GPS app Waze starts to tap into location-based ads

7 Nov, 2012

Mobile satellite navigation startup Waze launched a global advertising platform on Wednesday, targeting its 30 million users based on their location.

Waze, founded in 2009 in Israel, uses satellite signals from members' smartphones to generate maps and traffic data, which it then shares with other users, offering real-time traffic info.

The quality of data improves as more drivers join the network and use it. The number of users has jumped to 30 million from just 7 million 12 months ago.

Smartphone users can use Waze's service for free and it aims to make money from ads of local merchants and big brands by attracting mobile customers on the road nearby.

Location-based advertising is often seen as a massive opportunity the mobile industry, but so far worries over privacy have hampered its growth.

Waze gets around this by displaying its information from drivers anonymously, with a delay, although members can choose to identify themselves if they wish.

"Waze is right to start building up location based advertising, but it shouldn't have inflated expectations. This is a busy and confusing field, and many advertisers will stick with the big brand players, such as Google and Facebook," said analyst Martin Garner from British consultancy CCS Insight.

Waze says it saw a jump in downloads of its app after Apple Chief Executive Tim Cook, in an unusual move after the launch of iPhone 5, suggested that customers download rival mapping services like Waze while Apple improves its own maps.

While other satellite navigation providers help drivers find the way to sites they do not know - something a typical driver needs on a holiday or in a new town - Waze aims to save drivers time on their usual routes by suggesting faster, alternative ways.

Waze sees Google Inc as its most direct rival, but in the larger navigation market it also competes with TomTom, Nokia, Garmin and Telenav.

Waze has raised a total of $67 million from investors such as top venture firm Kleiner Perkins and Hong Kong tycoon Li Ka-shing.