REST API, today more commonly referred also as simply API (Application Programming Interface) is a set of tools, protocols, and routines for developing a software application. An API also expresses the software component in terms of inputs, operations, outputs and underlying types. Developers spent countless hours developing APIs for their application. Once the API has been built and have passed RESTFul API Testing by your testers from end to end, you can say that your API is ready to be out there.
On the marketing side - your developers, testers and architects follow the standard guidelines, best practices, and listen to end users feedbacks in order to improve their API as well. One thing you might not have figured out is how you’ll make the profit with your APIs. This article will guide you about API monetization and things to consider for the same.
The social, mobile and cloud are greatly changing the ways how businesses and customers connect, how businesses engage with their customers and employees. APIs are a foundational technology that enables companies to participate in the digital economy.
REST APIs open up a new potential for creating entirely new businesses models and for creating new primary channels for products and services that eventually make money.
Why more and more companies are building REST APIs and Push to Monetization?
- To Extend the Brand and make it more effective
- To Extend the Reach to more and more customers
- To Actually Make Money, because you are giving a service though the API.
Who are going to pay?
- No one
- The Developer
- The Enterprise (to the developer)
- The Customer (to the enterprise and/or developer)
The very first thing you should consider is that what you should charge for and who will be going to pay for API usage. You should first choose an API business model in order to start monetizing your APIs. The business model will help you the best chance to monetize your APIs.
In order to determine if your APIs are going to be profitable, you must measure it. A simple ARPU (Average Revenue per User Model) will help to decide how to increase the revenue, whether by attracting more users or increasing the price.
Most Popular : Free API Usage
The Rise of REST APIs is a fact. They are becoming more and more a standard even in the enterprise world, many of the APIs have free usage. With this model, accessing the REST API is free, no charge. The goal of this approach is to enable the users consume more and more resource from your services using the REST API. By consuming more resources, users are moved to a higher plan or, if you offer a free plan, to a paid one.
The result of this model is that users will probably use your application more and in more sophisticated ways. They will have different ways of interacting with your app’s features whenever using any third-party app or integration. By doing this, they will be more engaged with your app and eventually they will have to move into a paid plan that supports their usage pattern.
Tricks to monetize API
When talking about making money from APIs or API Monetization there are some tricks organizations or developers should follow in order to monetize their APIs.
Some of the useful tricks include:
Directly charge for your API
The best way to monetize your API is by directly charging for it. But it is most challenging as well as you must know if your data has the kind of value that customer want to pay for it, and how much. You can start with a free prototype for your targeted customers and wish it leaves them waiting for more.
Giving API Access as a Premium Package Feature Opportunity
It is highly used service in Software as a Service (SaaS) world. Offering Premium subscription to your APIs allows a strong motivator to upgrade the service to even a higher package, as it also allows the end user to customize their workflow and experience more easily.
Drive Revenue-Generating Activities
It generate indirect revenue for your APIs and so this model requires the most effort to track. This model is also very useful for your overall business goals. Another method to track if your APIs are actually running successfully if you deal a PPL (pay-per-lead) agreement with your customer and can track your revenue through CRM.
Improve operational efficiency then market
Developers must give their most of the time in developing and improving their application's APIs. If your API is well built that is properly managed and secured and your developers treat that internally focused audience is your customers then you can definitely get every kind of benefits.
In this blog post about monetizing your API there are some useful tips you must follow in order to get all the benefits using your API.