SEMs Welcome Google to API Club

Following weeks of rumors about Google’s release of an AdWords API (define), the company formally released a beta version of the technology Thursday.

Search engine marketers, optimizers and tool vendors say they’re looking forward to integrating their own search campaign management tools more closely with Google’s. They’ve been able to do the same with rival Overture’s tools since 2001.

An API, or application program interface, allows developers to write code that allows one application to interact directly with another application or database. The API in itself does not offer any functionality, but it allows developers with the required technical skills to write applications that utilize advanced features.

“It’s not so much of a new product as a different way of accessing AdWords,” said Nelson Minar, the lead software engineer on the AdWords API project.

Google suggests the tools could be used to generate automatic reports on keywords, ad text and URLs. An advertiser could, for example, set up rules to outbid a competitor by a set amount whenever the advertiser is outbid on a keyword. While this is possible without using an API, it would be prohibitive for larger advertisers who manage hundreds or thousands of keywords. AdWords data could also be integrated with other software, such as that controlling inventory or financial management, allowing a retailer, for example, to automatically deploy ads aimed at selling excess stock.

Access to the Google API is free, but users have a quota based upon the spending levels of the accounts they manage. For agencies, this would be dependent on their clients’ spending; third-party software developers would be allocated a quota based upon their users’ spending levels. Because the situation with software makers could grow complex, Google says it’s using the beta period to iron out the details. Competitor Overture lets advertisers use its APIs for free, while third-party developers and technology providers are charged a fee to cover costs incurred to maintain the system.

An important effect of the release of the AdWords API is that developers will be given an opportunity to innovate in paid search. When third-party providers have more control over the interface between their tools and Google’s system, they can then create applications that make better and faster decisions about things like bidding strategy.

“When you can connect a software tool directly to another software tool and have real-time data and faster connections to their network, you’re going to be able to do more interesting things. Any time you release an API, you set the stage for innovation,” said Fredrick Marckini, CEO of search engine optimization (SEO) firm iProspect, which has proprietary bid management and campaign optimization technology.

Google’s Minar agrees, saying, “The thing about an API program is that people build things that you didn’t anticipate.”

Yahoo’s Overture has offered access to its set of APIs for campaign management since 2001. Through its Advertiser Web Services (AWS) platform, hundreds of developers have signed up to use the APIs to hook into features that are available to individuals through Overture’s Direct Traffic Console. Developers can access the API for things like managing bids, adding, modifying or deleting search listings, or getting cost data reports.

Though the number of users who have signed up for the AWS program is not large, the amount of business they control is significant. Most are agencies that handle multiple advertiser accounts, or tool providers like Atlas Search and DoubleClick.

Larger advertisers and agencies tend to build access to the suite of APIs directly into their own applications, while smaller advertisers may access a single API to create a script that generates a single report or performs bid management functions, said Dan Boberg, AWS program manager at Overture.

Atlas DMT uses Overture’s APIs to hook into these functions with its Atlas Search bid management tools, and expects to do the same with Google’s APIs. An API can minimize human error and inefficiencies, as well as make possible advanced tasks that would be unwieldy to do manually, said Nico Brooks, director of search technology at Atlas DMT.

“The power is in the efficiency, automation, and depth of integration,” he said. “An API as a programming interface allows a quality of service that’s difficult to achieve when relying on humans.”

Another effect of a company like Overture or Google releasing its APIs is a deepening of the relationship with key customers. “It says they care about the needs of larger advertisers. It shows a level of confidence,” Brooks said.

Industry watchers say the release of the AdWords API will have both immediate and long-term impacts on the industry. It will first benefit bid management tool providers, but the long-term possibilities go beyond that, said Niki Scevak, JupiterResearch analyst.

“An API gives developers the flexibility to innovate, which will be good for advertisers,” Scevak said. “It will also drive more efficiencies in the market, which could drive keyword prices up and widen the gap between sophisticates and non-sophisticates.”

A recent JupiterResearch report found that only 25 percent of search marketers use sophisticated bid strategies and measurement techniques, and those who do are more likely to be old timers, big spenders and direct marketers.

Companies like Amazon and eBay have courted developers for years. More recently, analytics vendors like WebSideStory and ESPs like Bigfoot Interactive have created programs to encourage others to use their APIs to innovate around their products.