Transcript of Jason Arend's presentation on Successfully Monetizing Online Video: A Case Study in Video Commerce. Given March 3, 2010 for the webinar presented by Fierce Online Video and Ooyala.

Cell: 1 (417) 496-6315Email: jasona@pfiwestern.com Or jason@jasonarend.comTwitter: http://www.twitter.com/jasonarendLinkedIn: http://www.linkedin.com/in/jasonarendWebsite: http://www.jasonarend.com

PFI: http://www.pfiwestern.comShopping Western Stye:http://www.shoppingwesternstyle.com

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(Slide 1 - Title Slide)

Good Afternoon. My name is Jason Arend I'm the Director E-Commerce, Global Marketing and Creative Services for all PFI companies. PFI consists of PFI Western Store one of the largest single-store western retailers in the world, Saddle city which is one of the largest equestrian retailers in the country, Diamond Ridge Market which carries a wide variety of wines from around the world including our Private label PFI Family Wines and PFI Family Farms organic foods and cheeses, pfiwestern.com our online retail store and Starlite Theatre in Branson, Missouri where I oversee media and global marketing for Rock & hall of Fame inductee Bill Medley of the Righteous Brothers, The World Famous Platters, The Texas Tenors from America's Got Talent and Montage which is a new Cirque show out of Vegas. And if that wasn't enough too keep me busy I'm also the production director of Shopping Western Style which is our internationally syndicated television show and then also do consulting on a wide range areas including video commerce, media and marketing.

(Next, Slide 2 - View Video Examples at PFiwestern.com)

Fierce Online Video asked me to share a little about the comprehensive multichannel strategy I developed that uses video to successfully drive sales, increase conversions and raise brand awareness for all PFI companies. In just 2 years the success of this strategy has taken our taken our web division from a small 4 man team to a global brand that is now shipping to over 40 countries.

While I give a little history and background information I encourage everyone to go pfiwestern.com and shoppingwestyle.com to explore some of our video content so you have a better idea of what I'll be discussing today. I'll be focusing mainly on Shopping Western Style, PFI Western Store and video commerce at pfiwestern.com.

Video Commerce or Video eCommerce is simply the practice of using video content to promote, sell and support commercial products or services on the Internet.

(Next, Slide 3 - Video Commerce Conversion Rates)

Retailers that have integrated video into their merchandising and marketing strategies online have already seen some fantastic results.

I pulled this data from the Video Commerce Consortium put together by Justin Foster. if you are looking for more information on video commerce I highly recommend reading their content.

As you can see Ice.com was one of the first companies to start using product videos in the product pages of their online store and are seeing on average a 40% increase in conversion rates when you have video on the product page versus product pages without video. ebags.com is seeing a 50%-138% increase in conversion rates, shoeline.com a 44% increase, Zappos has an extremely ambitious video commerce program and they are seeing 6-30% increase in conversions, skis.com a 19% increase, circuit city a 12% increase and onlinegolf.com is seeing an 88% increase in conversion rates.

Now we've taken a very different approach to monetizing online content than the other speakers you'll be hearing today and for that matter a pretty different approach to video commerce than other retailers online. While we have several diverse businesses we are still a fairly small family owned company so finding innovative ways to stretch our resources is extremely important to our continued success.

About 2 years ago we were looking at creative way to stay aggressive with our marketing efforts to reach new customers and increase band awareness during what we knew was going to be a tough economic period. So we decided to purchase air time on a niche cable & satellite network called RFD-TV that boasts about 40 million subscribers and provides programming aimed at rural america directly serving the agriculture and equestrian communities.

So this is very much the core customer base for PFI Western Store, I'm not sure you could find a more targeted audience in this case.

We created a sort of western home shopping show that features the latest in boots, saddles, home decor and western fashion. It is extremely important that we keep the show as down to earth as possible so we shoot everything in-house, unscripted, using representatives from our manufacturers and in-store product experts as talent. Often the product designers themselves come on to talk about how the product was developed to directly improve the lives and activities that are relevant to the customers lifestyle. We use the show primarily as a direct sales and merchandising tool which has worked really well for us and were seeing even better results when we have more educational and informational content so we are now producing other types of web only video such as product fit guides and product care how-to's that are embedded directly in product detail pages. We've now taken Shopping Western Style on the Road as well for our "American Made Tour," which is a series showcasing products we sell that are made right here in America and presenting fun, educational tours of their factories and some of the remarkable handcrafted products that they produce. This has worked really well with this type of demographic and that's actually what I'm working on today here in Texas. I had to take break from filming for a few minutes and find a quiet office in this manufacturing plant to jump into the webinar.

One of the fears that many companies have when considering to the enter the online video game is cost. Being a small company we needed to find a way to make the show cost effective, If you don't know what you are doing costs can spiral out of control very quickly but if you play it smart you can spend very little and produce some really good returns.

By building close partnerships with our manufacturers we've been able to cover almost all production and airtime costs using CO-OP and advertising dollars. These partnerships have been crucial to our success, not only does is cover it costs but by working closely with them we've been able to make Shopping Western style an important part of their promotional and product launches, allowing us to be the first to show the latest product and really brand ourselves as the authority on the western industry and lifestyle.

Now once I had the production workflow for the television show running fairly efficiently I knew it was crucial to find ways to utilize this content online. At that point we already had the content but we literally had NO budget to build and carry out our online video strategy.

(Next, Slide 4 - Interesting Facts)

And by no budget I don't mean $10,000 or a $1,000 I mean absolutely 0 dollars. So I really had to get creative, In about 3 months, on top of our normal work load, we were able to build a massive branded video commerce website developed completely in-house by myself and my programmer, Myke Bates. utilizing open source technologies such as Wordpress and Flowplayer and integrating them with our existing ecommerce platform. Again, production, photography, design, development, everything is done in house, nothing is outsourced, and I think we've really built a unique, enjoyable shopping experience that is useful to the customer.

