• by Laurie Sullivan  @lauriesullivan, November 8, 2016

Google Maps on mobile devices has become the cornerstone for local advertising. Now an analyst firm estimates the revenue opportunity for Google from Maps at about $5 billion by 2020.

Senior Research Analyst at Baird Capital Colin Sebastian called Google Maps, a free-to-use consumer tool "one of the company’s largest untapped revenue opportunities" in a research note.

"We estimate Maps will grow into a $5 billion incremental revenue business over the next 3-4 years, contributing as much as one-third of the company’s advertising growth by 2020," he wrote in the research note. "We note that $5 billion would equate to roughly $3.50/year per Maps user, or significantly below the overall $40+ in annual Google Advertising revenue per user, despite the high value of local-targeted ads."

The analysis comes following a small business event Sebastian recently attended in which the company provided an overview of the next generation of Google Maps.

Sebastian also called Google Maps "one of the most successful applications geared specifically to handle local search, with more than one billion active users, and 92 countries fully mapped via street-view."

He wrote that while 60% of Google search queries already incorporate some form of local intent, the location-related searches are growing 50% faster than mobile searches overall.

Today, Google supports a variety of new local advertising formats including search ads, as well as Click to Call and Click for Directions buttons in the mobile app. It also offers Promoted Pins featuring brand logos, promotions to drive store visits, ability to build custom business pages, and local inventory search. In the future that will evolve as the company builds out services with its "strong product and engineering skill-set."