A look at Google's next big monetization opportunity.
Google may soon start running ads on the only service the company has left ad-free for over a decade: Google Maps.
The move may risk alienating users who have grown accustomed to navigating maps without being burdened by advertisements.
But in an increasingly crowded search market where users are beginning to forego Google to search for products directly on Amazon, Google seems to believe it is worth the risk.
In a report by Bloomberg this week, several Google executives suggested monetizing Google Maps was the next big advertising opportunity for the search giant.
Why Google Maps?
There are over 1 billion people worldwide who use Google Maps to get around and search for local businesses. Since its inception, Google has chosen to keep the service ad-free and focus on running ads on its search product. But now it remains one of the last pieces of online real estate the company has yet to run ads on.
According to Bloomberg's article, Google Maps will be monetized using two approaches: First, by increasing ways in which advertisers can reach people who use maps, and secondly by raising prices for companies that use maps in their business offerings.
"More people are searching via Amazon.com Inc. And on mobile devices, Google has already crammed the top of search results with ads, leaving less room for more commercial spots. In comparison, Maps feels like new territory primed for Google's ad systems to start pumping dollars from what is a giant, untapped data well," Bloomberg writes.
Google's business chief Philipp Schindler highlighted four different uses of Google Maps where ads could play a role.
- Basic Directions
- Requests for things nearby
- Personalized recommendations
- Searching business listings
While there is little that Google can do to place ads on basic directions, the other three are fair game for ads.
Possible legal hurdles
Of course, Google is walking a fine line when it says it will run ads on the platform.
Not only does it risk alienating users who rely on maps to get around, and who may switch to the plethora of other ad-free maps available, the company could also face legal resistance in some countries that are pushing back against how people's private data is being shared with advertisers.
"Europe has pounded the company for violating competition law, and there are rising calls in the U.S. for regulating Google’s data collection, privacy standards and ads business. Milking more money from Maps -- where millions of people share personal information daily -- could invite even more scrutiny," Bloomberg writes.
The data Google has about you potentially trumps that of all other advertisers. Google knows your search history. From other Google services it can find out where you live and work. Taken together with your current location, it can serve you ads that are highly personalized when you search for a location on a map.
But so far Google is downplaying the degree to which people's private data will be used for the ads. Instead the goal is to create personalized maps where users opt-in and indicate the degree of information about themselves they want to share. The ultimate goal is to get people spending more time on maps.
“We want to be able to highlight things that are around you and surface them nearby to you in a way that’s not disrupting your experience...because so much of what users are looking for in Google Maps is commercial in nature, ads can be a helpful addition to the experience" Bloomberg quotes Rajas Moonka, director of product management for Google Maps, as saying.
Who could benefit from Google Maps ads?
Small businesses and brick-and-mortar stores would see a great benefit to Google Maps ads which traditionally rely on email marketing to get new customers.
But email marketing is notoriously untargeted, and often works better for post-sale marketing follow-up and customer retention.
Ads on Google Maps would offer a new way for businesses to find customers who have an expressed interest in the product they want to buy and will be near a store location. It is a powerful combination.
Why only now?
To be clear, Google has been testing ads on Google Maps for quite some time.
For the last two years Google has tested "promoted pins" on maps which embed an advertisers brand on a map regardless of whether the user searched for the business or not.
In addition to the pins, ads are found when people search for specific businesses within maps. For example, if you search for a Chipotle near me on Google Maps, the listing that comes up may offer you an option for Lyft or Uber to get you there, which are ads.
The potential for Google to make money off Maps goes beyond ads. It has long charged other companies for the right to build their own maps using Google’s underlying technology. Entire categories of businesses have emerged on this platform, but until recently Google never focused on making much money from it.
How far can Google push ads on Maps?
There is a limit to how much advertising Google can push on maps, for the simple fact that the user experience on such a platform is so important. And not only that, there are realistic safety concerns if advertisements become too intrusive.
Searching for a location on Google Maps when walking is generally safe, but in a car it is a whole different story. And if ads make it difficult to follow directions, then this will limit how much they can be displayed.
Overall though, it will be interesting to see how advertising on Google Maps develops. It is yet another example of Google pushing its core advertising business away from search and diversifying in other areas.