How Do Google Maps Make Money?
Table of Contents:
· How much does Google Maps make?
· Google’s interesting business model- “hidden” revenue!
· So who does pay Google?
· Google Ads and Google AdSense explained
∘ So, in summary, here’s how this cycle works:
· What other ways does Google use to make money?
· What is Google Maps?
· How does Google Maps make money?
· Another way that Google Maps makes money
· Custom Pins
· “Turn right after the Burger King”- An advertisement trick?
· How can I add my business to Google Maps and advertise it?
· In conclusion, where is Google Maps headed?
· It’s Time To Start Making Money With Google!
· Wealthy Affiliate — No1 Affiliate Training Program
· What is Wealthy Affiliate?
Do Google Maps make money?
But you and I never had to spend a dime when using Google Maps! Plus, Google Maps has always been so hassle-free. We are used to incessantly having to skip ads on YouTube but never had to close a single ad pop-up on Maps. Then how does Google use Google Maps to make money when it is not bombarding us with ads and has such an unassuming and smooth user experience?
Google Maps was originally ad-free and even when partnering with other companies or giving them access to its API, it charged much lower rates than now. But as time went on for Google’s mapping service the company has been squeezing in more ads which is generating revenue at an alarming rate; but how do they make money off of this? It may not be obvious right away — only recently did we see that there can sometimes be paid work going on behind those tiny little blue icons you’ll find all over your screen!
In essence, Google is importing the same philosophy and business model that it has been using for its other platforms, into Google Maps. We’ll talk more about Google’s business model in detail soon as that is key to understanding how any Google platform generates so much money without directly charging users for its services.
The first monetization strategy that Google has used with Maps is the “brand ad” strategy. Basically, suppose you are familiar with Google Adsense. In that case, it works on a similar principle where businesses are allowed to place text ads on partner websites that pop up when users visit those sites.
Google’s money comes from making sure that brands pay for each click they receive, whereas webmasters make money whenever their site gets traffic. This is basically the case with Google Maps, too — even though users don’t see anything coming up when they open maps, advertisers who partner with Google do. The rates for this case are negotiated by both parties before any deal takes place. Each company decides how much advertising will cost them per view or impression (meaning whenever a user opens the map).
Google also offers another option of allowing users to pan around on the map. Still, it requires that they pay for more use (so an ad is shown more than once if you are allowed to look around on the map) or, even more importantly, that they actually buy something. An example of this is Zillow, a real estate site, which pays Google every time someone buys a house through Maps.
Google is a business and it makes money no matter what you do. That’s why Maps has so many options for companies with its map service: anything from primary exposure publicity to paid advertising and lead generation, all depending on how much equity (money) there is at stake between each client! With this in mind we can see that even though Google does not use ads as their main source of revenue like other internet giants such as Facebook or Twitter.
They still make plenty thanks again those accounts run through the maps app- which alone made $3 billion last year by itself!! If a business is on Google Maps you know they are doing something right and that’s why we want to help you be part of this success.
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Normally, the only way people thought you could get your business featured was by paying Google or convincing an existing client with enough money to spend on such a service which usually not only cost them thousands but also took months to actually get the results- which weren’t always that great or noticeable.
This brings us to the second method that Google has been using since 2012 — charging partners for access to its API services! Once companies start tying themselves more and more with Google, whether through Gmail or YouTube, they start getting reliant on its Map API because most of their information comes from there!
In essence, as long as users rely on Android phones (which utilize many Google apps) or visit websites with embedded maps (most people don’t bother to use other map apps than what comes standard), this will give Google bargaining power over these companies.
Google Maps may be the most important app on your phone, but it’s also one of the best tools for driving sales. The more customers rely on Google Maps to find their way around or even just make a purchase, the more valuable those partnerships with Google become. That is why we’re here at _____ (name) ___ __(website)- our team of experts is ready and waiting to partner with you as well! Let us know how we can help- whether that means SEO services or marketing plans that harness this power by using these neuroscience principles to drive engagement and conversion rates up.
How much does Google Maps make?
