FedEx bets on long-form Web video

FedEx Corp. last week launched an offbeat ad campaign with agency BBDO targeting small businesses, with online video as its centerpiece. This campaign is part of FedEx’s ongoing efforts to put digital at the forefront of its ad strategy.

“With the conscious strategic shift of having digital at the core of almost every one of our marketing efforts, this was a plank in that platform,” said Steve Pacheco, director of advertising at FedEx.

The “1,2,3 Succeed!” campaign — an infomercial spoof featuring comedic actor Fred Willard — includes rich banner advertising on portals such as Yahoo, general business sites and small-business centric sites. Fifteen-second pre-roll advertising runs on video sites including Hulu with the message, “We understand. You need small business solutions,” and a URL that drives viewers to a dedicated FedEx You Tube channel to “Get Infotained.” There, viewers can screen the longer-form “ads:” five three-minute videos that parody infomercials. The videos are also being promoted on the FedEx corporate site in its multimedia center.

But wait — there’s more. The work also is being seeded on humor sites such as Crackle, Funny or Die, and Video ad networks Tremor Media and Undertone Networks are also being employed.

FedEx, along with rival UPS, has taken a pounding due to overall lower shipment volumes and competitive pricing brought on by the global recession. In the fourth quarter, which ended May 31, the shipper reported revenue down 20% to $7.85 billion compared with the same period last year, while it had a net loss of $876 million, vs. the prior year’s net loss of $241 million.

Pacheco would not comment on spending for this campaign, but characterized it as “in line with some of our integrated campaigns.” He stressed the company will continue to use multiple ad channels, including broadcast TV and sports sponsorships. However, he noted that deploying digital forms of advertising enables FedEx to “be more efficient with our media dollars.”

Online video, and in particular pre-roll advertising, may also be particularly attractive to marketers right now. For example, global CPG brand Reckitt Benckiser recently moved $20 million of its TV spend into online video, as reported by DMNews’ sister title, UK-based Campaign.

Part of the appeal of the channel is low costs. Average pre-roll costs per thousand (CPM) were down by 10.4% in the second quarter of 2009 compared with the same period a year ago, according to Brightroll, an online video ad network. Third-quarter data suggests pricing will continue its downward trend.

Brightroll CEO Ted Sacerdoti said pre-rolls are “overpriced.” The average CPM is around $20. As a direct response vehicle, Sacerdoti said video “is too expensive today.

“We’ve run a lot of campaigns that have some form of direct response metric and it tends to be expensive relative to other online media,” he added. “We’ll see more dollars come in [from direct response campaigns] as the price falls, but I don’t see that happening yet.”

Andrea Kerr Redniss, SVP and managing director, digital, at Optimedia, a media buying agency, said she sees pre-roll CPMs coming down, and that makes the medium more attractive to marketers.

“Marketers are investing in it,” she said. It’s becoming an easier place to put money and a safer place to put money.”

“You have a number of different outlets across the Web to buy long form content. Now that it’s so similar to TV, marketers will begin to be platform agnostic. They want to surround shows like Heroes regardless of where the consumer is watching it.”

She recommends it to clients. “It’s easier for us to say, “you are already buying a heavy schedule around 30 Rock. Let’s also buy that inventory online. It is sold more and more as an integrated package.”

Online video ad spending overall is on a healthy growth trajectory. Spending on video advertising increased 81% to $734 million, according to eMarketer, and a 45% increase is expected in 2009. EMarketer predicts by 2013, online video ads will bring in $4.1 billion in spending. That number includes in-stream (pre-roll and overlays), as well as in-banner and in-text (ads delivered when users mouse over relevant words).

Each of FedEx’s self-referential videos focuses on a specific product or service, such as FedEx Mobile, FedEx International, FedEx Office and

“Long-form allowed us to go into more detail,” Pacheco explained. “You’re able to impart so much more communication.”

Pacheco said online video was natural for the push: “The at-work audience is critical to our success. We know these folks are consuming a lot of video, and lunchtime is the new primetime.” People might work through lunch, he noted, but will also be looking for a diversion on their computer during that time.

Greg Hahn, executive creative director at BBDO New York, said the campaign is a good way to convey a lot of information, the breadth of services FedEx offers beyond shipping, to its target audience.

“We thought that infomercials would be a good medium to get that information across,” he said.

“Online is a different viewing experience than in your home,” he added. “You have competition for the viewer’s attention. The jokes and details (in the videos) are more layered and complex. There’s a need to feed the viewer with entertainment as we move along.

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