Wednesday, November 7, 2012

New "Waze" to Make Money



Crowd-sourcing has increasingly become a legitimate form of fundraising and marketing in the wake of social networking.  Websites such as Kickstarter, Amazon’s Mechanical Turk and Facebook have capitalized on the linkages people make between people and their causes, so much so that “crowdfunding” has become a bona fide fundraising strategy for small-scale projects.

It turns out that many companies have turned to crowd-sourcing as a method for content creation in parallel with other crowd-based functions.  A new start-up, Waze, has savored the strengths that navigation technologies bring to a crowd-sourcing platform. 
Waze has created a product that allows users to share real-time data about travel conditions based on travel times.  Other navigation apps have attempted to provide traffic updating functionality, but rarely overcome the accuracy issues that come with construction projects and immediate traffic stoppages.  Absent those features and as cell phone navigation proliferated, the personal navigation device market plummeted, making room for improvements to the cell phone medium

Waze recognizes the importance of crowd-sourced data-sharing to improve both the delivery of real-time navigation, but has recently made a move to monetize this service with local advertising.  Now, users can receive location-based coupons and deals serviced via algorithms that generate ads in relation to the destination of the driver as well.

Strategy literature suggests that “cocreation” methods are an increasingly critical part of online business.  In this case, Waze is gathering location data from its users to create a personalized, destination-driven advertising route that better optimizes local business advertising.  The users, then, are as much generators of content as they are consumers.

In a sector where advertising has been difficult to meaningfully generate for users, Waze has charted a path to better information and increased consumption patterns for all transit-users.   

Sources:

http://gigaom.com/2012/11/07/waze-begins-monetization-push-with-location-guided-ads/

“Clouds, Big Data, and Smart Assets: Ten Tech-Enabled Business Trends to Watch”
(Bughin, Chui, and Manyika, McKinsey Quarterly, August 2010)

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