Now the company is hoping that’s a recipe for serious revenue as it turns on its first location-based advertising platform called Waze Ads. Retailers and brands can pay to insert themselves into Waze’s maps and search results when their locations are on the route of Waze users. So when a Waze user launches the app to navigate to work, home or some other location, they will be able to see ads and discounts from a gas station, restaurant, coffee shop or store pop up on their navigation map. Waze will not show more than three ads on a map at any given time.

Waze said what makes this different from other location-based ads is that it can understand where people are headed because they set their destination, not just where they are at the moment. That allows it to show ads that are relevant to users and only appear along the route towards a destination.

Waze could track where individuals have visited in the past and target ads based on that, but it wants to be careful about that. So it’s using more general group data to serve up what people might want. For example, it might know that a person visits Starbucks every day, but it doesn’t want to serve that person with only coffee ads because it could be creepy knowing that Waze is tracking your every move. But in the future, Waze is looking at how it can layer in more data from users, including Facebook likes and other user behavior.

The company said 20 percent of users already search and navigate to restaurants while in the app, and 15 percent search for fast-food establishments and 10 percent for coffee shops. Waze surveys have also found that more than half of the service’s users routinely make pit stops along their routes, with 30 percent doing so to shop.

Waze Ads is launching in the U.S. with advertisers such as Dunkin Donuts, Circle K MACS, Kum & Go, Wyndham Hotels, Jamba Juice and Procter & Gamble. Some will offer discounts to users, while others can just advertise their location or ask for users to download an app. Waze is looking at employing payment tools to help confirm when a user spends money as a result of seeing an ad impression. It recently integrated with CardSpring to sync offers to debit and credit cards and will look at rolling that out in the future.

The launch of the mobile ad platform follows a test of ads for gas stations in June.

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ThinkNear, which moved to Los Angeles after graduating from TechStars in 2011, is joining Telenav’s mobile local advertising group and will form a new platform for Telenav called Scout Advertising. Now, advertisers will be able to use ThinkNear’s location targeting to reach consumers within 100 meters of any location. But the ads will tap Telenav’s Drive-To Advertising platform to provide browser-based GPS turn-by-turn directions to lead the person to the place that’s being advertised. That’s important for advertisers who want to measure their advertising ROI because they can see if someone arrives at a place after seeing an ad.

ThinkNear began life in early 2011 as yield management tool for local businesses, who wanted to use local mobile ads to drive in people at slow times. ThinkNear tried that route but found it difficult to get enough impressions to deliver to merchants. So it pivoted into a hyperlocal advertising company that aggregated location-based impressions from exchanges, mediation platforms and ad networks.

It also added the ability to do situational targeting, taking into account what consumers are doing nearby, where they are, what the conditions and environment is like around them. ThinkNear now serves dozens of brands and delivers click-through rates four times higher than the average, said Eli Portnoy, founder and CEO.

“I thought this was a fantastic opportunity to combine what we’re doing with what Telenav is doing with browser-based turn-by-turn software. Together, we can reach people at the right time and get them to the store,” Portnoy told me in an interview

Portnoy believes that hyperlocal advertising is proving its worth now and will be a major boost for mobile advertising revenue, which has lagged mobile usage. The company now reaches tens of millions of customers each month with more than seven billion impressions.

ThinkNear, which has 12 employees, has raised $1.7 million to date from Google Ventures, Qualcomm Ventures, IA Ventures and Metamorphic Ventures.

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Location-based ad provider JiWire is trying to capitalize on this opportunity with the launch of a Location Graph that it says will help it deliver relevant ads based on what it can learn from the way people move around from place to place. By understanding the relationship between locations and what it says about the people who frequent them, the Location Graph will help JiWire anonymously identify distinct audience groups, from soccer moms and businessmen to luxury shoppers and tech enthusiasts.

JiWire has a database of more than 3 billion location tags pulled from latitude and longitude information and other data that connects to real places. As the Location Graph pulls in anonymized location data from mobile devices using UDID and other persistant identifiers, it can start to understand where people are visiting with their devices. Then it can map that movement to what it knows about the various locations and the way certain people favor certain places.

This database allows JiWire to go beyond simple targeting based on what app an ad appears in or geo-fencing, which only looks at the general proximity of a user to a location. With the Location Graph, JiWire can better identify a user for an advertiser, who can choose to try to walk them into the store with an incentive if they’re nearby or push out general brand advertising to build awareness. Having a history of where a user has gone can also allow JiWire to push ads from advertisers that are not just nearby at that moment, but are also close by the places where a person has often visited in the past.

