Google converts another popular web service into a slot machine

Google has become the most profitable Internet company in the world thanks to search advertising. Now, you convert another popular web service into a slot machine.

Google Maps it's a part indispensable to the lives of over a billion people who use it to travel, explore new cities or find a new restaurant. The service is mostly free and ad-free since its launch 14 years ago.

Interviews with Google executives and customers have shown that the situation is changing as the Internet giant increases the means by which advertisers can reach the users of Maps, while increasing the prices of some companies using the underlying technology. behind. The application regularly highlights sponsored sites and displays additional payment lists when people are looking for gas stations, coffee shops or other nearby businesses.

"They have a great opportunity to increase monetization"Andy Taylor, badociate research director of the digital marketing agency Merkle. "They played slowly."

The research activity remains extremely profitable and growing, but it can not last forever. More and more people are searching on Amazon.com Inc. And on mobile devices, Google has already filled the top search results with ads, leaving less space for advertising. In comparison, Google Maps looks like a new territory ready to allow Google's advertising systems to start injecting dollars into this untapped data giant.

"Sometimes I say that the most submonetized badet I cover is Google Maps"said Brian Nowak, an badyst at Morgan Stanley, interviewing Google's commercial director, Philipp Schindler, at a recent conference.

It is also possible that this Google Maps initiative will lead Google to increase regulatory barriers. Europe has attacked the company for violation of competition law, and demand is increasing in the United States. to regulate Google's data collection, privacy standards, and advertising activity. Gathering more money on Maps, where millions of people share personal information on a daily basis, could lead to more scrutiny.

Along with the information obtained from other Google services, the company knows where the locals live, and the locals, the bars and restaurants that they frequent, as well as their centers of interest. Touch the tab "For you" at the bottom of the home page of the Maps application and could suggest a vegan bakery, while saying "You seem interested in vegetarian."

In fact, Schindler pointed out that Google would generate personalized recommendations on "caution and confidentiality with optional forms" cards.

The company is betting that by adding more data on places and businesses to Google Maps, users will spend more time on the service. As users expect more cards, Google will have extra space to enter more ads.

"We want to be able to showcase the things around you and show them to you in a way that does not hurt your experience""Says Rajas Moonka, Director of Product Management at Google Maps. Since Google Maps users do a lot of their research in the commercial setting, ads can be a useful addition to the experience, he adds.

The company has been testing ads on Maps for years and owns Waze, a navigation app with ads and over 100 million downloads. But Google went slowly. "We have been very careful not to be very aggressive with the way we present it to users because we do not want them to feel that we are overloading the experience"said Moonka.

Last summer, voice instructions from the Maps application began to mention known brand names that are already big buyers of Google search ads. Instead of saying "turn right on Schindler Avenue", the app says sometimes "turn right on Starbucks". O Dunkin Donuts, or the local paint shop. Google said these ads are not ads, adding that fast food chains, banks and other businesses are useful reference points to guide Maps users.

In the last two years, Google has also tested "promotional pins", marked points of the mark of an advertiser that appears on the map, whether the user has searched for this activity or not. McDonald's Corp., Dunkin Group's Brands Inc. and Michael Kors Holdings Ltd. are among the users.

Small businesses can also access the pins as part of a set of ads that Google places in different parts of their digital empire, depending on where they think the most effective.

In addition to pins, ads can be found in Maps search results, for example, when Starbucks, for example, pays to be listed at the top of the list of search results for "cafes near me". Choose a location where you have to go with the Maps application. In addition to driving and walking instructions, there are links to transport options at Uber and Lyft. These are also ads.

Google's potential for making money with Google Maps goes beyond ads. For a long time, he charged other companies the right to create their own cards using the underlying technology of Google. Entire categories of companies have emerged on this platform, but until recently, Google had never sought to make a lot of money.

Last year, that changed. Google places all customers of its mapping tools, big and small, under the same pay-as-you-go system. The company stated that this simplified the process, but for many small users this meant a significant increase in prices.

More than 5 million developers use these tools, according to Gayathri Rajan, who heads the Google Maps business team. However, some are not happy with the new approach.

In the past, Google Maps was an open and free Web infrastructure, says Bartlomiej Owczarek, founder of a company that helps people find pharmacies that have the medicines they need. Now, it's a product you have to buy. However, Google provides a $ 200 loan, which covers most of the costs for smaller providers, says Rajan.

Prior to the changes, Owczarek obtained 750,000 free card views per month and was charged 50 cents per 1,000 visits. Now, Google charges 30,000 visits and returns to US $ 7 for 1,000 visits. Their costs have been reduced to $ 5,000 a month.

"This is not a reasonable price, they are completely out of space," says Owczarek, who has found another provider and is wary of other Google products in the future.

Suddenly charging something that was free or placing ads in services where there was none is a rare and risky move for Google. But the parent company, Alphabet Inc., needs to please its shareholders and achieve its revenue growth goals. Maps is the next big service on which the company focuses to achieve these goals.