The Profitable Podcaster

Do You Need a Contract for Podcast Sponsorship?

Contracts can be a scary and confusing thing…especially when the relationship is strictly ad placement on your own podcast. Listener Erin recently wrote in to ask about podcast sponsor contracts, and while I am not a lawyer, I’m happy to share my own experience.
In this episode I: 

  • Answer if you actually need a contract
  • Go over what an Insertion Order is
  • Talk payment terms
  • Cover what to watch out for
  • Tell you it’s OK to redline. 

It’s a good one, and I’d love to hear your feedback! If you’d like to hear from an actual lawyer, let me know.

Disclaimer: I AM NOT A LAWYER and this doesn’t constitute legal advice

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Hey everybody, I’m gonna 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 this.

So listener Erin wrote in and she asked about a contract for sponsorship. She said that she’s been getting requests for sponsorship. Congratulations! And she was looking for a template for a contract for sponsorships. 

Now, I will say, I would recommend that if you run a business, you should have a lawyer or a lawyer friend who you can ask questions to. I ran this by my lawyer several years ago, but I don’t use a contract. I use an insertion order. 

And so in today’s episode, I’m going to talk about 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 gonna talk about today on Make Money Podcasting.

Hello, and welcome to Make Money Podcasting, where I teach you how to make your first $10,000 with your podcast. On this show, you’ll learn tried and true methods to increase your revenue and turn your podcast from a money pit into a money maker.

Hi, I’m your host, Joe Casabona, and my podcasts have been making money from day one without a lot of downloads. I’ll share everything I know with you 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? 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. 

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 or whatever site podcast content. So that’s what an insertion order is. And my insertion order has just like a few things that I think would be helpful to define the relationship. 

So, my insertion order has who’s the publisher and who’s the advertiser. The date the insertion order was drawn up, the placement and conditions, the cost per episode, the final price, any discount, 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 ad 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 happened to start. And the dates listed below, and then I listed the dates. After that, I have the spots that 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 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 because that helps the advertiser kind of understand when their ads are gonna run. 

And 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, payment should be done upon your receipt. If you don’t pay within X amount of days, this will result in a start date adjustment or cancellation. I have that because I’ve had people say, “Yeah. We totally wanna do this.” And then they don’t pay. 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, I’ll say invoicing is to be done and paid for before the start of the campaign, et cetera, et cetera.  Two signature lines. 

So that’s an insertion order. It’s really very simple. Some things I don’t include and I don’t recommend you include an 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. If you’re not selling CPM, which is the cost per milli, which is basically the cost per number of thousand downloads, right? So if you say this is gonna get 10,000 downloads, so that’ll be 200 bucks and then it gets like four downloads. Fine. I never charge per CPM and I never guarantee downloads. There’s one time I did it and I regret it. And I’ll talk about that in a minute. So that’s really the main thing.

I 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 wanna work out with the brand, you can do that. You know, sometimes a brand will want first write 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 wanna re-ad” is sort of what I’ll do there. I talked about that in last week’s episode, Episode 212. But unless they pay extra, I won’t even guarantee exclusivity. Again, that’s another mistake I made. And then I ran competitors unbeknownst to me, competitors against one another, right? So one of the things I do is if I guarantee exclusivity, they basically have to buy up all of the ad space so that I can’t sell anymore, right? So, I run three ads per episode or three sponsor spots per episode. If someone wants exclusivity, they have to buy all three spots. That’s how they get exclusivity. And then as far as like adjacent episodes go, I don’t guarantee that like I’m “ If you want exclusivity, you buy all of the ad space for this episode and that’s it.” 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 me.

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 usually use a contract. I use 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 a certain date of when you last ran their ad. That costs, I’m just gonna tell you, that should cost more money. 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. 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 me because then I ended up running a make episode in an already full episode. Right? So I had four ads, which are known to my listeners. And then I ended up just saying like, “You know what? Just don’t even pay me. And this was the other thing, right? They didn’t pay until 30 days after the run. 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 wanna be paid upfront, be paid upfront. And if the sponsor walks, you know, maybe you really need the money and you can wait that extra 30 days. But I get paid upfront unless I already have a relationship with the company.

