The offering consists of three ad formats:
- Branded Pins. As the name suggests, these are pins that highlight an advertiser’s storefront on a map.
- Promoted Search. Advertisers can ensure their businesses appear at the top of Waze location search results with these ads.
- Zero-Speed Takeovers. These “digital billboards” take over the top third of the Waze app’s screen when drivers are stopped.
All ads are served based on users’ proximity to the advertiser’s location. Waze also factors in users’ history when determining which ads to display.
Waze Local’s dashboard provides real-time data related to user engagement with ads, such as impressions, navigations and info button clicks.
Ads are sold on a CPM basis and advertisers can use Waze Local without any long-term commitments. The company has created two packages for advertisers. A Starter package, which Waze says is appropriate for businesses with one to 10 locations and allows advertisers to use Branded Pins and Promoted Search, has a minimum spend requirement of $2 per day. A Plus package, which offers a dedicated account manager, support for time scheduling, and access to the Zero-Speed Takeover format, starts at $100 per day.
Previously, Waze’s ad offerings were available only to larger brands and reportedly came with a hefty commitment of $850 per day, obviously well out of the budget of most small businesses.
Foot traffic over clicks
Waze says that one participant in the Waze Local beta, Kung Fu Tea, was able to drive 5,500 people to one of its 16 locations and that a study it conducted during its beta found that 1,400 businesses saw on average a 20% lift in navigations by advertising using Waze Local. Assuming navigations by and large produce sales, that kind of lift could be very meaningful for many businesses.
Digital channels such as search and social have grown in popularity with SMEs over the years, but many still struggle to convert digital engagement into foot traffic. It’s great, for instance, to have 2,000 followers on Facebook or Twitter, or to have potential customers clicking on search ads, but if revenue events occur offline, getting customers through the door trumps everything else.
A hedge against social?
While Waze’s active userbase of 100m is modest compared to other popular services, it’s not insignificant, especially when one considers that the average Waze user spends 11 hours a month engaging with Waze.
And the timing of Waze’s launch of Waze Local could prove lucky. That’s because the digital advertising ecosystem is reeling from the fallout of the Facebook Cambridge Analytica scandal. While it’s too early to predict what the specific long-term effects of the scandal will be, it’s widely believed that new regulations will be created to crack down on how users are targeted for advertising.
That could make location-based advertising more appealing and encourage Google to invest more heavily in it. Indeed, although Google-owned Waze is run independently from Google Maps, as CNBC’s Jillian D’Onfro noted, Morgan Stanley analyst Brian Nowak believes Google Maps is the “most under-monetized” asset he covers. While D’Onfro suggests that Google’s promoted pins offering has not gained significant traction, increased scrutiny on the creepy targeting prevalent in social could encourage the search giant to invest more heavily in location-based ad offerings like Waze Local.