Mobile Mapping App Waze on the Road to Revenue With Ads

Image courtesy of Waze

The ads on Waze's mobile GPS app can show up when the user drives by a business.

Waze, the free mobile mapping app with 30 million users, is ready to make some money by showing advertisements to drivers.

Starting today, people using Waze on a smartphone will see pins showing logos for Dunkin’ Donuts, Jamba Juice, Wyndham Worldwide hotels such as Ramada and Days Inn, and other locations. No more than three sponsored pins will show up on the screen at any given time, alongside the roadwork warnings, traffic alerts and driver avatars that populate the Waze world, said Chief Executive Officer Noam Bardin.

The drive toward ads comes after Waze had experimented with various types of revenue models. Waze is known for its refined driving directions based on information from users currently on the road, but an attempt two years ago to sell the crowd-sourced traffic reports proved not to be a viable business, Bardin said in an interview.

Similar to advertisements on the web, ads have become a popular business in mobile apps, but the implementations are often different.

“Having banner ads on mobile is like the concept of taking newspaper ads and throwing them up on the web, and hoping it will all work out,” Bardin said. “This is a way of taking billboards, where people are driving by, and making them digital.”

Waze still offers some of the data contributed by its users to partners, including Apple, though it no longer sells that information, Bardin said. He declined to comment on the details of the arrangement with Apple.

Tim Cook, Apple’s CEO, gave the mapping startup a leg up in September in a letter apologizing to customers for Apple Maps. Cook recommended Waze, along with two other apps and two websites, as alternatives for people who are dissatisfied with Apple’s software.

Integrated ads are an effective way to monetize the increased traffic coming into the Waze system, where users spend an average of 7 hours and 20 minutes a month, according to the company. Waze has 10 of its 90 employees focused on this effort full time. The Palo Alto, California-based startup plans to provide users with more tailored advertising based on a person’s demographics data from Facebook or the ads they’ve clicked on, Bardin said.

Waze’s advertisements can include coupons, which present themselves when the app recognizes the user driving past a particular store. The latest version of the app has an inbox for organizing deals a user has requested.

“You have no reason to walk around with your Groupon app open,” Bardin said. “If you’re stopped at a stop sign and close to an offer, we’ll push it to you.”

Of course, given how easily drivers can get annoyed, Waze will need to steer clear of pushing too much, at the risk of users taking an alternate route to mobile mapping.

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