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Online and in apps with a simple push of a button. Just select Google at checkout, then confirm your purchase and you’re done.
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Google doesn’t disclose details about Google Maps revenue, and the numbers I’ve shown above are just estimates. Later in the article, I will provide a more detailed insight into where this revenue comes from, how I estimated it, and why it is likely to grow strongly in the coming years. 🗺️ What Google Maps offers: Quick overview
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Before we get to how Google Maps makes money, let me quickly remind you of the range of functionality that Google Maps currently offers to its users and businesses, as Google has been adding a lot of new stuff lately. What can you use Google for? Use maps?
Google does not disclose details about how much Google Maps earns. One of the few numbers that Google reveals is the number of monthly active users, which is 1 billion. Thanks to this, Google Maps is well ahead of its competitors both in the world and in the United States. Google Maps had 154 million in the US, which is 6 times more than their nearest competitor.
So how much is the income from Google Maps? Here’s an infographic that explains how Google Maps will make about $4.3 billion a year based on my rough estimates for next year. It consists of $3.5 billion in ad revenue and $0.8 billion in Google Maps API revenue.
If you are interested in how exactly I arrived at these numbers, I will explain later in this article. I also looked at another analyst’s estimate, and one that is repeated over and over again in many articles was Brian Nowack’s estimate of Morgan Stanley, which is slightly higher assuming 3 billion revenue in 2019 and 5 billion a year in 2020 and increase to 11 billion in 2023.
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For a long time, Google did not monetize its maps through Adds, and even access to the Google API was cheaper and mostly free for a smaller site. This has changed recently.
Google is starting to roll out more add-ons to Google Maps to bring in revenue. However, they are taking it slow to see how users react. The service is still heavily underinvested. We’ve been very careful not to be too aggressive in how we present these [ads] to users because we don’t want users to feel like we’re overloading the experience.” – Rajas Moonka, Google Maps Director of Product Management, as reported by Bloomberg
They also merged their separate mapping API into the “Google Maps Platform” and significantly increased prices and limited free access to the API.
Google has also publicly announced this emphasis, so their actions are in line with what Google says. This means Google Maps revenue could grow significantly in just a few years. And because the cost of this service already exists, any increase in income means an incremental increase in net pre-tax income.
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That’s why this is such a significant opportunity for Google/Alphabet, and why Google Maps revenue could double in just a few years. By my estimation, that would mean revenues of $8 billion or more a year. 🔎 How Google Maps makes money from ads
Let’s take a look at the different ways Google monetizes ads on Google Maps (3.5 billion estimates in 2019). How it’s working? Local Search Ads on Google Maps
Google Maps allows you to search locally. You can zoom in on a city or a specific area of the city and search for restaurants, hotels, dentists, shops, or other businesses. A list of these stores will appear, which you can scroll through.
Advertising works the same way as in the standard Google search engine. The paid list is displayed above, labeled “Advertisement”. The paid list also has a different color (purple) than the pin directly on the card. You can see all this in the example below.
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For advertisers, there is no unique way to advertise on Google Maps alone. The service is part of local search advertising. To advertise on Google Maps, a business must have a “Google My Business Profile” and activate “Location Extensions” in Google Ads. Advertisers only pay when their ad is clicked, similar to standard Google Ads. Custom branded map pins
Another way Google monetizes Google Maps is by adding revenue by offering businesses custom branded pins with their company logo. These pins will appear directly on the map, even if you’re not looking for a specific store. You can see an example from Walgreen’s in San Francisco.
This feature is of course a paid feature and you need to meet some minimum spend and minimum number of seats to use it. Use of company locations as landmarks in navigation
Many users reported (see sample tweets below) that when they used Google Maps for navigation, they noticed that Google had started using local business locations as waypoints. So people were given instructions like “right to Starbucks” or “right to Burger King.” Some users like it, others less so.
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Google maps just told me to “turn right after Burger King”. Is this new? A new source of ad revenue?
So @googlemaps instructed me to “turn straight to Burger King”… I think this is the best update so far. #mad
Amazing how much #McDough paid @googlemaps to tell me to turn right at @McDonalds…it’s not smooth…I don’t need “advertised landmarks”, left and right are fine…
Google, as reported by Bloomberg, denied that this is a paid service, and said they use it because it is a better landmark and results in a better user experience.
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Well, it may be true that Google’s customers don’t pay for it directly, but since it’s mostly the larger companies that have been cited as landmarks so far, it looks more to the advantage of larger Google ad buyers. I think after a few years it should be possible to evaluate and analyze whether there are any obvious biases in the way these landmarks are chosen. 💵 How much money Google Maps earns from ads with detailed revenue estimates.
Google does not disclose revenue from Google Maps. The $3.5 billion in ad revenue I mentioned earlier in the article is based on my rough estimates. And since I believe that estimates and projections without more details on why and how they were developed are useless, let me explain how I arrived at these estimates. Step 1: Gather reliable data via Google Maps
The only very helpful number we have directly from Google is that Google Maps has 1 billion active users. So if we somehow find out how much Maps earns per user, we can multiply that by 1 billion and we’ll get annual revenue estimates for Google. Unfortunately, Goggle doesn’t reveal this. Step 2: Gather credible data on similar companies (benchmarking)
So how do you know when Google Maps Annual Revenue Per User
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