JiWire’s interim CEO David Staas said early beta testers, including Microsoft and Comcast, have seen a 30 to 45 percent lift in click-through rates when using the Location Graph. He said the Location Graph shows how mobile advertising can become lucrative for publishers and effective for advertisers.

This reminds me of Sense Networks, another mobile advertising startup that is targeting ads not only based on place but also by the unique behavioral profile of users. The approach is a more sophisticated take on location-based advertising and it means that different users in the same place can get more personalized ads based on who they are and where they like to go. Users, however, have to be comfortable with the fact that companies are gathering anonymous information about their whereabouts. JiWire is trying to allay fears by giving users an opt-out option and also using TRUSTe to handle the user location data.

Here’s a look at some of the connections the Location Graph is able to find between places and people.

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The new real-time gas prices features adds more utility to the Waze app, which is nice, but there are other apps that surface this information. Waze’s appeal is that it has crowd-sourced data, so it might be more accurate in some cases, but it also means the prices might be out of date until someone updates it.

The discount component, however, is more interesting because it really brings a new dimension to the Waze service, letting people not just navigate to the lowest priced option but actually find places that have offers only for Waze users. And it also demonstrates how Waze will make revenue off the free app. The company will be building a revenue model from location-based advertising, allowing certain advertisers to reach its growing base of 19 million users with relevant offers for things along their route.

With the gas program, users will be alerted to nearby discounts on their Waze map. When they go in, they will need to present a coupon generated by the app to the employees inside. That ensures that users will have their coupon visually inspected but it also encourages them to buy something else, which is another benefit for participating gas stations. Waze is not disclosing the exact business details of its advertising deals.

Waze has struck relationships with individually-owned gas stations and regional retailers who own a lot of stations. Vitners, which owns more than a 100 Shell stations in California; Kum  & Go, which has more than 400 stations in the midwest; and Hess, which has 1,300 stations on the east coast, are some of the partners. Five states, including New Jersey, actually prohibit discounts on gasoline, so Waze is looking at offering coupons on food or other items to users in those states.

Waze has been set on not charging its users, which is fitting since users contribute to the service by providing anonymous location data. But as it grows, Waze is turning into a very appealing location-based platform for advertisers. It has a big dedicated user base who can be reached by local offers that are presented in the context of their regular drives.

Waze is hoping that it can turn its ability to lead more users into stores into a significant revenue source. During a promotion for the Nintendo 3DS last year, Waze ran a mini-game that awarded people points and entered them in a drawing when they drove to nearby stores that offered the portable gaming system. Waze said 6.3 percent of its users participated in the program and drove to a store.

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But New York start-up Sense Networks believes it’s got a way to make location-based ads effective by looking not only at place, but matching it to the unique behavioral profile of users. The company has been building a huge database of points of interest around every location, so it can identify what’s nearby when a person provides location coordinates. But it also builds a behavioral profile on people based on hundreds of attributes, so it can match a person’s interests to location-based ads.

The company is putting its know how to use with two new products that are debuting today. AdMatch takes what it knows about a user and pushes out the most relevant local offer or daily deal from a merchant via a mobile banner ad. So a bunch of mobile users in one place will still get different offers and ads tailored to their tastes. What’s smart about AdMatch is that it doesn’t just serve up ads that are nearby at that moment but it also considers the other places that a user likes to go. That allows Sense Networks to find ads that are more relevant to a user. The company said its ads can beat the performance of more “ring-fenced” mobile ads by 4x increase.

The second product, AudienceSense enables larger publishers to build predictive location-based behavioral segments of their users, so they can sell ads against these segments. AudienceSense can identify more than 100 segments such as business traveler or luxury shopper. This means publishers do not have to share their mobile data with other publishers.

Sense Networks works by using a persistant identifier like UDID, which is being phased out by Apple; OpenUDID; or cookies to obtain location information on a user. It anonymizes the data and then builds a profile on what it knows about a person, whether they like golf, go out late at night or travel a lot. David Peterson, the CEO of Sense Networks said the key to good location-based advertising is not only collecting a lot of data on the world, but combining it with a good behavioral profile.

“Other companies are looking at location analytics, but we go beyond place,” said Peterson. “We believe user plus place is better.”

Sense Networks’s ads only work with publishers who can collect location-data. Many apps don’t do that because location is not core to their services. But Peterson believes that over time, more impressions will move to mobile and more of them will be able to use location. Another issue is that demand is still building for this kind of location-based ads. Some merchants don’t know they can target mobile consumers in their area.