This we do not know accurately as Google never discloses it. However, we can manage a guess based on expert estimates that it makes around $4 billion a year as of now, and the amount is scaling up fast!
They’re making that money by selling their search data. Want to see how much? Search Google Maps for “coffee”:
Coffee, coffee, coffee…looks like 1–2 results per city. There are a few hundred cities in the US alone, so that’s roughly 600 million local business database records being sold each year. Every record has a name, address and phone number — the most important information you’d want before buying something.
Here’s another one for “burritos”:
Mexican restaurants, burrito places… look like dozens of results per city. Again, that’s hundreds of millions of records being sold. Your data is worth big money.
And here’s one for “cancer clinics”
Hundreds of results…again, hundreds of millions of records sold by Google collecting the most basic information about you and your habits. They know what you’re doing right now!
It gets worse: there are thousands of more types of searches that provide even more specific data about exactly who you are and what you’re looking for. At this point, Google knows your search history better than you do.
Google is building a profile on everyone they sell information to. That profile includes:
- Your name and address
- Phone number
- Credit card number (though they claim not to store that data)
- Email address(es)
In addition, Google is selling your search history back to these third parties so they can build even more detailed profiles on you. If you’ve ever used Gmail, YouTube or any other Google-owned product, it’s likely that you’re already in one of these databases.
Google’s interesting business model- “hidden” revenue!
Why is Google’s business model so interesting? Typically, we pay for the services we use. But with Google’s model, the user doesn’t pay a penny for its services. The world’s information at our fingertips, and all for free!
How on Earth does Google provide all these services for free?
In a sense, Google is similar to a casino. In the casinos, the house makes its money from people who gamble. Some people win big, but most lose their cash and walk away disgruntled. In order for the casinos to stay profitable in the long term, they must therefore ensure that most of their clientele lose.
Google is a little like a casino: it has so-called ‘AdWords’ — advertisements for companies that want to promote a product, event or brand. The advertiser pays for this service and is already prepared to pay something simply by virtue of being an advertiser. These advertising fees are the main source of revenue for Google. The search page itself contains advertisements as well as results for the users’ queries.
This is not free: the user pays with their attention and those who want to be seen must pay a price — normally, by buying advertising space. But Google’s main source of income comes from licensing its software and services that generate huge amounts of data, such as Android.
Google charges the manufacturers of mobile phones for this service and they then recoup this sum from their customers. What’s more, many of these manufacturers also pay to ensure that they are included in the list of pre-installed apps on new devices sold by Google.
Google is a little like a casino. It has AdWords, which are advertisements for companies that want to promote their product, event, or brand. The advertiser pays for this service and they are already prepared to pay something simply by virtue of being an advertiser. These advertising fees are the main source of revenue for Google. When you go on the search page, there are ads on the left side, but also searches on the right side that comes up when someone puts in what they want to find out about or look up online.
So who does pay Google?
Google mainly uses advertising to generate huge amounts of revenue! Third-party companies, businesses, and people pay Google to advertise their products and services on its platforms.
It’s no surprise that Google earns skyscraping AND skyrocketing revenues every year, because of the sheer volume of traffic that it attracts. Advertisers choose Google because such a large volume of people use it, everywhere and all the time! So with everyone looking to advertise through Google, Google is earning a great deal of money.
You can see now why this is called a “hidden” revenue business model. On the surface, users do not need to pay anything! Instead, third parties pay Google for advertising.
But this is not the only way Google makes huge revenues! It also does so through its other “hidden” revenue business model: Auctions.
Google sells keywords to advertisers in an online auction before showing their ads on specific types of searches. This is very much like selling airtime for radio station advertising. Advertisers bid on keywords based on how much they are willing to pay when someone clicks on their ad. So if your company specializes in Pogo games, you would be willing to pay more than another player who specializes in fishing games! This results in higher bids and pricier cost-per-click charges for advertisers bidding on popular keywords with high competition.
Google is a company with many revenue streams, and it’s important for marketers to know how they generate their money. On the surface, Google doesn’t charge anything for its services and instead relies on advertising from third-party companies like Facebook or Amazon.
