Brief:

• Navigation app Waze looks to grow its advertising business with a feature that lets small businesses buy localized in-app ads, according to TechCrunch. Waze Local has been in testing since 2016 and now offers a variety of ad formats such as branded pins, localized search and digital billboards that are shown when drivers are at a complete stop.
• The Google-owned app has let larger brands like Dunkin' Donuts and Starbucks buy ads for years. Now, Waze Local aims to attract small businesses that are more interested in driving traffic to brick-and-mortar stores rather than a website. Some advertisers, like gas stations or coffee shops, could buy branded pins that urge drivers to make a quick stop along their route. Other advertisers may seek to build awareness for a later action.
• Waze charges for ads on a CPM basis, which means that the most basic campaigns could cost as little as $2 a day, the company's website says. It also lets marketers view engagement analytics and track their mobile campaigns.

Insight:

Waze's latest expansion demonstrates a creative, yet simple, way to get smaller advertisers onto its app without local marketers having to spend a fortune on producing effective rich media units to attract on-the-go consumers. The timing of the news is an attempt to take advantage of the growth in local mobile ads, a category forecast to reach $19 billion this year. 

Waze, which was acquired by Google in 2013 and has 100 million monthly users, has sold ads to major brands for years and only offered similar services to small businesses in limited tests before this month's broader rollout. The company is smart to open up its advertising opportunities and capture the growing digital spending of smaller businesses, especially after finding that U.S. businesses advertising on the Waze Local beta test saw a 20.4% jump in monthly visits to stores. Kung Fu Tea, a New York beverage chain, ran a test that saw more than 5,500 drivers use Waze Local to find its 16 locations during a three-month period, per TechCrunch.

Users of the navigation app spend about 11 hours per month in the app, Waze executives told Search Engine Land, making it an appealing channel to reach mobile consumers when they're not consumed in other apps like Facebook or Snapchat. Because Waze is owned by Google, the app has greater flexibility and resources to experiment with innovative mobile ad formats without being compelled to lay it on too thick and annoy users.