Tuesday, March 10, 2009

Does Google Charge Itself API Fees?

I was looking at our firm's Google AdWords API bill this morning, and all those huge numbers reminded me that as Google becomes more and more of a competitor to the companies comprising the ecosystem around it, they have the distinct advantage of not having to pay AdWords API fees.

Does anyone know if the department within Google that uses the API makes an internal transfer to the department that runs the API? I seriously doubt it.

API access & associated fees are the SEM industry's water rights issue, and Google, as landlord of a large agricultural district that it has come to own fair & square, is now making the same mistake as their presidential candidate = not trusting free markets. By charging API fees to SEM firms but not themselves, Google is preventing SEM firms from investing to their fullest in building solutions that help advertisers profitably spend more on AdWords. Every dollar an SEM firm must spend on API fees is a dollar less spent on support for targeting functionality, or better client services, or marketing to get that technology in more advertisers' hands.

In a real way, Google charging API fees is driving down rents on the land Google owns - not a smart move for a landlord to make. So Google, as you think about how to overcome the macro-economy's effect on your SEM world, please rediscover free market economics and realize that the SEM community - if freed from unequal access to the water you lord over - will do that much more to help your/our customers spend more on AdWords.


Blogger Sanantonio said...

Hi Chris - not sure to fully agree with you on this! Developing and maintaining the API incurs a cost for Google and they somehow have to pass that cost to the partner or final client? They could - as you said - factor that in the increased ad spend flowing in thanks to their partner, but how could they anticipate how successful would be one of these partners. Removing the barrier of entry would also mean opening such market to everyone and everybody! Couldn't this backfire at G? Cheers - A.

5:41 AM

Blogger The Lucster said...


I hear you, but reality is that the API lets advertisers and agencies do more in AdWords - more keywords, more ad copy, more product, more bid - all of which allow them to profitably spend more on AdWords.

The API is used by (my estimate) >25% of Google's aggregate spend, primarily the larger advertisers whose spend is growing at a faster rate than smaller advertisers (according to Google's Q2 '09 earnings call). So we know that the API benefits Google as much or moreso than 3rd parties.

Finally, the proof is in the pudding - neither Microsoft nor Yahoo charge for API access, nor does Google itself charge API fees in markets like China and Korea where - unlike U.S., Europe and LatAm - *they* have <50% marketshare. For that reason as much as any other, the argument of API fees being justified by Google's cost incurred doesn't hold water.

10:55 AM

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Comment by media job,

If you are a consultant who creates or hosts Maps API Implementations for third party customers, you may charge such customers a fee for your consulting or hosting services.

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Blogger nigel said...

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3:21 AM

Blogger nigel said...

I am Jude from the get backlinks site, I think google is not charging for it. As far as I could recall, just like google earth or google maps, it was just for free. So it could be for free maybe.

3:23 AM


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