API Marketing

Not a day goes by that a major Internet business is releasing or updating their (Web) API. Web Services have become one of the key strategies for Internet businesses these days. This is not only happening in 2009, API technology and its standards like SOAP and later REST have been used for years. However what is new is that this technology is not only seen as a technical enabler but as a commercial enabler for new business opportunities.

Caterina Fake, co-founder of Flickr, called it BusDev 2.0 already in 2006 (http://bit.ly/K0eJk). Kipp Bodnar just wrote a very good blog post on APIs as the new marketing platform (http://bit.ly/9wg4d): “If I was a CMO, I would take some of my marketing budget from traditional media buys and creative work and use it to hire a small group of extremely talented web developers that have experience using API’s to develop simple and easy to use web applications.” I couldn’t agree more. Providing access to their services via APIs has been a major winner for several companies: Salesforce, Twitter, Flickr, NPR, just to name a few. These companies have managed to gain platform leadership – and their API plays a crucial role in that. And many other companies are following: from e-commerce over content & media, business services to the government (for the latter one I hope that European governments are at least watching closely what is happening in the US in terms of government 2.0).

What larger Internet companies have been doing for some time now, many mid-tier and smaller companies are following. Launching an API has not only become a core part of the IT strategy, new developer tools and the rise of RESTful Web Services have made it easier and faster to build an API in the first place. Many Internet businesses however still haven’t done the switch from an open API (without access control) to a managed API (with access control). The provisioning of key management systems, monitoring, analytics and billing systems is not easy, but it is the key to exploiting this technology as a revenue driver. My company 3scale enables companies to leverage their API through a SaaS based API management solution that can be implemented in just a few hours, allowing any kind of Internet business to manage their API.

What are the key benefits of providing a managed API:

1. Reach & Relevance: With the size of the web reaching 1 trillion unique URLs, there are good and bad news: although there are every day more possibilities to promote products & services, it is also always more difficult to get noticed. APIs provide a key enabler that allows Internet businesses to go beyond their own website and try to be visible on every other website.
2. New distribution channel: APIs can simply be seen as a new distribution channel. While the original website is usually the main channel, APIs allow to reach, promote and sell the company’s content or functionality to other websites. The main difference to RSS however is that the content user (the mashup) can be identified, monitored and charged for their usage.
3. New business model: APIs allow a new way to create new business opportunities. I usually differentiate between a direct or indirect business model, meaning an either direct way to monetize the content or functionality usage of a user (by hit or flat rate) or simply an indirect way of commercialization, meaning not being charged for the actual usage, but leveraging traditional business models through increase of reach.
4. Innovation & Synergies: Due to flexible integration and re-usage of content & functionality on the web, APIs foster innovation. The next major evolution cycle of the Internet will be a web, mashed-up from various sources of raw data, exploiting synergies to create something new with additional value add.

Looking at data from Programmableweb.com shows a strong increase of available APIs (1278 at the time of writing and doubling every 12 months) and even more Mashups (3905), however the real amount of APIs is likely to be much higher and the growth rate is accelerating. At 3scale, we are looking at these trends very closely and believe that we can contribute to the thriving ecosystem of the programmable web.

Further reading:

• APIs are the next Marketing Platform
• Why API as a strategy
• Why is it so important to have an API as a marketing strategy

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