Influencer sued for breach of contract: Luka Sabbat is being sued for failing to comply with an influencer agreement. So, what makes a good influencer agreement?
Influencer Luka Sabbat was sued this week for breaching his influencer marketing agreement to promote Snap Spectacles on his Instagram account.
PRC alleges it signed an influencer agreement with Sabbat on September 15 according to court papers filed on Tuesday (30 October 2018) with the Supreme Court of New York.
PRC says the agreement included publication deliverables along with a review policy and a requirement for the influencer to provide post-publication analytics. However, PRC contends the 20-year-old Grown-ish actor failed to honour the agreement.
PRC added in the filings that “Sabbat admitted his default but nonetheless, refused to return any of the funds paid by to him PRC,” and is seeking the return of the $45,000 upfront payment as well as $45,000 in damages, plus interest and attorney’s fees.
No one intentionally enters a new relationship thinking it will turn sour. Both parties of a savvy, professional relationship will agree terms in writing ahead of formalising any work. A written influencer agreement helps clarify any uncertainty and gives both parties something to fall back on if there are any problems.
PRC got it right when defining the deliverables for what was expected to be created and published by Sabbat. According to the court papers, the agreement specified the:
Among other things, Sabbat agreed to create original content for a minimum of four unique posts:
Two of the Story posts were to be in New York, related to fashion shows and parties during New York Fashion Week. One Story post was to be in Milan or Paris, related to fashion shows and parties during Fashion Week.
Additionally, Sabbat agreed to be photographed in public wearing product tied to the 'Spectacles Marketing Campaign' during Milan and Paris Fashion Weeks.
PRC were sensible to include provision for hyperlinks in the agreement: “Sabbat was to include a swipe-up CTA using a provided hyperlink”. Brands and agencies should also consider adding any coupons and promotion details to an agreement along with campaign-specific hashtags.
PRC alleges the agreement included an approval procedure: The court papers state “the Agreement further provided that each post was to be submitted to PRC for review.” Again, this is often a sensible move by brands, especially when working with a particular influencer the first time.
There is a trade-off, however. Influencer marketing works best when it is co-created and the brand relinquishes control; ceding control to the influencer.
Approval procedures can slow down turnaround times, too.
Under the agreement, Sabbat was to provide “PRC with analytics (reach, comments, likes and views for Instagram Stories) within 24 hours of the posting”. This is sensible in order to understand the engagement rates and overall success of the post. Tying an incentive payment to specific engagement or clicks to overall payment would have been another way to ensure good quality - more on this below.
PRC agreed to pay Sabbat through staged, incremental payments. Payment for the completed influencer marketing campaign was to be $60,000 of which $45,000 was paid to Sabbat upon signing the Agreement.
It’s always a good idea to include staggered payment wherever possible. Especially if this is the first time the brand or agency has worked with a particular influencer.
A signing-up payment is a good idea. It would be have been advantageous for PRC to have agreed to pay the balance on:
I would have advocated staggering paying with:
Staggering payment and linking the payment to publication, review and sharing of analytics within 24 hours would have limited PRC’s financial exposure to Sabbat.
Publication and analytics might additionally have been tied to an incentive payment based on engagement rates or swipe-throughs of the hyperlinks.
Sabbat only made one Instagram Feed Post and one Instagram Story post. According to the court papers, he failed to post an additional Instagram story in New York, with a swipe-up link, an Instagram story in Milan or Paris, with a swipe-link, and failed to be photographed in public at least once while wearing Spectacles product.
Tightening the triggers for the payment stages might have reduced PRC's financial exposure from $45,000 to $20,000.
PRC appears to have covered many key points of a successful influencer marketing agreement with is work with Luka Sabbat. I have not seen the agreement, however, and am responding to those outlined only in the New York-filed court papers.
Additional clauses for an influencer marketing agreement include:
I’ve written extensively about the importance of creating an influencer marketing agreement.
$60,000 in return for posting four pieces of content is easy money regardless of age. PRC was right to hope for the best but plan for the worst by ensuring Sabbat signed up to an agreement. The industry needs to professionalise quickly if influencer marketing is to provide the long-term financial gains forecast for both brands and influencers alike. This court case is an important milestone in the maturation of the discipline.
Scott Guthrie works with companies to drive business growth in the social age through strategic insight and technical know-how. That's not giving you a lot of detail, is it? So, read more here.