insertion order. And so in today's episode, I'm going to talk What an insertion order is versus a contract. What to do when a brand presents you with a contract that you don't necessarily want to sign or isn't relevant. And how to deal with payment terms. So that's what we're going to talk about today on make money podcasting Here on make money podcasting. Okay. So first off. Do you use a contract or do you use what I use, which is an insertion order? Uh, I should say, You should do. Whatever makes you most comfortable. As well as whatever you work out with the brand that may be different. I've run sponsorships where. I just basically included the terms on the invoice. And that was good enough for some, and I've signed some pretty in-depth contracts that I'll talk about in a minute. Uh, but an insertion order or an IO is an agreed upon order given by an advertiser or their agency for an advertisement to be inserted. On a publisher's site. Uh, or whatever site podcast, content. So that's what an insertion order is. And my insertion order. Has just like a few things. Uh, that. I think would, are helpful to define in the relationship. So. My insertion order has who's the publisher and who's the advertiser. The date, the insertion order was drawn The placement and conditions. The cost per episode, the final Any discounts and then the total. So this is kind of like a rehash of the invoice. It has the campaign start date. And then it has the add dates and terms. So it'll say something like sponsorship will run for 12 episodes starting on January 6th or whatever. That's when this insertion order that I'm reading. Uh, happened to start. Um, and the dates listed below, and then I listed the dates. After that I have, the spots will run between the 10 and 30 minute mark of each episode. That's maybe too much detail dates could also be too much detail. Like if, you If you don't publish on a regular schedule. Or you have. Certain other obligations, maybe you don't want to put the exact dates, but I put the exact dates. Um, cause that. Helps the advertiser kind of understand. When they're when their ads are going Uh, then I mentioned all of the things I included in a most likely custom package. And then I have the payment terms. So, you know, payments should be done upon there. See if you don't pay within X amount of days. Uh, this will result in start date, adjustment or cancellation. I have that. Because I've had people say, yeah, we totally want to do this. And then they don't pay me. And I either don't run the ads, but haven't sold those ads or I've run some ads and didn't get paid for them. So. Um, I'll say invoicing is done is to be done and paid for before the start of the campaign, et cetera, et cetera. Uh, two signature lines. So that's an insertion It's really very simple. Some things I don't include and I don't recommend. You include in assertion in an insertion order. Unless you're charging CPM is how many downloads you'll guarantee you should never guarantee a certain number of downloads. Uh, if you are not doing, if you're not selling CPM, which is cost per milli, which is basically the cost per number of thousand downloads, right? So if you say this is going to get 10,000 downloads, Uh, so that'll be 200 bucks and then it gets like four downloads. Fine. I never charged. See. I never charged per CPM. And I never guarantee downloads there's one time I did it and I regret it. I'll talk, I'll talk about that in a minute. Uh, so. That's really the main thing I don't like don't make any real guarantees except for yes, you are buying this number of ads. Paying ahead of time guarantees. You'll get this number of ads. In the show. Any other terms you want to work out with the brand, you can do that. You know, sometimes. A brand will want first right of refusal. I offer that anyway. So basically I'll say like, Hey. If they do a long campaign, like, Hey, you did a long campaign. I'm going to renew. Do you want to re up. Is sort of what I'll do there. I talked about that on last week's episode, episode 2, 1, 2. But I, I won't even, unless they pay extra, I won't even guarantee exclusivity. Again, that's another mistake I made. And then I, I ran competitors. Uh, unbeknownst to me competitors against one another. Right? So one of the things I do is if, if I guarantee exclusivity, Uh, they basically have to buy up all of the ad space so that I can't sell anymore. Right. So, uh, I run three ads per episode or three sponsored spots per episode. If someone wants exclusivity, they have to buy all three spots. That's how they get exclusivity. Um, And, uh, and then as far as like adjacent episodes go, I don't, Auntie that like, I'm just. You get, if you want exclusivity, All of the ad space for this episode and that's it. Um, Or first, you know, if they want six months and they have to buy. Six months worth of all three episodes. Like that's just kind of how it works for Um, So maybe if you're