Visual 1st Perspectives
December 30, 2020
Framen acquired by Axel Springer –
when “keep-on-pivoting” pays off

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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 frames 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?

Which 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. 

Framen’s connectivity solution did not only enable streaming visual content to a range of different types of devices, but also to stream 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.
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Framen's current product lineup. Click here to expand.
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.
And a few more things...
PhotoRoom. Going Android; raising $. This year’s Visual 1st Show & Tell presenter, PhotoRoom launches its e-commerce focused photo editing app on Android. It also announces it has raised a seed round of $1.2M and doubled its annual recurring revenue to $2 million.

Perfect Corp. Teaming up with Google. More news from this year’s Visual 1st panelist Perfect Corp. after the announcement of bringing its beauty try-on experience to the Snapchat platform mentioned in our previous issue. This time it’s Google, as Google now enables users to virtually try on makeup from selected brands right from their Search results. Google delivers this AR experience with the help of Perfect Corp. (makers of the YouCam apps) and ModiFace acquired in 2018 by L’Oreal). 

Wishing you all the best for 2021!

Hans Hartman

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