Wondering how Google Maps makes money? The app has no visibly running ads like those we see on websites or YouTube, but the company spends millions of dollars in its development and yet offers it for free from the App Store and comes pre-installed on most Android phones.
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Google’s monetization strategy when it comes to maps is broken down into two main categories. Given that Google is an advertising company at the core. I don’t think you’d be surprised to hear that the first category is ads, but it’s done in a tasteful helpful manner.
Stealthily placed Ads
You know, how when you pan around Google Maps, you see businesses like Pharmacy and Shopping All and Java House. Well, listing a business or location on Google Maps is completely free and anyone can do it provided you have the right documents and rights. If you want to take this to the next level though with custom branding and high visibility, you can pay Google a fee and make your listing a premium listing.
To be honest, this seems like a win-win scenario users can find business more easily with their logos and the companies can increase their branded presence in a discrete non-intruism manner, but all of that is only half the story.
Google Maps APIs are minting in big dimes
Google’s other motive when it comes to monetization is honestly far more interesting, it is APIs. An API is an Application Programmable Interface, think of it as a contract of service between two applications. You know how when you go to a website of a local restaurant, you will sometimes see a small map showing you the location of the venue. Well, companies can do this thanks to Google’s map APIs for which they have to pay.
And that’s more of a small use case. Imagine what happens when someone like FedEx, Uber, Airbnb, Implement Google Maps. All I can say is that that would cost quite a bit of money. And that’s just the most obvious implementation of Google Maps.
Google Places API
Likely the most commonly used Google Maps API has nothing to do with maps directly. Do you know how when you start entering in a billing address or a shipping address the address and it autofills? Well, that’s thanks to the Google Places API. Basically, every company in the entire world that collects address information, it uses Google Places or a direct competitor, like Microsoft’s Azure maps. If they don’t, they’re probably stuck in the 1990s.
Google Places is relatively cheap, it’s only about $0.3 per use, but think about how many times you use this feature every year, maybe 10 times per year. That itself is 30 cents worth of revenue for Google. For example, if three billion people were to do this every year that itself is one billion dollars worth of revenue for Google from just one API. I think you can start to see how all of this can add up to 11 billion dollars when you throw in hundreds of different APIs and use cases.
Even putting the financial aside, thanks to Google Maps, Google has been able to map out the entire globe in pinpoint detail. This means knowing the exact address and location of any and every commercial and residential property in the entire world. And if that itself wasn’t enough they also know the exact location of billions of people on this highly detailed map at any given point in time. If that isn’t an insane amount of power.
