From Photo Frame to Media Empire?

Remember Framen? This German startup’s CEO, Dimitri Gärtner, did a Show & Tell presentation at Visual 1st two years ago, showing his company’s digital frame photo viewing solutions. To my surprise, I learned a few days before Christmas that a company no less than Axel Springer had just acquired the majority of Framen’s stock.

Really, a multibillion-dollar global technology and media empire went through the efforts of acquiring a digital frames startup?

This raises the question: is Framen actually still a digital frames company, as it was at its conception 2.5 years ago? Or has it since morphed into a photo/video streaming company, aka become a Spotify for Visuals? Or a digital signage SaaS company? Or is it now an online advertising platform that challenges the advertising hegemony of Facebook? Crazy as it sounds – the latter is more like it at the moment.

Let me walk you through Framen’s transformations, fresh from catching up with Dimitri last week.

Framen started its life by selling supersized monitors to consumers and businesses for use as digital photo frames. In reality, Framen’s real IP was to stream photo slideshows to any device. For those devices that had no internet connection (such as plain monitors or most legacy TVs), it bundled its own internet-connected Framen TV Stick, a device similar to Apple TV or Google Chromecast, but also capable of connecting with out-of-home web servers.

Not only did Framen’s connectivity solution enable streaming visual content to a range of different types of devices, but it also streams the same content to many devices at the same time. Think of having the same slideshow shown on all 500 monitors in all lobbies of a globally operating hotel chain.

So it was only a natural pivot to shift focus from primarily B2C to primarily B2B and develop a SaaS model for selling the company’s streaming and visual content management solutions to these businesses.

But then, how do you convince these multi-location businesses, such as hotels, gyms, retailers, banks, student unions, or co-working spaces, to pay for having their content streamed to their venues? That proved to be a too hard nut to crack for a small startup with just a few salespeople.

Well, Framen pivoted again, this time by offering their “Digital Signage Plus” streaming solution on a freemium basis, serving the service for free along with advertisements, as an alternative to a paid streaming service without ads.

While the free version sounded great on paper, it didn’t fly, according to Dimitri. His clients said, “Thank you very much – but why are you the only ones making money from serving ads to our customers?”

Return to the drawing board,  yet again.

This customer feedback inspired Dimitri and his team to return to the drawing board,  yet again, and search for a different business model. They figured that if they could be super smart about selling advertisements, their ad revenues could more than enough justify sharing revenues with their customers.

Hence, the team developed a sophisticated open advertising platform that allowed for similar – and in many ways – better micro-targeting than Facebook’s ad platform while avoiding the type of regulatory, advertiser, and customer concerns that Facebook is currently battling. Want to run a campaign focused on tech-savvy millennials in Europe’s largest cities? Run your ads in the WeWork lobbies in the cities you’re after. Seeking health-conscious enthusiasts for your new energy drink? Show your ads in all partner gyms in the cities of your choice.

By delivering ads based on data such as geographic location, viewing time of the day, extrapolated demographics, and various identifiable interests and behavior, Framen succeeded in delivering micro-targeted commercials without needing to gather privacy-sensitive personalized information.

• (Illustrative for the importance of this, note the current feud between Facebook and Apple, as Apple is going to require its mobile users to “opt-in” to accept third-party tracking of their digital activity rather than its current “opt-out” policy. Facebook relies heavily on tracking personalized activity to target its ads. Hence it is fighting this policy change tooth and nail.)

Framen’s micro-targeting advertising platform for digital signage drew the attention of Axel Springer. Through APX, an accelerator jointly owned by Axel Springer Digital Ventures and Porsche Digital, it first invested in Framen in 2019. As an accelerator, APX also provided getting-off-the-ground services to Framen, such as access to Axel Springer’s advertising network and some level of initial sales support.

The result? Within 1 year after Framen’s pivot to its advertising-supported digital signage service, Framen already delivers 1 billion advertising impressions annually, even though the service is still primarily only offered in German-speaking countries and the UK.

What’s next now that Framen is part of Axel Springer?

Many things, of which Dimitri is willing to disclose two. First, the most obvious market expansion will be the US, leveraging the extensive relationships and sales support of the globally operating Axel Springer corporation (for instance, Business Insider is owned by Axel Springer). Second, Framen plans to broaden its targeted content to complement their customers’ own content and the Framen-facilitated advertisements/commercials.

A natural adjacent expansion made possible by being under Axel Springer ownership is offering targeted video content (sports, entertainment, politics, etc.); another way to make their service more attractive is streaming visual content provided by partners, for instance, photo communities.

Stay tuned! It will not be the end of their pivoting.