Get ready to see more ads on Google’s traffic app Waze

Key Points
  • Google-owned maps app Waze will now allow small businesses to buy advertising.
  • Users will start seeing branded pins, paid search results and pop ups when their car is stopped.
  • Businesses can buy ads for as little as $2 per day.
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You're using the mapping app Waze to avoid traffic on your way to work when, at a stoplight, an ad for a tea shop pops up on screen, beckoning you with a 20 percent off deal.

That's the kind of scenario that Waze exec Matt Phillips says users will experience through the company's new Local ads, which launch publicly on Wednesday. Phillips likens the ads to a new type of digital billboard that will allow small and medium-size businesses to raise awareness and draw people inside.

Kung Fu Tea, which participated in Waze's pilot program, said that in three months, more than 5,500 drivers navigated to one of its 16 locations through its ads.

Google bought Waze for roughly $1 billion in 2013, and has offered advertisements to big brands like Dunkin' Donuts for several years, but the minimum price for those products is a whopping $850 per day. The new ones will cost as little as $2 per day.

"Our target market is truly local businesses — any business that has a store sign in front," Phillips said. "We've tested with restaurants and hardware stores, shoppings malls and movie theaters."

Phillips says that in the year of Local ads beta testing, Waze hasn't had reports of annoyed users. It serves only ads based on proximity to a businesses versus on a users' past location history.

The three types of Local ads are "takeover ads" which will appear on the top third of a user's screen when they are stopped for at least three seconds, branded pins, which will show up along a user's route, and promoted search ads, which will appear when a user is searching for something through the app.

Advertisers will be charged on a cost-per-thousand impressions basis.

Phillips said that although Waze shares accident and traffic information with Google Maps, his team is completely separate from Google's Maps ads team.

Google Maps launched its own "promoted pins" in 2016, but, anecdotally, they haven't had much traction. Morgan Stanley analyst Brian Nowak has called Maps the "most under-monetized" asset he covers.

Compared with Maps, Waze's user base is tiny: It currently has 100 million monthly active users versus the more than 1 billion that Maps hit in 2014.