Consensus pinpoints location as the fast lane to mobile advertising success. As alluring to brick-and-mortar marketers as a consumer’s location is that consumer’s destination, particularly if a brand can influence that endpoint. Crowdsourced traffic app Waze—which maps out turn-by-turn driving directions for iPhone and Android users and added more than one user per second the month after the Apple Maps fiasco —is banking on the latter as it debuts its U.S. ad business today, as previously reported  by Adweek.
“We want to make things efficient for our Wazers to find the things they need,” said Di-Ann Eisnor, Waze’s vp of platforms and partnerships. As an example of filling those needs, Waze found that 80 percent of its 30 million users stop for groceries on the way home from work multiple times per month, she said; Waze could use that insight to enable a supermarket to promote a coupon to those users when they’re leaving work at the end of the day.
Like seemingly every startup currently exploring an ad-supported business model, Waze has gone native for its ad platform. Typically startups wade into advertising by working directly with brands then erecting a self-serve platform down the road. Waze sped things up. The company began testing ads in its U.S. app over the summer, working directly with Zipcar, Best Buy and a number of fuel brands and convenience store chains; at launch it has added Procter & Gamble, Dunkin’ Donuts, Wyndham Hotels, Whole Foods, Jamba Juice, CircleK and Kum & Go to its advertiser roster.
The direct sales channel continues, but Waze has also set up a self-serve platform  for its most basic ad units. The self-serve platform operates on an auction model with floor prices set at $1 per thousand impressions. In addition to a branded search result, marketers can pay to plot branded pins at their locations on the Waze map. When users click on these branded pins, they can click a link to the company’s website, a number to call the location or—borrowing the idea of drive-to advertising popularized by driving navigation company Telenav—a button that would navigate them to the location.
But Waze’s self-serve ad platform won’t be so limited for long. Its direct sales channel is something of a product trial. “Anything that sticks will be brought into the self-serve platform,” Eisnor said. Those direct-only ad products include the ability to push app downloads or in-store offers that can be redeemed when a user arrives at the advertised destination. In testing Waze found that branded pins that included offers generated three to four times higher clickthrough rates than branded pins without offers, Eisnor said, and one brand that offered a fuel discount saw a roughly 50 percent redemption rate.
Similar to Facebook and Twitter, Waze will monitor how its users respond to ads in order to determine how its ad model, both in terms of which ads make it to the self-serve platform as well as how many make it in front of users. Initially an individual user will see a maximum of three ads at a time.