There have been times where like the company says we absolutely don’t pay upfront. And I say, “Well, those are my terms.” And then they’ll usually come back and say like, “Can we split?” Usually, you know, I want to compromise and I do understand that some companies are big and have like their own controller or whatever, like their own accounting department, and they have these rules. And one of the rules is like, the invoice gets put into their system, and then they don’t cut a check for 30 days. Someone has to go up the chain and get signed or whatever. I understand that. And so I will work with companies in that regard. But 99% of the time I get paid upfront. Especially if it’s a short run,  I have a minimum of four episodes. If you’re doing four episodes, Nah, you gotta pay me upfront. That’s not enough money for me to break my paid upfront rule. If it’s like $20,000, Yeah. I get it. Some it’s like that’s five figures. Someone’s gonna have to approve that. And so if we break it up, that’s fine.

And usually, at that price, it’s a longer-term one too. 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 made. 

So 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 shouldn’t bend because of who wants to sponsor you. And generally what I will do is you’ve gotta pay a lot more for exclusivity and you need to pay upfront. And I don’t guarantee downloads. It’s just not something that’s within my control. You know? What If nobody cares about this episode I put out? That’s not what we agree to, right? Because the other thing is that I’m not doing dynamically inserted ads. Those ads are gonna be there forever. So even if you don’t get it in the first 30 days, if for some reason that episode blows up in six months, everybody’s gonna hear your ad anyway. So that’s the other thing. 

Now, sometimes this has happened to me before too, I’ve been presented with what’s called a Master Service Agreement. So some of these very big companies have a blanket service agreement that they send to everybody. I’ve seen this mostly almost exclusively in the tech space. And it is very obvious. I’m a former Developer,  (not former, I guess) I still develop but I used to develop professionally like that’s what I did before I got into podcasting. And 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 stuff about open source and ownership.  And first of all, that’s not… if I’m writing code for a company, Yeah. For sure you’re probably, you’re gonna own that. 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. 

The other thing is that in these MSAs, right, because again, usually, it’s like a giant company hiring a slightly smaller company. They’re required to carry a certain amount of liability insurance in these MSAs 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 boilerplate 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 gonna know that. 

And so my last point here is don’t be afraid to redline things. Anything. And again, like you should have a lawyer look over a contract or whatever. Practically speaking, I don’t pay a lawyer to review every contract I get.  I just try to eliminate as much as I possibly can that I feel uncomfortable signing. And so don’t be afraid to redline things. Most of the time in my experience, most of the time, brands recognize when something is not applicable to you and they’ll allow for the red line. 

So in a recent one, there was the ownership clause, and I was like, “You don’t own my content. You don’t even get licensed to my content. I’m just mentioning you in my content.” And there was the insurance clause and I redlined those and I said, “I don’t need these.” I almost redlined like an on-premises background check. There’s like a whole, usually, in an MSA, the ones I’ve seen at least (again, I’m not a lawyer) I’ve seen clauses that are like, “If you come onto our property, we need to do a background check and we need to do this. We need to have this.” And I’m like, “I’ve never gonna be on your property.” But like because it’s like a conditional clause, basically I usually, I just leave that one in there. But again, I’m not a lawyer. 

So the overall message here is do not be afraid to red-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 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 that basically said I had to write, they paid me per event, and they never, it never covered the full cost of my traveling to an event. And then I had to spend time, 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 anything from their competitors online or offline. And that is just not possible. So I was like, 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 gotta 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 I’m like a wanna-be lawyer, but I’m not a lawyer. But I spend like an inordinate amount of time, like reading about contracts and things like that. Most of the time a sponsorship for your podcast. Especially if it’s below five figures, is likely going to require only an insertion. 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 me. And so that’s how I treat it. And just like buying inventory, you’re telling them what they’re buying 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 have net 30, net 60, or even…I’ve seen net 90 before and I’m like, this is not gonna work for me. 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 it, leave a review on Apple Podcasts. So rate and review. I will read it on the show. I really appreciate it. 

If you have any questions about this stuff or if you wanna hear from an actual lawyer, let me know and I’ll arrange that. I have lawyer friends. 

So,  thanks so much for listening to Make Money Podcasting. I really appreciate it. For all the show notes, you can head over to [].

And until next time. I can’t wait to see what you make.

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