Waze is one of the most well-known navigation apps used by millions of drivers around the world. It gives real-time traffic updates, suggests the fastest routes, and even warns you about road hazards, accidents, or police traps. But here’s something most people don’t think about: Waze is completely free. So, how does Waze make money and stay in business?

The short answer is advertising.

Waze has built a smart advertising model that helps businesses reach potential customers while still offering a smooth experience to users. In this article, we’ll explore how Waze makes money through advertising, what kinds of ads it runs, and why its business strategy works so well.

What Makes Waze Different?

Before diving into the money-making part, let’s quickly understand what sets Waze apart from other apps.

Waze doesn’t just guide you from point A to B. It relies on real-time user input. If a driver sees an accident or traffic jam, they can report it, and other Waze users will be warned. This community-driven approach makes Waze more accurate and useful than many other GPS apps.

It also makes Waze a perfect platform for local businesses and large brands to promote their services to drivers in real time.

The Waze Advertising Strategy

Unlike traditional ads that pop up randomly or follow you around the internet, Waze focuses on location-based advertising. This means users see ads that are relevant to where they are and what they’re doing. Since drivers are already on the move, these ads feel more like helpful suggestions than distractions.

Here’s how Waze earns money through advertising.

Promoted Pins

Promoted pins are one of the main ad formats used by Waze. These pins are small branded logos or icons that appear on the map as you drive.

For example, if you’re driving near a McDonald's, a small McDonald's logo might pop up on the map. This shows you that there’s one close by. If you tap the pin, you can get directions, store hours, or special deals.

Businesses pay Waze to have their pin shown on the map, especially when users are nearby. It’s an effective way to bring foot traffic to physical locations, like restaurants, gas stations, or retail stores.

In-App Display Ads (When Stopped)

Waze also shows visual ads, but only when your car is not moving. These are known as "zero-speed takeovers."

So, let’s say you’re parked or stopped at a red light. An ad might appear on your screen promoting a nearby store, product, or deal. Since the ad only shows up when you’re not driving, it doesn’t distract you on the road.

These ads are great for both safety and effectiveness. Businesses get noticed at the right time, and drivers aren’t interrupted while navigating.

Audio Ads

Waze has also experimented with voice ads that play while you're using the app. These are short, quick messages—like a coffee shop letting you know there’s one just ahead.

These audio ads are targeted based on your location and driving patterns, making them feel more personal. Companies pay to have their message broadcast to drivers in specific areas.

Who Advertises on Waze?

Waze’s advertising system works for both big brands and small local businesses.

Large companies like Starbucks, Shell, Dunkin’, and McDonald's have used Waze ads to drive traffic to their locations. Because Waze is owned by Google, it also benefits from advanced ad targeting technology.

At the same time, small businesses can advertise too. Waze has created ad tools that are affordable for local shops, restaurants, and services. These businesses can set a small budget and choose where and when their ads appear.

This makes Waze a flexible advertising platform that works for businesses of all sizes.

Why Waze’s Advertising Works So Well

The reason Waze’s ad model works is because it’s non-intrusive and helpful. Drivers see ads that are relevant to their route and surroundings. Instead of being annoyed by ads, many users actually appreciate the suggestions.

Let’s say you’re on a long drive and feeling hungry. Seeing a promoted pin for a burger place just two minutes off your route might be exactly what you need. That’s the value of location-based advertising—timing and relevance.

Because of this, Waze has managed to make money while keeping its users happy. That’s not easy in the world of free apps.

Does Waze Sell Personal Data?

Many people worry about free apps using or selling their personal data. Waze does collect information about your driving habits, locations, and searches, but this data is mostly anonymous.

Waze does not sell personal information. Instead, it uses data to improve your experience and to help advertisers target ads based on location, not identity.

Also, Waze works with cities and governments through a program called Waze for Cities, where traffic data is shared to improve local road conditions.

How Does Waze Make Money Through Advertising?

Conclusion

Waze is a great example of how a free app can make money through smart and helpful advertising. By focusing on location-based promotions like promoted pins, search ads, and in-app displays, Waze turns everyday drivers into potential customers for businesses.

The key to Waze’s success is how naturally the ads fit into the app. They’re not disruptive, they’re actually useful. Drivers get relevant suggestions while businesses get more visibility and foot traffic. It’s a win-win situation.

If you’re thinking about building an app that’s both helpful and profitable, Waze’s model is worth learning from. Working with an experienced clone app development company can help you build a similar platform, designed to meet the needs of users while also having a strong revenue model behind it.

By using smart advertising and keeping the user experience smooth, your app could follow a path similar to Waze—helping people every day while building a successful business.