Today I had the chance to talk with Dave Brewer, bus dev director of online video production company PixelFish. The company specializes in local and national brand video advertising, but we spent most of the time talking about local.

PixelFish was founded by CEO John McIntyre, who previously founded Web hosting company Affinity Internet (acquired by Hostway last year). His goal was to take the democratization of Web site hosting and development behind Affinity and apply it to online video. Since then, the overall online video space, local in particular, has clearly followed this trend.

Video advertising, traditionally reserved for big businesses, has come within the grasp of SMBs with cheaper production technologies, online distribution, broadband penetration and killer apps such as YouTube. This has of course led to viewer expectation of video in their search experiences, advertiser demand and the acceleration in video integration by local search sites (Cox’s Kudzu was the latest example earlier this week).

Mixing It Up

PixelFish’s edge is the variety of video styles and formats it offers SMBs. This includes everything from low-cost stock footage to montage (pan & scan), to documentary style (a la TurnHere), to a classic style involving scripts and a mix of formats.

As we’ve argued, the range of businesses in the SMB marketplace makes this variety a necessity. Not only does this cater to different budgetary constraints across the market (PixelFish’s production fee ranges from a few hundred to a few thousand dollars), but Brewer also contends that different categories tend to lean toward different video styles.

Restaurants, for example, like the documentary style for the obvious reason that a camera on-site can capture ambience and food better than stock footage. Lawyers also like it because they’re comfortable in front of the camera, and they want to instill a certain degree of trust or personality in their advertising.

The popularity of the documentary style among these categories has caused IYPs to mostly and singularly focus on vendors that specialize in it (hence TurnHere’s many IYP deals). But some categories — for lead valuation and stylistic reasons — prefer other formats.

“We worked with an exterminator whose business location was nothing but a dirty office and a garage full of insecticide cans,” said Brewer, “so we instead got creative and decided to build his ad around customer testimonials.”

Extending the Grasp

PixelFish is also diversified in its distribution plan, though there is a lot of room to grow. It currently works with a number of channels such as Google Video and Yahoo! Video. These opportunities are growing with universal search, in terms of using video as a hook to attract search engine crawlers and drive traffic to landing pages.

But with the well-known challenge of addressing a large, fragmented SMB marketplace, the company is also pushing hard to build out channel relationships. This includes IYPs, and it is close to finishing a deal with at least one undisclosed player. It also plans to work with trade groups, national chains and local chambers of commerce that can endorse its services to local members (a strategy similar to search marketing provider Market Hardware).

Distribution will round out its value proposition, which is now mostly grounded in a comprehensive production service and platform. In this way, the company is in a position similar to where TurnHere was about a year ago — with a well received video production product that hasn’t yet reached its distribution potential.

The past year has been a busy one for TurnHere, and the next could be equally busy for PixelFish from the sound of its distribution ambitions. It could also have the wind at its back in terms of growing user and advertiser demand for online video and, more importantly, IYP adoption of a more comprehensive mix of video production styles.