The API ROI

Advertisers and marketers, I have good news: there’s a new three-letter acronym! At least for you (alright, us) there is. The newest cousin to ROI, CPM and PPC is: API. Here’s the Wikipedia definition:

“An application programming interface (API) is a set of definitions of the ways one piece of computer software communicates with another.”

I suppose this is a bit lacking. The best way to think about an API is as a way for a programmer to extend and customize an existing application. One of the more popular APIs is for Google Maps. Say you have a really clever idea for an application or a Web site that needs a map. Rather than build the map application yourself, you can simply use an existing one. The clever people behind the Google Map Pedometer did just that. Using the site, you can locate a neighborhood and use the mouse to outline your route. It returns the route’s distance.

APIs are becoming extremely important in Web development. It’s one of the cornerstones of the open source movement. But the opening of the APIs isn’t just for programmers, but for marketers as well.

The Brand Hijack

Alex Wipperfurth writes about a condition he calls “brand hijack” in a book by the same name. He defines this condition as a “consumer takeover,” or “the consumer’s act of commandeering a brand from the marketing professionals and driving its evolution.”

He speaks, in the book, about food and fashion brands (among other things) and how consumers adopt the brand into their lifestyle to a deep degree, making it their own along the way. Wipperfurth sees “hijack” as one of the highest states of a brand’s evolution. It’s hard to argue. When someone makes something his or her own, it’s a level beyond simple loyalty or frequent purchase.

APIs take that notion and into the interactive world. An API is an invitation to further innovation, and very frequently, toward greater value. The original release of Google’s Map application was good because of its interface innovations. But its invitation to others to build on top of it propelled it, very quickly, to its high level of popularity. A community of clever people helped drive a basic application toward its true value proposition.

APIs: Out from behind the Scenes

Fact is, APIs already help a lot of online businesses get up and running in new and creative ways. eBay has long offered APIs not only for developers, but also for their affiliate programs. The pay-per-click (PPC) advertising providers such as Yahoo and Google have APIs that enable you to control bids from your own site or application. We’ve seen clever applications where affiliate marketers have been able to take product feeds from advertisers and automatically turn them into paid search ads on Google, for example. There have also been applications that tie multiple applications together to provide reporting and forecasting functions. Marketers have clearly benefited from these APIs, even if they’ve never thought much about them.

We’re beginning to enter a new era in Web development in which the ability to pass data between applications via APIs allows brand new consumer experiences. Marketers have an opportunity to think about ways their brand could blend its functionality with other Internet services to create new, memorable experiences.

Ning, the just-out-of-stealth mode Marc Andresen project, is built entirely on this idea; programmers can built on top of services like Flickr, Craig’s List, even Hot-or-Not.

The API revolution ultimately presents a great new set of opportunities to agencies, which consistently seek new exposure opportunities for their clients. APIs may provide an agency with a new way to forge connections with consumers. I know of at least one agency that’s actively working on an application that blends their client’s brand with Google Maps, and I expect there to be many more as marketing minds begin to explore what APIs can offer.

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