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API Management: Generate Value with Monetization

Aug 21, 2015

Digital assets or services provide real value to customers, partners, and end users. So why  shouldn’t they be a source of revenue for your company and an important part of your business model?

In the pre-API world, monetization was accomplished via long, drawn-out contractual processes, or data sharing agreements. In some instances, data was given away for free. APIs enable you to expose data and services securely, publish it to partners in a scalable manner, and, with a sophisticated API management platform, charge for usage, revenue-share with developers, and track billing in real time.

Sophisticated API management, in other words, provides the robust infrastructure that empowers your business model—and opens the door to new revenue opportunities.

Attract developers, generate revenue

Innovative models, like revenue sharing or pay-by-performance, go a long way in attracting and keeping developers on your platform.

There are many successful examples of how this works today. Take Uber. It offers third-parties who develop on its API $5 to $10 per new user acquired.

Offering data, content, or services via a platform that enables third parties to create powerful new experiences that extend your brand. It also offers a clear path to charging your partners or, indirectly, your end users for the valued content or service.

Pinterest, Instagram, and Facebook have generated enviable investor and consumer interest by creating fresh content, and making it accessible to third-party development for further mashups and innovation.

Google, Yelp, Mapquest, and Stripe enable partners and third parties to access and innovate on services such as maps, location, payments, and real-time offers, ultimately leading to better end-user experience and engagement—and significant revenue.

The price business partners are charged for building on the Google Maps API, for example, starts at $10,000 annually and generates further revenue for the search giant from ads linked to map searches.

Create and derive value

The common thread we observe across these winning businesses in the new economy is one of:

  • value creation via content, data, or services
  • a platform approach that enables partners and third parties to innovate

  • a powerful experience for the end user that creates more traffic, which equates to more revenue for all the players in the ecosystem

In addition to a deep understanding of the market and a clear articulation of value across the ecosystem, it takes a sophisticated API management solution to enable this business model.

To learn more about API monetization and API management, read the eBook, “The Definitive Guide to API Management.”

Blog home page image: Gerald Wildmoser/The Noun Project

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