interested, we could talk in a future episode about like my philosophy on running competitors in episodes. I've thought about this. I haven't had to do it yet, but I'm open to it. So. Again, I don't eat. I don't usually use a contract. I used an insertion order. It's a lot clearer. The terms are a lot simpler. I have had brands present me with. Big contracts for. Running ads on my podcast. These are again, they're giant companies. They're like a well-oiled machine, as far as this goes and they'll write in some of those things, I just mentioned, they want exclusivity. So you can't run competitors. Within within a certain date of when you last ran their ad. That costs. I'm just going to tell you that should cost more If you have to turn away other ads because this other brand wants exclusivity. That costs They also wanted me to guarantee a number of downloads based on what I told them. Uh, they paid CPM. And I had to prove. After 30 days, how many downloads I got. If I didn't meet that threshold or within 10% of that threshold. I had to do, what's called a make good episode. Which means that I basically had to run another ad spot for free. I was very excited because this was like a big name in the space in the podcast. Advertising space. Really. And so I went along with it, but it really kind of bit Because then I ended up running a make good episode. In. An already full episode. Right? So I had four ads, which annoying my listeners. And then I ended up just saying like, you know what, just don't even pay me. And that was the other thing, right. They didn't pay until 30 days after the ad ran. So. I basically went against. Everything. I. Usually do. And it was just a bad experience. So I guess the takeaway here. Is within reason. Stick to your guns. If you want to be paid up front, be paid up front. And if the, if the sponsor walks. You know, maybe you really need the money and you can wait that extra 30 days, but. I get, I get paid upfront unless I already have a relationship with the company. There've been times where like the company says we absolutely don't Uh, upfront. And I say, well, those are, those are my terms. And then they'll usually come back and say like, can we split? Usually can we split? You know, I want to compromise and I, I, I do understand that some companies are big. And have like their own comptroller or whatever, like their own accounting department. And they have these rules. And one of the rules is like you, the invoice gets put into their system. And then they don't cut a check. For 30 days. Someone it has to go up the chain and get signed or whatever. I understand that. Um, And so I will work with companies in that regard. But 99% of I get paid upfront, especially if it's a short I have a minimum of four episodes. If you're doing four episodes, now you got to pay me up front. That's not, that's not enough money. For me to, to break my paid upfront rule. If it's like $20,000. Yeah, I get it. I get it. Some it's like that's five figures. Someone's going to have to approve that. Um, And so if we, if, if we break it up, that's fine. Uh, and usually at that price, it's a long, it's a longer term one, two. Right. So if it's like, You pay me half before we start and then half in two months. We're not even halfway through the campaign at that point. Right. So. Everything up until that point has been paid. So that is, that's my advice. If you're presented with a contract. Again, this is up to you and this is not legal advice. But. You should. You shouldn't bend because of who wants to sponsor you? And generally what I will do is. You've got to pay a lot more for exclusivity. And you need to pay up front. And, uh, I don't guarantee downloads. It's just not something that's within my control. You know, what, if nobody cares about this episode, That's not, that's not what we agreed to. Right. Because the other thing is that I'm not doing dynamically inserted ads. Those ads are going to be there forever. So. Even if you don't get it in the first 30 days, if for some reason that episode blows up and in six months, Everybody's going to hearing your ad anyway. So. That's the other thing. Now, sometimes this has happened to me before, too. Uh, I've been presented with what's called. A master service agreement. So some of these very big companies. I have a blanket. Service agreement that they send to everybody I've seen this mostly. Almost exclusively in the tech space. And it is a very obvious. I'm a former developer. Um, now former, I guess I still develop, but. I used to, to develop professionally. Like that's what I did before I got into podcasting. Um, Andy. This master service agreement. Is very, obviously. For developers. So it'll have like, IP clauses. It'll have on location clauses. It'll have, um, stuff about open source and ownership. Uh, Andy. First of all, that's not, if you, if I'm writing code for a company. Yeah, for sure. It's probably, you're