NEW YORK (AdAge.com) -- Publicis Groupe, citing economic pressures, has decided to shutter its much-watched online-shopping venture Honeyshed just months after it finally got up and running.
The ill-fated creative experiment was the brainchild of David Droga but was birthed through a partnership between Mr. Droga's agency, Droga5, hotshot production house Smuggler and funding from Publicis, which published reports put at about $25 million. Its aim was to reinvent the online-shopping experience to make it more entertaining and engaging for the 18- to 35-year-old-set. Users could digitally "window shop" brands via vignettes in which attractive youngsters peddle products on channels dubbed "Fun Shit" and "Kicks to Lids" before making online purchases.
"It's fine to be optimistic and bold about something that's new in this space, but given the economic climate, the promise of certainty is more responsible than the allure of massive potential," said Mr. Droga.
Mr. Droga began sharing details about the brand portal in spring 2007 to much fanfare, but was quickly met with equal parts of confusion and skepticism from industry observers. A key obstacle was persuading advertisers to buy into the new model, and a sluggish start didn't help.
Honeyshed launched in a very beta incarnation in November 2007, but then took almost a year before calling in former Digitas executive Stephen Greifer to serve as its CEO and officially going live.
At that time, Mr. Greifer told Ad Age that despite the recession, he was optimistic about Honeyshed's success. "In every economic climate, people have disposable income. ... We're not asking people to buy houses and make major investments decisions," he said.
Today, however, Mr. Greifer admits the business challenges were bigger than anticipated. "The economy continued to accelerate in the wrong direction," he said. Honeyshed's prospects for immediate success looked doubtful, "given all the advertisers retrenching and trying to focus on proven avenues of advertising."
Mr. Greifer said the site was getting as many as 20,000 visits a day by mid-December and in mid-January was averaging about 15,000 visitors daily. Honeyshed videos also earned around 10 million views in syndication outside Honeyshed.com.
"Although we were starting to build some strong numbers, we didn't have the metrics history that some of the folks were talking to were asking for," Mr. Greifer said. "It was hard for us to project responsibly for Publicis when we would be cash-positive."
Said Mr. Droga: "Publicis Groupe have been phenomal supporters of this, and they weathered the storm longer than I thought they would have, honestly."
Could be revisited
Indeed, the French holding company demonstrated buy-in to the concept from the very top; CEO Maurice Levy once referred to the venture as the company's "most important creative bet."
"It's a shame because it was moving in the right way, but there's no question that it was a model that probably wouldn't have been in the black for a couple of years," said Mr. Droga, who doesn't count out the possibility of revisiting -- albeit re-tweaking -- the Honeyshed concept in the future, once the economic tides turn. "I still stand by the idea," he said.
"There will be a number of agencies and advertisers that will be disappointed when I tell them we need to wrap up our discussions about Honeyshed," said Mr. Greifer.
The venture did manage to garner limited interest from big-name marketers during its beta-stage, dabbling in work with the likes of Nike and Volvo. Mr. Greifer declined to name those marketing partners with whom talks will be stalled. It's unclear where Mr. Greifer or the seven to 10 full-time Honeyshed staffers out in Los Angeles will land next.
"Both [Vivaki Managing Partner] David Kenny and Maurice Levy have reached out to me and expressed their faith in the Honeyshed ... they are looking for opportunities where I might continue to work with the Groupe," said Mr. Greifer.