But over time, location-based targeting is likely to be the key driver for mobile advertising. That’s a level of context that is unique to mobile and can really help marketers target consumers. We’ve already seen that some advertisers are paying 4x more for location-based impressions. If location-targeting can get more sophisticated and advertisers see more of the value in location-based ads, the trend should only grow.

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PlaceIQ is building an index of profiles on very specific geographic 100-meter tiles of the world. It takes publicly available data, from social information, tweets, and check-ins to cell phone density data, retail information, local events and points of interest and then applies machine learning and sentiment and pattern analysis to create a profile for a specific place that shifts over the course of the day to reflect what kind of people are there.

This enables advertisers to better target mobile users and provide the most contextual and relevant ads based on where they are and what time of day it is. And it allows advertisers to target users anonymously without violating their privacy or tracking them individually.

“We can understand what kind of users are out in an area and know these folks have a  stronger affinity to recreation,” said Duncan McCall, CEO and co-founder of PlaceIQ told me earlier this year. “If you’re a mobile ad network, you don’t want to show the financial workers who live in the town an ad for a rental car. We’re able to connect right people to the right ads.”

The start-up said it has helped a number of customers, including McDonald’s restaurants in one region, to better target their customers. One customer saw a 118-percent increased in click-through rates for their ads that used PlaceIQ.

In addition to moving to New York, PlaceIQ plans to build out its team and product lineup and grow revenue through a number of markets. PlaceIQ raised $1 million earlier this year. As I mentioned before, location-based advertising is hot, with Nexage reporting a nearly 4x bump in ad impression rates for location-based ads. Location-based ads can be very powerful because they attempt to be very relevant to a user’s location. But with the concerns about privacy rising, tools like PlaceIQ can be a way to help push ads without running up against fears about privacy.

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The Dealmap allows users to see local deals from more than 150 sources on a map. The Menlo Park, Calif.-based company has attracted more than two million users and generated more than 85 million monthly visitors for its partners. The Dealmap has distribution agreements with more than 50 partners including Microsoft , CityGrid, Local.com, MerchantCircle, MyPoints, Savings.com, SuperMedia, and T-Mobile.

The company said in a blog post that it chose to be acquired by Google because they share a desire to help save people money and that the search giant is equipped to help accelerate The Dealmap’s growth. For now, it looks like the company will continue to aggregate deals for its partners and provide its core services to users. But we’ll have to find out the long-term plans when the integration work is completed.

The interesting thing will be to see how The Dealmap affects Google’s local deal service Google Offers. It’s an important priority for the company that’s being paired with its near field communication Google Wallet product. As the service expands to more cities, Google will have to show it can continue to source a good volume of deals and maintain engagement with users. The Dealmap was popular for helping people find and discover local deals, and it seems like that experience should be helpful in building a better local discount offering. It was able to get a pull together a lot of deals: more than 400,000 deals and $10 million in savings available each day. That will be important to ensure that Google Offers scales well.

You need to get a good amount of deals to keep people coming back, and they have to be relevant and easy to access for users. Right now, Google Offers is still rolling out with more of a daily deal approach. But as Living Social and Groupon move toward more real-time instant deals, Google will need to step up and get more deals going in a more timely manner.

The Dealmap pick-up won’t address all the challenges ahead for Google, but it’s a sign that it’s still investing in this area and it’s also keeping a good start-up out of the hands of competitors. I thought Microsoft might want to buy the Dealmap after partnering with it for Bing Deals. Now, it’s up to Google to get the most out of its new deal acquisition. It’s not Groupon, but it doesn’t necessarily have to be.

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The Waltham, Massachusetts–based company told me it has hit half a million users on a shoe-string marketing budget since it launched its ecoupon product in April, putting it on a faster initial pace than Groupon and Foursquare. SavingStar is banking on the enduring popularity of coupons and marrying it with smartphones and loyalty reward programs, creating a national ecoupon network that has some impressive reach with retailers.

More than 24,000 grocery store and drug store locations and 100 national chains have partnered with SavingStar, tying their loyalty rewards programs into SavingStar’s digital coupon platform. Users access the SavingStar website, iPhone app, or Android app and connect their account to their local store loyalty card programs. Then when they see a coupon they like on SavingStar, they add that to their account; when they buy the item at a participating store, they use the mobile app to redeem the coupon at checkout and their savings gets applied to their SavingStar account. When a user hits $5 in savings, they can get paid out their money directly to their checking or savings account, PayPal account , through an Amazon gift card, or make a donation to a charity.

