How Does Waze Make Money?

What is Waze? 

Most of us know about Waze. It is the app we use to get information about the traffic and directions when we are on our way to work or when going on a holiday. What most of us probably do not know about Waze is that the navigation app is owned by Google and it has earned a variety of awards. The app uses real-time GPS tracking as well as reporting from other drivers to determine the shortest and more accurate routes that will take you to your destination. Below you can see the major milestones in the rapid development of Waze:

  • The company was founded in 2006 by Ehud Shabtai under the name of FreeMap Israel.
  • In 2008 the company raised its first $12 million in Series A funding.
  • In 2009 the venture was renamed as Waze Mobile.
  • The company raised $25 million in Series B funding in 2010.
  • Another $30 million was raised by Waze in 2011 in Series C financing.
  • In 2013 the app managed to attract 36 million users and Google bought the company for $1.3 billion.
  • Now Waze has 110 million monthly active users and the annual earnings estimate is $37.7 million.

As we can all tell, Waze developed and became one of the most used navigation apps in the world in a very short time of only 14 years. Right now, the company is very profitable and works with some of the biggest brands of all time. 

How Does Waze Make Money?

Even though we now have a better understanding of what Waze is and what its features are, there is one more question that comes to mind. Does this app make money? Of course, it does. We let Waze track our location so that it can help guide us to our desired destination. By doing this we actually allow the app to make money. Now you may be wondering how a free to use app can make money off their users, right? Well, Waze and other applications of this sort use advertisements to earn money from any person that uses their services.

Have you ever passed a Starbucks shop in the morning and a few seconds later received an ad from this coffee shop on Waze? We have too. This is exactly how Waze’s in app location based advertising works. The app analyzes your location and the route you are taking to your destination. After this process, Waze knows specifically which stores, restaurants, and other small businesses to advertise to you in order to catch your attention. This is how brand ads can show up when using Waze:

  • Zero-Speed Takeovers – these are used to increase sales and exposure for brands and are some sort of digital billboards that you will see on your smartphone’s screen if you stop somewhere for more than 3 seconds.
  • Promoted Search Ads – these ads will pop up as a recommendation when you are searching for a store, restaurant, or any place nearby.
  • Branded Pins – these are pins of restaurants, shops, or gas stations that you can see when driving on a certain route and you are passing by that place.

Another source of revenue for Waze is carpooling. The app allows every user two carpools a day after verifying their workplace through email and charges them 54 cents per mile. This price always changes and depends on a variety of factors such as the number of riders, service fees, base prices, and subsidies. What is interesting, though, is that Waze has collaborated with very big companies like Amazon and others to encourage people to use this service.

How Much Money Does Waze Make?

We just guessed your thoughts, is that right? Now that you know how Waze makes money, you may be very curious about the exact amount of money this app manages to produce. You will be truly shocked to find out. In 2019 Waze’s annual revenue has been estimated at 37.7 million dollars. This sum has been generated by over 110 million monthly active users. This is no surprise since the app was the second most popular mapping app in the United States in April 2018.

Keep in mind that this app is still on the rise and is frequently being used by a lot of people up to this day. It would not be a surprise to see Waze’s annual earnings pass 50 million dollars by the end of 2020. After all, it is a useful, well-designed mapping app that has managed to attract a lot of users with its exciting features.

Who Pays Waze?

We know how much money Waze makes, but where does all this money come from? The app is completely free to use, does not require any taxes or fees, and makes 37.7 million dollars per year. How can this be possible? Waze uses advertising as its main revenue generator. But is advertising really that profitable? The answer is YES.

If we take a look at Waze’s official website, we can see that any company can start by spending as little as $2 per day to advertise their brand on this app. That cheap? Here are the basic pricing strategies that Waze uses for advertisements:

  • The Starter Package – this package is available in 55 countries and is dedicated to companies that are just starting with only 1 to 10 locations for an investment of $2 a day.
  • The Plus Package – this package is limited only to a few countries (U.S., Brazil, Mexico, France, Israel) and is made for big brands that have 10 to 50 locations and pay $100 per day.

This does not sound that expensive… I could advertise my small family business on Waze for a very low amount of money and gain a lot of exposure! While this is partly true and a lot of companies actually choose to pay Waze to advertise their brands thanks to its extensive audience reach, we should look at the prices the big companies we always see advertised pay.

