Why APIs are big business for brands

We look at how application programming interfaces and an open approach to data and functionality are creating new sales and marketing opportunities for Australian brands

No one ever got rich from giving something away for nothing. Except perhaps, Amazon.

In 2002 Amazon’s CEO, Jeff Bezos, issued an edict that all teams in his company were to expose their data and functionality through service interfaces. This was accompanied by other directives aimed to promote openness and interoperation.

Bezos signed off: “Anyone who doesn’t do this will be fired. Thank you; have a nice day!”

The edict gave rise to the creation of a service-oriented architecture within Amazon, with all interactions managed through application programming interfaces (APIs).

It also gave birth to a phenomenon which Forbes dubbed ‘the API economy’, in an article in August 2012, describing how many of the leading online companies such as eBay, Twitter, Facebook, Salesforce, Netflix – and of course, Amazon – publish APIs for the easy exchange of information between their systems and those belonging to third parties.

An API is a means of expressing the functionalities of a component of software, such as its operations, inputs and outputs, to provide a simplified and standardised way of integrating it with external systems. Unlike older integration methods, such as direct integration, changing aspects of the software does not immediately break the integration.

APIs have become a key element of the Internet, allowing organisations to link together different processes and datasets to boost the functionality of their own systems.

Although often considered as part of the ‘plumbing’ of the Internet, APIs are big business, with Forbes reporting that Salesforce was generating more than half of its US$2.3 billion in revenue through them in 2012, rather than through its user interfaces.

But is it a concept Australia’s largest online players are willing to embrace?

APIs in the field

Examples of APIs in common usage are growing rapidly. It is now estimated by API integration technology specialist, MuleSoft, that there are more than 13,000 APIs in existence.

Regional vice-president for Australia and New Zealand at MuleSoft, Jonathan Stern, describes APIs as a great way to tap into the “digital exhaust” produced by companies such as Facebook, eBay and Amazon.

“More and more organisations are going to subscribe to applications or functions or processes that may be outside their walls,” he says. “These components of functionality are of some value on their own, but they are only really of business value once you get it all connected. And that’s what we are seeing.”

According to Stern, APIs hold significant advantages over older methods of integration, such as XML and creating point-to-point integrations.

“Point-to-point integrations between two systems are fine, but once you add additional systems the number of points grows exponentially,” Stern says. “Any change to one system has a knock-on effect throughout.”

Numerous companies are signing up to the API vision, such as the online advertising technology company, AdRoll, which recently announced a relationship with Apple that enables it to access inventory in the iAds network through an API.

More on this topic: Razorfish Australia's Doug Chapman discusses how to live in the era of APIs

Managing director for AdRoll in Australia and New Zealand, Ben Sharp, says APIs allow complex tech integration between two different businesses to happen relatively easily.

“It allows us to integrate with other large platforms out there and combine multiple data source to deliver efficient and effective marketing campaigns,” he says.

What can be done with APIs is also expanding rapidly. Amazon’s senior manager for technology solutions in Australia, Glen Gore, says his company’s API strategy initially focused on building scale for its product catalogues by enabling other online services to hook into them.

“Leveraging more channels for that product catalogue, and leveraging the logistics behind it, will drive higher volumes of sales, which drives better buying power and drives lower costs,” Gore says.

Read more: Google discloses tech specs for Glass and bans ads

Today Amazon publishes a plethora of APIs, covering functions including its recommendation engines, product information, advertising, in-app purchasing, virtual currency and more. Gore says the goal is to make it easier for third parties to leverage as much of the Amazon.com product platform as possible, because ‘running big online experiences is not simple’.

“There are APIs that help you earn, there are APIs that help you engage with your customer, and then there are APIs that help you with the experience,” Gore says.

Next page: ebay, Dick Smith talk APIs

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Thanks for your feedback, Rabi. While we introduced the ROO concept using a marketing example, I also believe that it is pertinent to man...

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Thanks for your insight, Philip. Return On Outcome (ROO) requires balanced thinking with the focus on outcomes as opposed to returns.

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Beautiful article.

Hodlbaba

15 brands jumping into NFTs

Read more

"Blue" is really gorgeous and perfectly imitates a human customer support operator. Personally, I won't order a chatbot development for m...

Nate Ginsburg

Why the newest member of BT’s contact centre is a chatbot

Read more

As today’s market changes rapidly, the tools we use change, and it is important to adapt to those changes to continue to succeed in busin...

Anna Duda

Report: 10 digital commerce trends here to stay

Read more

Blog Posts

How the pandemic revealed the antidote to marketing’s image problem

What does marketing truly ‘own’ in most organisations? Brand and campaigns, definitely. Customer experience? That remains contested ground.

Murray Howe

Founder, The Markitects

Still pursuing a 360-degree view of the customer?

On the Internet, nobody knows you’re a dog.” It may have been true in 1993 when this caption to a Peter Steiner cartoon appeared in the New Yorker. But after 30 years online, it’s no longer the case.

Agility in 2022

Only the agile will survive and thrive in this environment and that’s why in 2022, agility will need to be a whole-business priority.

Sam McConnell

Melbourne bureau chief, Alpha Digital

Sign in