Everyday rewards

David Rochon, SavingStar’s CEO, said the power of the program is that it is applying shopping innovation to grocery and drug store purchases, which is much more relevant to users than the typical daily deal.

“Everyone is coming up with a program but most of them are for infrequent purchases. But the category we’re dealing with is the everyday rewards category. It’s about being a part of people’s lifestyle on a consistent basis,” he said.

He said consumers shop at a drug store 2.2 times a week and 89 percent of shoppers visit more than one grocery store a month. By collecting coupons from national brands and manufacturers on a platform that works with their existing loyalty programs and the smartphones many have already, it takes away the mess of clipping coupons or printing out coupons a la Coupons.com. He said a study commissioned by SavingStar found that 79 percent of men think coupons are a good way to save money and 70 percent of respondents under 35 want coupons on their smartphones.

The catch for consumers is that they don’t actually get the discount applied to their bill immediately. It must get processed, which can take a day or two, and sent to their SavingStar account and doesn’t get paid out until a user hits a certain threshold. But consumers are not deterred by that limitation, said Rochon, because they still see it as a tangible reward.

Retailer and manufacturer benefits

For retailers and manufacturers, the case for SavingStar is also pretty compelling. Rochon said the redemption rates of coupons can hit up to 22 percent, compared to 1 percent for traditional print coupons in newspaper. He said there are typically more than 360 billion coupons printed each year, almost all of them appearing in newspapers and almost all discarded. But for retailer and merchants, print coupons adds to the work flow of workers, who have to set them aside, and they also have to be aggregated and counted at some point.

For brands, ecoupons through SavingStar offer not only higher redemption rates and avoid the need for print coupons, they also offer a cost-for-performance model so companies only pay when coupons are redeemed. And it’s an effective way to get people to try a new product. Rochon said 55 percent of shoppers buy 100 products or less. But 85 percent of respondents in the recent survey said they would try another product if they had a coupon for it. Also, SavingStar is also able to help manufacturers craft more complicated offers such as $10 off of $30 spent on specific products, something it can calculate on the back end. That, in turn, can help a brand build a deeper relationship with specific users.

While brands understand that distribution of coupons through newspaper is growing more challenging, they needed a national network to keep offering deals. SavingStar is hoping to be that resource though it will continue to have competition from Coupons.com and others who are moving to more mobile coupons.

“We believe we can take Coupons.com one step further,” he said. “Instead of giving consumers the ability to print out coupons, we’re completely delivering everything digitally and we’re doing it on a national network of retailers.”

Expanding coupons to more users

In the future, SavingStar is looking at incorporating other reward programs so users can apply their savings to hotel or airline points, Facebook credits or gas rewards. The company is also looking in the next three or four months at offering a white label service that a big reward program like a hotel chain or airline can also integrate into their own system. And SavingStar is looking at increasing the frequency of the coupons, many of which are offered on a monthly basis.

SavingStar has got a good start in this space and seems to be leveraging assets like smartphones and loyalty programs well. I think this is a big opportunity that makes sense. People understand the value of coupons and reward programs. And they’re comfortable using their smartphones to find deals and discounts. It’s logical to get them to use their smartphones to apply digital coupons at the point of sale for the kind of purchases they make everyday . The challenge will be to line up more brands and manufacturers so that the coupons are varied, timely and attractive. SavingStar has a team of 10 salespeople, one-third of its overall team, though that will likely have to go up if it wants to attract more companies to its network.

But it has some solid backers including Flybridge Capital Partners, First Round Capital and IA Ventures, who along with angel investors such as Ron Conway have helped SavingStar raise about $10 million to date. The local commerce space is still heating up and there’s plenty of ways to activate more savings for consumers using discounts and smartphones.

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The New York City-based startup, which provides a service that allows users to share their current location with friends, plans to put the money toward hiring more engineers, developing more offerings for merchants, and expanding internationally, co-founders Dennis Crowley (pictured here) and Naveen Selvadurai wrote in a company blog post announcing the new funding. The blog post reads: “The opportunity to build something meaningful in the location space is HUGE [emphasis theirs], and we feel well-positioned to capitalize on it.”

Foursquare has grown by leaps and bounds since its launch in March 2009. The company, which is set to open a new San Francisco office this month, says it currently has more than 10 million users and more than 70 employees. With a growing list of solid competitors in the location-based social networking space — think Facebook and Google, as well as an ever-expanding list of smaller apps such as Trover — the new backing will certainly come in handy as Foursquare works to keep its edge.

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