Can HoneyShed Get Down to Business?

NEW YORK From its inception, HoneyShed has been a creative project. Droga5 creative chairman David Droga dreamed it up as a way to marry the straight sell of QVC with the stylishness of MTV, along with a heavy dollop of sexuality. Now, after a year of fits and starts in testing, the site has launched with an aggressive push to consumers and ambitious audience growth goals.

For all its claims to be breaking new ground, HoneyShed is faced with a daunting task familiar to any Net startup: building an audience and advertiser base during a time of economic tumult.

“We need to move from a creative enterprise to a creative business,” said Steve Greifer, the Digitas promotions executive veteran hired as HoneyShed CEO this August. “We need to attract paying advertisers to have a dialogue with our audience.”

First and foremost is building an audience, without which HoneyShed has little chance of matching the expectations for the unusual partnership between Publicis Groupe, Droga5 and production firm Smuggler. Its yearlong beta period provides scant evidence that HoneyShed can attract its target: 17-27-year-old consumers steeped in popular culture for whom shopping is a national pastime. The dominant Internet measurement services, ComScore and Nielsen Online, did not detect a large enough audience to measure. According to Compete, HoneyShed never drew more than 7,000 visitors a month.

In the hopes of remedying this, HoneyShed is kicking off a three-month online marketing campaign that aims to have at least half of the target audience know the site. Scott Witt, a creative director at Droga5, is leading the effort and he believes it is critical HoneyShed establish its unique brand. The idea is to “celebrate the sell” by making products the star of segments. During all video segments, users can add products to their “stash” for purchase.

HoneyShed needs to attract a large enough audience and a high rate of transaction — no mean feat for an endeavor that’s tough to nail down. It’s equal parts e-commerce, entertainment and voyeurism.

The newness of the concept hasn’t stopped HoneyShed execs from setting ambitious goals. Projections call for the site to reach 550,000 visitors per month after launch, 1 million by February and 2 million at the end of 2009. All told, HoneyShed promises advertisers it will generate 9 million content views in that time.

“The small audience that experienced it liked it and it drove sales and leads,” said David Kenny, managing partner of VivaKi and the Publicis exec who recruited Greifer. “The problem was the audience is far too small. There just weren’t enough people and in turn you couldn’t get real advertiser commitment.”

Its programming is undeniably unique. Young, attractive hosts unapologetically hawk products in offbeat, sometimes bizarre sketches. Some have praised the effort as a bold attempt to integrate brands with content, while others have found the programming strange.

Greifer admits HoneyShed made mistakes in its initial execution that it’s now correcting. One common pitfall it stumbled into: thinking too site-centric. In a world moving to distributed content, HoneyShed acted too much like a video portal, Greifer admitted. It is now distributing its videos widely, striking deals with Glam Media and Heavy to run it across their networks. HoneyShed is also in talks with MSN to distribute the programming. This only makes sense, Greifer said, since unlike most videos, HoneyShed’s content is the advertising.

Another mistake HoneyShed cops to is less than ideal user experience. In a world of 90-second YouTube clips, HoneyShed segments often ran well over five minutes. The new version pares that down to a more bite-size minute or two. HoneyShed also programmed content for visitors, playing a video immediately when they arrived rather than allowing them to figure out their own interests — a major violation of the on-demand ethos of the modern Web. It is also reaching into the social Web, allowing users to post their stashes on Facebook profiles, for instance. It is also adding a user-generated channel.

Finally, HoneyShed is slightly pulling back on its edginess. Gone are the frequent F- bombs from segments, though “shit” stays. Brands are unlikely to go that far, even when attempting to attract a young audience.

“It’s played well to the New York and L.A. audiences,” said Witt. “It has that [Brooklyn] 718 sensibility to it. The types of brands attracted to it are those in Urban Outfitters.”

The one calling card Greifer does not want to curtail: its sex appeal. A typical HoneyShed segment would feature two attractive young female hosts with minimal clothing discussing things like disposable panties. This, Greifer insists, is a major part of HoneyShed’s appeal to both sexes.

HoneyShed has enticed several advertisers to take a chance on the service. So far, 150 brands have signed up to try it from beta through the launch. HoneyShed will produce segments for their products that it will use to populate its eight channels devoted to topic areas like fashion, gadgets, DVDs and beauty. The company is offering advertisers packages with their own product segments and channel sponsorships. HoneyShed allows advertisers to keep and reuse the content on their own sites and elsewhere.

Puma is promoting eight products through HoneyShed, including a bag equipped for carrying pets, jackets and shoes. While it is paying a flat fee for the program that runs until the end of the year, the ultimate success of HoneyShed will be offering advertisers performance-based pricing based on sales generated, according to Barney Waters, vp of marketing at Puma.

“We’re not going into this to break even,” he said. “We’re looking for a return.”