However, when advertisers bid in an online auction before being shown ads on specific types of searches, Google profits by charging them higher cost-per-click rates if they are willing to pay more than another player who specializes in fishing games! This results in higher bids and pricier cost-per-click charges for advertisers bidding on popular keywords with high competition.
But this is not the only way that Google makes huge revenues! It also does so through its other “hidden” business model: Auctions. This auctioning process allows advertisers to bid on keywords based on how much they are willing to pay per click when someone clicks on their ad — meaning you can be bidding against your competitors at any given time of day without even knowing it!
Examples of customers who use Google for advertising are:
- Amazon! Oh yes, Amazon advertises on Google too and just imagine the revenue Google must be generating from the biggest global advertiser and other similar large businesses!
- Advertising and marketing agencies
- Medium and small businesses
Google Ads and Google AdSense explained
Google Ads (previously known as Google AdWords) is Google’s online platform where advertisers (different types of businesses and individuals) pay to advertise. It is like an auction where advertisers bid on keywords for their ads to show up in Google searches.
Whenever someone clicks on an ad, Google charges the advertiser for that click. This is how much money an advertiser has to pay. The amount they have to pay is determined by how much they bid plus the quality of their business and the competitiveness of the keywords they want to rank for. If you bid more money, and your business has a good reputation, then you will show up higher in ads rankings and your company’s ads will be more likely to show up at the top of Google search results pages.
Google AdSense is Google’s ad network that allows publishers (website owners, bloggers etc.) to place ads on their site, and earn a share of the profit Google earns from advertisers.
Google Ads and AdSense are thus integrated with each other.
So, in summary, here’s how this cycle works:
- Users search on Google and visit websites
- Users click on ads
- Google charges the advertiser for every click and makes good money
- If you are a publisher who allows ad placement on your website, you get a share of what Google earns every time a user clicks on an ad on your website.
This is a very smart move by Google, because even though they must pay publishers for every click, the total amount of traffic that they can direct to ads, and the total number of ads that they can display increases dramatically. With the huge added profits it makes, Google doesn’t mind splitting part of its revenue per click with content creators in return. The same model applies to YouTube. YouTube creators get a chance to make money by allowing Google to play ads during their videos.
You must have also noticed how this advertising has blown out of proportion in the past few years. Once upon a time, YouTube used to be nearly ad-free, and we could watch videos almost undisturbed. Now the ads keep coming every few minutes and the amount of “must-watch” time before you can actually skip the ad is also increasing!
This is Google’s smart advertising model, and you should keep this in mind when we talk specifically about how Google Maps makes money in a while.
What other ways does Google use to make money?
Although 88% of Google’s revenue comes from advertising, the remaining 12% is generated by other streams such as Google Cloud, which earns through a subscription-based model. Google is also acquiring other companies and hence increasing its sources of revenue. For example, YouTube was acquired by Google in 2006. Fitbit was acquired recently in 2019. Moreover, Google also earns through e-commerce and app sales too.
What is Google Maps?
Now that we have discussed Google’s business model in general, let’s talk about Google Maps in detail. Google Maps is undoubtedly the best mapping service in the world. It has no significant competitor in its league. It is such a precise, detailed, and all-knowing mapping service that it is loved by every user. Some of the cool features that Maps offers include:
- Browsing it like a normal map
- Searching local businesses, places, and landmarks like restaurants, outlets, tourist spots, hospitals and shops- you name it!
- Finding routes, estimating traveling time, and using it for navigation. Recently Maps has become so advanced that it offers information on traffic density on roads in real-time. So you can avoid taking routes that may be congested.
- Location sharing in real-time
- Features like Street View and Live View
- If you own a business, you can get your location added on the Map, so people can find you easily.
How does Google Maps make money?
Google Maps has two main revenue streams:
- Advertising (you guessed it!)
We’ve already said a few words about Google’s business model and how it uses advertising to make money. Well, Maps is no exception.
