3 ways of API monetization
What are the goals of your API? From a technical point of view, two software pieces can communicate across the network, either through corporate LAN or via the internet. Usually, these two sides are a client and a server, for example, a mobile app and an online shop back end. Principal requirements for API communications include being fast, secure, easy to create and managed by a developer team.
For the decision makers; let us think about APIs as products, which can be exposed to certain audiences. And when you start thinking about API as products, the next idea should be how to monetize them. What ways of API monetization could there be? Let us list three of them, but you can invent some others as well.
APIs can be offered to more specific and new business partners. While being used, APIs can generate a cash flow with more partners on board to increase affiliate channels with people who can sell your products or use your data.
APIs can be offered externally to the public and increase the client base and/or a direct monetization revenue. An example can be a weather site that sells weather data by subscription or market data and financial statistics.
Google Maps API is a classic API monetization case that is used by many websites around the world. You can try this API for free and even receive free API calls each month. For large commercial traffic this service needs to be paid for, according to the pay-as-you-go model.
A retailer working with an external partner to offer customers a loyalty program, is an example of API for efficiency usage. Providers of loyalty programs are popular, and many retailers collaborate with them. The most important thing in any loyalty program is to measure its value at an early stage, so no time is wasted and it is possible to make adjustments when needed. A retailer can monitor customer traffic on their online store, and measure how many people actually enter their store thanks to the redeemed loyalty points. They can also receive early signals on API traffic with a loyalty program partner. By monitoring API traffic in real-time, day in and day out, important marketing insights can be gained.