Understanding the value and future of APIs in the travel industry
Published: 06 Jan 2009
A significant shift is occurring in the online world. Websites that have traditionally only published their own content are now able to seamlessly include information from other sources, updated in real time. And service providers have a new channel to distribute their functionality to other sites with established traffic and audiences.
This extended access is made available via APIs (Application Programming Interfaces). APIs are building blocks that allow sites to easily share functionality. A company gives these building blocks to partners by publishing its API. Partners then can use these blocks to build new websites that incorporate functionality from the API.
Chances are you've already seen APIs in action. For example, there are hundreds of sites like the Swiss Trains map (www.swisstrains.ch), which uses the Google Maps API and schedule information from the Swiss train system. Users of MySpace have access to hundreds of API-driven programs; they can easily put everything from games to weather forecasts to shopping lists in their MySpace pages.
By publishing APIs, online leaders are extending their brand visibility, creating new partnerships, and opening new revenue opportunities. The benefits of API publishing are already being realized in categories ranging from news to retail to financial services, and there are many possibilities to generate ancillary revenue in the travel sector by launching an API distribution channel.
Driving Advertising and Brand Awareness
API-driven open content provides an effective compliment to advertising, at substantially lower cost. By providing something of value (open content) to other publishers, API providers are able to get their brand on websites where advertising would be prohibitively expensive or even unavailable.
Content providers such as Lonely Planet, National Public Radio, and the New York Times are leveraging APIs to distribute open content. Partners are building apps around the Lonely Planet API, and the mobile version of the Lonely Planet website already uses the API. NPR is providing over 13 years' worth of content, including more than 250,000 stories and over 400,000 audio files. The New York Times has created several open APIs, so partners can use content generated by the Times in their own applications and content.
You may already offer an API for internal use or privately to a handful of trusted partners, but the real opportunity to use an API as a distribution channel comes from opening it publicly, provided you do so with appropriate and effective controls and management. With a published API, you can create content and let an army of partners push it to where your customers live on the Web, the desktop, and mobile devices. For example, imagine using API-driven open content to leverage sites like Citysearch, desktop info widgets, and location-aware mobile apps.
Delivering open content via APIs beautifully aligns interests. Your brand wins, your partners win, and your target audience wins.
Creating New Partnerships
Affiliate programs have long been a useful means of drawing prospective customers to a website. But as they grow they become challenging to manage, and alignment of interests can be more difficult to achieve.
Partnerships built around API publishing provide built-in alignment of interest, because they go beyond simple linking. Partners can use your API to create compelling, tailored user experiences. "Stickier" content keeps visitors happy, and you benefit from the ability to engage customers without having to entice them to your website.
Here's an example from the mobile content industry: Thumbplay, the largest provider of mobile content in the United States, recently opened its API. In its first two years of doing business, Thumbplay established 40 partnerships. As interest in their API spawned creative new applications built around Thumbplay content, the company was able to almost triple its partner base in a few months. Each of these partnerships has driven dozens or even hundreds of new paying subscribers.
Users of applications that pull from the Thumbplay API are able to see the value of Thumbplay's service in the context of online destinations they already visit. Many APIs provide the ability to embed shopping carts and subscription signups directly into partner content, turning partners into storefronts for API publishers. This capability goes far beyond traditional linking techniques, and again provides mutual benefit for API publishers, partners, and audiences.
Leveraging Aggregated Data
Chances are you have accumulated a huge volume of aggregated data about your customers and their behavior. Imagine how useful that data could be to third parties who offer products or services that complement yours. Data gathered in your primary line of business may actually form the foundation for an entirely new revenue stream.
Here's an inspiring example: Mint is the number one online personal finance application. As over 600,000 users keep track of their finances, Mint accumulates at tremendous amount of aggregated data about how and where people spend their money. Mint does all this without ever obtaining or tracking the individual identities of its users.
Mint is working to build and publish an API, so partners in manufacturing, retail, and many other areas of the economy can access this data for their own consumption or for the creation of new customer-facing applications. Mint will be able to monitor use of that data and build revenue around it.
Now contemplate how much aggregated data your company collects, and how it could be leveraged. Some of the most useful API-driven applications are those that reach across industries and market segments. For example, travel data could be used in financial services, transportation, construction, and other industries.
Further Inspiration
Imagine a mashup that pairs hotel location and availability data with concert tour date information from the Jambase API. What if an indirect travel partner like CitySearch used your API to add your content to a piece they wrote about weekend activities in the Bay Area?
Think about mobile applications. Partners could build location-aware iPhone applications that merge map data with destination information, inbound flight data, or tour departure times. Recall all the times you've wished that you could have access to information from more than one service provider at once. Those situations can serve as the start points for a nearly limitless spectrum of API-driven applications.
(Article has been contributed by Oren Michels, CEO, Mashery)
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