We mentioned above that Google Maps has a search feature that lets us look for places nearby or in a certain locality. For example, your search for “hotels” and results will show up (just like Google’s search engine results) with a list of hotels in the area. And just like in a regular Google search, the paid ones or “ads” will show up right at the top. So businesses can pay to have their physical outlets show up first on Google Maps too. The ads are differentiated from the organic (unpaid) search results by a tag that says “Ad”.
Recall Google Ads and the CPC (cost per click) that we talked about. Ads that show up in Google Maps searches are also linked to a business’ Google Ads account. Whenever a person clicks on the ad, Google charges the advertiser a certain amount. And that’s how Google earns through Maps!
Although Google Maps has started to focus more on monetization through ads, it is taking it slowly, to see how users feel about the change. That’s why you and I are not yet being bombarded with ads and pop-ups like we put up with on YouTube!
Rajas Moonka, Google Maps’ Director of Project Management said:
“We’ve been pretty careful about not being very aggressive about how we present those [ads] to users because we don’t want users to feel like we’re overloading the experience.”
But there may come a day when Google Maps is flooded with ads too, so be warned!
If you own a business and want to add your location to Google Maps and then advertise your business too, we will go through the simple steps briefly in this article at the end.
- Partnerships and sharing Google’s API with businesses
Google Maps is the best mapping service and has an amazing interface. It could be of great use to other businesses too like ridesharing and tracking companies, and many are certainly willing to pay to be able to use Google Maps’ API.
Recognizing this, Google allows businesses and developers to access and integrate the Google Maps infrastructure into their applications. And in return, of course, Google charges them. Recently Google has increased its charges for sharing its services.
Did you know that Uber and Lyft both use Google Maps’ API? They are the two most prominent companies that Google has partnered with. Uber was estimated to have paid $58 million to Google for its mapping services from 2016–2018. Although these are Google Maps’ two biggest partners, there are many other smaller businesses that Google sells its services to as well.
Another way that Google Maps makes money
Although the above-mentioned sources are Google Maps main revenue streams (advertising being the biggest by far), there are other small ways that Google Maps is making revenue.
Do you know the red pin markers that show up on Maps? Businesses can have their pins customized so that they show up with their unique logos and stand out. Google charges businesses for this feature.
“Turn right after the Burger King”- An advertisement trick?
As a new addition, many people have shared their experiences hearing the Google Maps navigation system giving them directions with respect to specific businesses and landmarks! Google however says that this is not part of its advertising business, and this is just to make the user experience better and more fun. However, people were a bit skeptical that this could be have been an advertisement trick!
How can I add my business to Google Maps and advertise it?
Now if you are a business owner and want to make your ads show up on Google Maps, you need to follow these simple steps. First, to add your business to Google Maps:
- Go to “Google My Business” and press “Start Now”
- Type the name of your business into the search box and see if it is already listed or not. If it is, click on the existing entry, otherwise click the “create a business with this name” option.
- Next enter your business’ location, category, contact details, and finally, finish and ask Google to verify your business. Once Google sends you your verification PIN, enter that into your Google business page and you’re done!
Now that you have set up your Google My Business listing, you can show ads on Google Maps too. For that you have to:
- Go to your Google Ads account and enable local extensions. If you do not have a Google Ads account, set up one first. No advertising without Google Ads!
- Bid for the location or area that you wish to target. If your ad ranks high enough, whenever a user searches for businesses of your type in the area, your business ad will show up on top of the search.
- Focus on your keywords: You will have to optimize your keywords for location too now. So whenever you are promoting your business, use location keywords and other things people usually search for nearby.
In conclusion, where is Google Maps headed?
With Google focusing more and more on monetization, the revenue it is earning through Google Maps is growing fast. So much so that Morgan Stanley estimates that in 4 years, i.e. by 2023, Google Maps revenue will have gone beyond $11 billion!
As of now, Google Maps is considered to be “under-monetized” compared to other heavily monetized services like YouTube. But Google is looking for new smart ways to monetize Maps and there may be even more interesting paid features coming up soon. Google is surprising us with better and more every day and is growing stupendously not just as the most loved information provider for users, but as a business too. Its monetization strategy is certainly one of the best and smartest in the world!
It’s Time To Start Making Money With Google!
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