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 of serving ads to our customers?”
This customer feedback gave inspiration for a different business model for Dimitri and his team and to go back to the drawing board yet again. 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? Simply 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 has 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 on an annual basis, even though the service it 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 is planning 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.