Anyone thats met me or has seen me speak before knows that I'm not even close to being a cowboy and one of the things I've learned as I've tried to get a grip on this industry is that a good part of the customer base is several years behind on technology, actually 37% of our online visitors are over the age of 50 and from a rural environment so they are still very nervous about purchasing and divulging personal information online. That is all starting to change, having the same product experts you would find in our store demonstrating our products online has allowed us to give our website personality, give it a human face and build trust with the customer where we can now present cutting edge technologies in a friendly, enjoyable way that is relevant to them. Video is the one tool that seems to be resonating across all age demographics for us online.

(Next, Slide 5 - State of PFI's Video Commerce Program)

We now have over 70 full 26 min episodes of our television show and and about 600 pieces of unique video content currently online. On average we are seeing a 50% increase in conversion rates on products that have video and a 29% reduction in returns. On a few products we've seen conversion rate increases as high as 300%. We are also seeing Increases in average order value, increase in return visits and longer average time on site. Nearly a quarter of our daily visitors viewing on-site videos. It has completely changed the way we think about online merchandising and customer engagement. I really wish I could share more of analytics like our impressive increases in revenue and profits but the company would like to keep them private.

(Next, Slide 6 - Multichannel Video Strategy)

Now as I said before it is really important that we stretch out resources as far as we can , to increase reach and visibility there are many channels in which we repurpose video to maximize return. We have the television show and that content is transcoded for use in our branded shopping western style video website, then into product pages, landing pages, syndication to video sharing sites, social networks, rss feeds, we are now using video in the majority of our email campaigns and seeing 2 -3 times the click throughs when supported by video. We also syndicate to the iTunes store as a podcast where our customers can subscribe to the show for free and and sync it to there ipods, iphones or itunes compatible mobile devices and we are using video in several other areas as well.

Lately we've been working on ways of increasing customer interaction by encouraging our customers to share stories and testimonials online then use them in the show and have started a new program called "Ask the Experts" where we take questions from our viewers and answer them on the television show really to further position ourselves as the authority on the western industry and lifestyle and to create an ongoing dialog with our customers.

Since the very beginning of the show we have been syndicating all of our video content to about 10 of the top online video sharing communities. This is the one area that has been the least effective in driving traffic to our site. Users really aren't looking directly for our type of content on youtube. But we have automated and streamlined our workflow enough that it is not costing us anything and it still helps with brand visibility and SEO.

(Next, Slide 7 - Video SEO Results)

The SEO benefits are one of the most attractive aspects of using online product video not only are we starting to see substantial increases in our organic rankings but we can absolutely dominate the video search results in google, often taking up 9 of the top ten results for various related keywords. And in Bing & Yahoo our content is often taking up over 90% of the video search results on the first page for targeted keywords!

If you are not familiar with video SEO I would highly recommend a recent Ooyala Webinar specifically on Video SEO. And Mark Robertson's site reelseo.com

One downside to using video content that was originally targeted to a television audience is that it doesn't quite follow best practices for online product videos and we will be rolling out a ton of new content that are short 30-60 sec product walkthroughs made specifically for the web with less fluff than what's necessary for the television show. They are actually very similar to what Zappos is working on but with more emphasis on lifestyle.

It isn't just online that we are seeing substantial increases in traffic and sales. Out Store is very much becoming a tourist destination in and of it self. I came up with and developed with Myke Bates an in-store Kiosk system that aids in customer data acquisition and allows us to track what triggered the customers to come into our store, what products they are interested in and what advertising efforts are working. We found that nearly a third of visitors coming to the store in the last 6 months are coming from watching the show on television, And another third are coming from seeing us online. After I broke down the kiosk users addresses into latitude and longitude I found that the average customer is traveling over 300 miles as the crow flies to come to our store, and obviously the actual distance travelled is greater than that. But this number absolutely blew us away

While we are extremely happy with state of our current video strategy there are many new areas I'm currently exploring as we move forward, from infrequent Video MMS advertisements to text message subscribers, iphone and mobile applications, interactive in-store videos or product videos triggered by RFID tags on the product in the brick and mortar stores, augmented reality to create virtual mirrors, and an all encompassing interactive video shopping experiences through touch-enabled devices. Existing and emerging multi touch technology such as a iphone, palm pre or the long rumored apple tablets are providing us channel in which to step beyond our existing front-ends, simplify our UI's and navigation and provide a more engaging experience for our users. interactive video on these devices is what interests me the most.

Surprisingly despite our customer base being several years behind on technology 4.5% of the visitors to pfiwestern.com are using mobile devices to view it. 3.6 % 96% of those mobile devices are iPhones. So we are moving forward a little faster on mobile video commerce than what might be nessacary for most retailers.

(Next, Slide 8 - Closing Title Slide)

Video is very much the future of ecommerce and in many ways the web as a whole. It is important that retailers start planning now on how to integrate video into their overall online marketing strategies, before they fall behind. As I said before, our main goal was to increase brand awareness and reach new customers and we are now shipping to over 40 countries coming out of our strongest year ever.

Thank You.

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Transcript of Jason Arend's presentation on Successfully Monetizing Online Video: A Case Study in Video Commerce. Given March 3, 2010 for the webinar presented by Fierce Online Video and Ooyala.

Cell: 1 (417) 496-6315Email: jasona@pfiwestern.com Or jason@jasonarend.comTwitter: http://www.twitter.com/jasonarendLinkedIn: http://www.linkedin.com/in/jasonarendWebsite: http://www.jasonarend.com

PFI: http://www.pfiwestern.comShopping Western Stye:http://www.shoppingwesternstyle.com