What's Next, Waze?...

Time for change

Interesting times for Waze , and one can only hope it is for the better. Ten years passed since 谷歌 acquired the company for a jaw-dropping $1.1Bn, and the subsidiary, it seems, is yet to find a viable business model.

While its revenue is said to rely on advertising, FourWeekMBA states Waze revenue stems from $0.002 CPI (with a minimum fee depending on business size), in addition to referral fees, as well as from car-pool fees.

Is this a viable, profitable, business model? What if the mother company cuts funding and lets the subsidiary fend for itself?

More to the point: Can Waze revise its product offering to generate substantial revenue from diverse sources, including, perish the thought, from its users?

Pain and Product

One thing is certain. Users love the product. It has become a staple on drivers' phones in many markets, and with 74% loyalty, it seems to remain on the dashboard long enough.

The value proposition to drivers is epitomized by Waze's slogan: "Outsmarting traffic together". Importantly, it is the value offered to consumers - drivers: In a worsening traffic conditions, as roads get clogged by new vehicles by the day, the promise to reach your destination earlier has caught the mind and hearts of drivers - pushing app downloads to 9.2M in 2022, second only to the pre-installed google maps.

Wait, what? Am I the only one missing Waze's value proposition for its paying customers?

Publishers' Offering, Advertisers' Value

Some publishers offer advertisers a combination of traffic and format. Monthly active users translate to impressions, which - according to conversion rates - further translates to leads.

More sophisticated publishers are able to improve conversion by either better segmentation or higher intent. Facebook excels in micro segmentation, while Google specializes in bringing high-intent users.

Both approaches yield increased conversion rates ending in better outcomes for advertisers, in turn willing to pay higher impression costs (CPI, CMP) or result based monetization (PPC, CPA).

Waze's Ad Offering

As a mostly free to use service, Waze counts on advertising revenue. Local businesses - bank branches, gas stations, and similar businesses - are lured to place a geo location pin on the maps displayed to drivers.

The premise is that enough of those thousands of commuting drivers eventually convert to paying customers - not unlike roadsigns.

If I am to judge this advertising offering, I deem it suboptimal:

• Segmentation is hardly employed, as all drivers seem to be treated equally
• Targeting is geo location-based, but oblivious to routes, catchment areas, and destinations
• Attribution is nowhere to be found, precluding high yield result based monetization.

To Be Continued...

In the following series, I will outlay several product based monetization ideas that could propel Waze's value - both to drivers and advertisers.