probably, you're going to own that code, right. You are paying me to develop the code for you. You don't own my podcast. Or my YouTube channel. Because you ran an ad in it. Uh, the other thing is that in these MSA is right. Because again, usually it's like a giant company. Hiring a slightly smaller company. They're required to have to carry a certain amount of liability insurance. In these essays. And that's for independent creators like us, like that's just not feasible. So it's frustrating when you get these, right, because it's very obvious that they sent you a boiler plate. And it makes the contract negotiation process longer. But definitely read those things because most of it is not going to apply to you. And your contact. At the company is going to know that. Uh, and, and so my last point here, Is, don't be afraid to redline things. Anything. And again, like you have, you should have a lawyer look over a contractor or whatever. Practically speaking, I don't pay a lawyer to review every contract I get. Um, I just try to eliminate as much as I possibly can that I feel uncomfortable signing. Um, and so don't be afraid to redline things. Most In my experience. Most of the time. Uh, the brands recognize. When something is not applicable to you and they'll allow for the red line. So in, in a recent one, There was the ownership clause. And I was like, you don't own my content. Um, You don't even get licensed to my content. I'm just, I'm mentioning you in my content. Uh, and there was the insurance clause and I red line though. You know, I don't need these. I almost, I almost red line to the. Like on premesis background check. There's like a hole, usually in the, in an MSA and the ones I've seen at least again, I'm I've seen clauses that are like, If you come onto our property. We need to do a background check and we needed to do this and you need to have this. And I'm like, I'm never going to be on your property, but like, because it's like a conditional clause, basically. Usually I just leave that one in there. Um, But again, not a lawyer. So. The overall message here is, do not be afraid to read line contracts you get from brands. I try to have my own insertion order, my own contract that I send over. Some places just require you to have their MSA or their contract. Red line red line. It. Remember, this is about protecting you. And one brand walking away because they have a ridiculous clause. Is fine. I was presented with a contract one time for like an influencer contract. Uh, that basically said I had to write. They paid me per event and they never, it never covered the full cost of me traveling to an event. Uh, and then I had to spend Like most of my free time at their booth at the event. I had to write four pieces of content for them throughout the year. And I couldn't promote any, anything. From their competitors online or offline. And. That is just. Not possible. So I was like, ah, we need to get rid of all of this. And when they said they couldn't get rid of the competitor thing. I said, I got to walk then. And then I signed a much bigger contract with one of their competitors. So. Protect yourself. Most of all. Okay. So let's wrap up on a happy note here, because I know like contracts can be scary and, and. I'm like, uh, I want to be lawyer, but I'm not a lawyer. Um, but I spent like an inordinate inordinate amount of time, like reading about contracts and things like that. Um, Most of the time. A sponsorship for your podcast. Especially if it's below five figures. Is likely. Going to require only an insertion order. I've had five figure contracts or five figure invoices. Where the insertion order was a note on the invoice. Basically saying like, this is what you're buying, right. Because that's, what's happening. We're not entering into a contractor agreement. They are buying inventory from And so that's how I treat it and just like buying inventory. You're telling them what they're And they are paying for it upfront. And if you go in thinking that. You'll get it most of the time. And if you're willing to bend a little bit with the understanding that very big companies. Uh, having net 30 net 60, or even net, I've seen net 90 before. And I'm like, this is not going to work Most companies have these policies. You're the person you're working with will probably be able to work with you in some way, shape or form. Don't be afraid to walk away. All right. That's it for this episode of make money podcasting. If you liked Leave a review on apple podcasts, a rating and review. I will read it on the show. I really appreciate If you have any questions. About this stuff. Or if you want to hear from an actual lawyer, Let me know. And I'll arrange that I have lawyer friends. So, uh, thanks so much for listening to make money podcasting. I really appreciate it for all the show notes you can head over to make money. pod.com/ 2 1 3. And until next time. I can't wait to see what you make