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Waze begins monetization push with location-guided ads

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Waze, a crowd-sourced navigation app, has become an important free tool for 30 million users, who spend an average of 440 minutes a day in the app each month. That’s a lot of people spending gobs of time telling Waze where they’re going and what they’re stopping for on their trips.

Waze, location-based adsNow 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 (s sbux) 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 (s fb) likes and other user behavior.

Waze, location-based adsThe 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.

9 Responses to “Waze begins monetization push with location-guided ads”

  1. I think i’d be better served with a “traffic for your route” function. My commute is currently 1-1/2 hrs. Maybe create a home->work based traffic alert function (like the “beatthetraffic” app). I know how to get to work so I don’t use waze as much (kills my battery) .If there is a wreck, I could use that info..

  2. Waze should look to monetize by partnering with radio stations for up to date traffic reports, get someone to sponsor the report (like they do with today’s helicopter based reports) and split the fee. Would be more profitable for both and save on the carbon footprint of flying multiple helicopters over every city.

    • They already started that initiative with Waze TV it allows tv stations and radio stations to use the data for their reporting. With Apple killing google maps I found Waze and it’s 100x better for 3 facts 1) it gives voice directions, 2) it reroutes you around traffic problems, 3) It warns you about things such as speed traps. This app is going to explode in popularity as more people discover it which also means the data will get even better. I don’t mind a couple of select ads while I’m driving as long as they don’t distract and they offer up good offers. The fact is they need to monetize the app or else it will die. I’m always amazed that people get upset when a company tries to make money?!? It’s a free app how do you expect the company to support the app without a revenue stream. I’m sure in the near future they’ll offer up an option a free ad based version and one with an annual subscription. Choose your poison but the fact is that this app and social traffic navigation has real legs.