This technology enables marketers to generate money from digital online content that someone else created, says Eryan Petersen, Microsoft's advertising evangelist.
At a panel discussion Monday at the OMMA Global Hollywood conference in Los Angeles moderated by Petersen, she said, "These tools make it easy to add content onto a publisher's site, unlocking value for brands without [their] having to do the work to create the content," likening APIs to Lego building blocks.
These slivers of programming code that connect widgets or applets to platforms like MySpace or Flickr can generate revenue for Web sites that rely on consumer-generated content to survive.
YouTube, Wikipedia and Facebook have all capitalized on contributed content through APIs.
YouTube, with its 206 million users and about 185% yearly growth, has learned how to monetize user-generated content without having to create it internally. Wikipedia's 211 million users have contributed about 8.2 million articles for free. Facebook has about 69 million users about 300% annual growth, Petersen says.
APIs make it possible for Picnik, an online browser photo editing tool that has made its way into popular apps, to share revenue with Flickr and others. The company created APIs to let advertising and marketing agencies, along with consumers, connect Web sites with creative tools and applications.
Picnik also has entered into talks with camera manufacturers and other photography-related companies to sponsor editing tools that may integrate into social network or photo-sharing Web sites as a method to generate additional revenue.
Every minute consumers spend with Picnik's applications means more exposure to brands that sponsor the tool. "The average user session is about 17 minutes," says Monica Harrington, marketing guru at Picnik. "Brand marketers want to figure out a way to get close to the consumer that's not intrusive."
Monetizing widgets, applets and snap-on applications, Seattle-based Picnik has plans to launch a printing service, along with a tooth-whitening feature that allows users to whiten one or many teeth in a photograph before posting it online.
Still, an increase in more applications means sites will begin to control the number of applications posted to the site because too many applications can cause a drop in traffic.
"Facebook, for example, recently experienced a drop in visitors to its site and now plans to control how many applications are distributed," says Daniel Mathews, enterprise evangelist at Microsoft.