For example, a famous brand such as Dunkin Donuts has to pay Waze a whopping $850 per day to display their advertisements on the app. This amount might be a lot for regular people like you and me, but for a well-known company, this price is totally worth it, considering the benefits that come along with advertising on Waze. One of these advantages is the fact that drivers will get discounts and place orders ahead of arriving at the restaurant, which will obviously benefit the company. 

How Does Waze’s Advertising System Work?

The advertisement system stands at the base of most of Waze’s earnings. This is because it is very effective, especially when they are working with some of the biggest companies in the world. We will explain in more detail how this system works and how it generates Waze so much money every year. These are the steps of Waze’s advertising system:

  1. Choosing an Advertisement – companies will choose an advertisement that will be displayed to users on Waze’s interface and then will pay anywhere from $2 to $100 or even more per day.
  2. Waze Filters the Advertisements – Waze will take all of the advertisements from all the companies and then find potential customers of these brands. After this, the brand will update the real-time releasing of data to the users, which will make them see the ads of companies that are relevant to their location or preferences.
  3. Pay Per Click – this is the basic pricing model of most ads system and it means that for every click an advertisement gets, Waze will earn a percentage of money. For example, the system can generate Waze $.50 for every 30 clicks the app gets on their advertisements.
  4. Waze Makes Profit – the final step of how this advertising system works is the one where Waze becomes profitable. The app gets a lot of big or small companies that choose to advertise on it, therefore earning a lot of money.

What Are the Features of Waze?

The most important purpose of Waze is to get people to their destinations while assisting them with real-time information on traffic and road conditions. But this is just something most navigation apps already do as well. So, what makes Waze different from other apps of this sort? Here are the most exciting features Waze has:

  • Voice Guidance – the app assists you with turn-by-turn voice prompts and alerts if you enable this feature to help you stay alert behind the steering wheel and ensures your safety is the number one priority when driving.
  • Notifications About Traffic – the app collects reviews from other drivers and notifies you whenever there are any traffic jams, road closures, speed cameras, or local hazards on your way to your destination.
  • Location of Police Patrols – this is probably any driver’s dream, but Waze truly notifies you whenever you are approaching police patrols or mobile speed checks. This way you can avoid being pulled over and slow down when needed.
  • Photos from Users – whenever something is disrupting normal driving, such as an accident, heavy traffic, or blocked roads, any Waze user can upload a picture from that location to alert other users of the road conditions.
  • Planned Drive – this feature recommends users the best time to start a trip based on the time, location, and the usual traffic to make sure they get to their destinations as quickly and efficiently as possible.

How do I Place My Business Ads on Waze?

Are you a business owner and wish to gain more exposure for your brand by advertising it on Waze? Then you have made the right decision. Waze will help you get the most out of your money and will help you attract loyal customers. The question you probably cannot stop asking yourself now is how to actually get started with advertising on Waze. Here is a simple step-by-step guide to doing this:

  1. Click on Reports – the first thing you should do to get started is to open your Waze app and then click on “Reports”, then “Places”. After doing this, you will have to choose the business option.
  2. Describe Your Business – this step is crucial if you want to drive a lot of customers in. You have to write a business description that will appeal to potential customers and you can also add pictures of your company.
  3. Select Your Budget – you have to pick one of Waze’s pricing packages. If you are a smaller business, it is advised to start with the cheaper one which will include branded pins, promote search, self-service platform, email support, and geographical targeting.
  4. Done – the last step is to click on done after you have filled in all the details required.

After following this short guide, any business owner should know how to place their business’ advertisements on Waze and start gaining more and more customers.

Where is Waze Headed?

Waze is one of the most popular navigation apps at the moment. It has more than 6.3 million active users, and we are sure this number is only going to keep growing. After all, this app is very useful whenever traveling by car because it gives you all the information you need for a great driving experience. It is said that in the future Waze plans to incorporate different kinds of ads and add more exciting features.

On top of this, Waze is also planning to create a system that allows its users to pay for gas directly from the app itself. This will help drivers spend less time traveling to gas stations and will let them get gas with just a tap on the smartphone’s screen. As of now, Waze constantly updates their apps to improve the user experience and remove bugs or any other problems that people report. Considering all this, be sure Waze will be here for good!


Leave a Comment