|Changes to Adwords API Program:Quota Fees Start July 1|
Google has announced changes to their Adwords API program. Starting July 1, users will no longer have limited quotas. Instead, they will have unlimited use of the API, but pay a fee of .25/1000 quota units.
Link to announcement at Google Groups:
Link to new API terms:
Reaction seems mixed. Some are incensed at having to pay. The requirement for commercial apps to implement the entire API remains, and I think is a problem - it makes it impossible to develop commercial niche apps.
This is, however, a big win for small advertisers and developers. Previously, they were locked-out of API use by extremally low quota allocations. (Typically, 15,000 units/month.)
The big losers are the bid management companies which frequently access Google's DB's and will now have to either absorb this cost or pass on to their customers. Google does like to have intermediaries between them and their customers. Which is why businesses doing their own bid management may not have to pay for API usage (yes, read the fine print).
[edited by: bakedjake at 5:04 am (utc) on April 15, 2006]
[edit reason] removed specifics [/edit]
Is my math wrong in assuming this will come out to about $3.75 per 15,000 (as was the previous dev. tok. limit?)
I think I heard about this last Octoberish. This has been in the works for at least 6 months now. There were a few bid management agencies complaining about it openly at Chicago SES in December, even though I'm about 100% sure it was supposed to be treated as confidential information under an NDA. ;-)
No one should be too surprised - Google needs to start diversifying its revenue somehow and this is a logical next step.
Personally, I think it's a good thing. The type of companies that require a large amount of queries don't mind having to pay for reliable access and support to something they absolutely need. At times the API has been flaky in the past. That said, section 4 paragraph 2 is fairly amusing.
I'm shocked to see people only having 15,000 quota units, we were not a huge advertiser when the last reduction was made and we still get 1,500,000. Had we have been spending what we are now then I'm sure it would have been higher. Maybe that's the entry level amount for people with MCC's.
I suppose that people with lots of units may rush to use up their quota before they have to pay for it, has Google thought of this? We certainly will be doing that, mainly for analysis of a campaign that has 30,000 terms in it.
If you need to get detailed stats in an automated fashion then Google has just put a time limit on doing it for free.
1,500,000 @ 25c/1000 = $375 would be the monthly cost for us if we were regularly using all of our quota. That's a fair amount for a service that has no SLA! (but I'm guessing overall revenues from the API will contribute much less than 1% to the Google bottom line)
I can understand why Google needs to make folks pay *something* for API usage - if they don't then people will be inefficient in their usage of it. Since the API fees were first proposed in October, Google has lowered the pricing significantly based on legitimate feedback from the SEM community.
In this case they've shown themselves understanding of the value of the SEM community; perhaps a weaker-than-expected Q4 helped that.
Section 4, paragraph 2: does not create any estopple [google.com]?
it might be less about revenue and more about restricting resourcces. in weeks past, we've seen quite a number of articles in the press citing google's concern over expensive computing power being consumed amongst their programs, from google earth to adwords. even google feels the burden of huge costs associated with running multiple datacenters--and such costs need to be passed on. Having an API without any restrictions is not exactly wise. and the best way to set limits, is to make it available at a cost--a cost that likely covers their expense. I can't see them really wanting to pursue this endevaour to make a profit though. It seems like a value-added service from the start to make adwords more attractive than, say, overture.
IMO, there are deep flaws in the underpinnings of today's context-based advertising. This goes for both Google and Yahoo.
From a relevance standpoint, the notion of using keywords to determine relevance is laughably simplistic. At the same time, the computing cost is high - due to sheer volume - rather than complexity.
The problem is the need to maintain "bins" to gather statistics on keywords. Every keyword needs a bin. And each instance of a keyword used by each advertiser needs it's own bin. Every time the keyword is used in a search, the bins have to be updated. It's computationally simple, but the volume is astronomical. As a result, Google has to ration bins.
This is why it's difficult/costly to get a new/rare keyword activated. It's a shame, because we know there is great value to be found in mining the "long tail". But the current system of keyword-based contextual advertising makes mining the long tail prohibitivly expensive. The whole system is self-defeating.
At the same time, the means by which advertisers control where their ads are seen is primitive. They have to exhaustively list keywords and permute them in ways that they think user's might when doing a search. I'm not sure that it should be necessary for advertisers to do this at all - perhaps the system should best do this on it's own.
If additional input is to be taken from the advertiser, are keywords the most effective input? I think not. I think better would be demographic critera, and/or free text descriptions of target audience and target search.
At some point, I think we have to arrive at a system that understands the semantics of the ad, landing page, search, and advertiser presentation criteria.
Of course, this goes for the search itself, as well as contextual advertising. You're not going to have a truly satisfying and useful search experience, until the system "understands" both the search criteria and the landing pages.
This is, of course, significantly more complex than updating keyword bins. At the same time, I believe that the ultimate solution will eliminate the need for exhaustive use of computationally simple operations. So, in terms of cost, it's a matter of when will a smaller number of more complex computations be more cost-effctive than a large number of simple ones?
The problem of semantic analysis is one that I don't believe computer science has adequately solved - although there certainly have been efforts made for at least the last 30 years.
I do think it's solvable. I certainly hope the bright people at Google are working on it. If they don't solve it, somebody else will.
|Having an API without any restrictions is not exactly wise. |
Agreed. "There is no such thing as a free lunch."
|It seems like a value-added service from the start to make adwords more attractive than, say, overture. |
Overture had an advertising API long before Google. It's just expensive, which is why a lot of people don't know about it.
Any news so far on if there will be some sort of "free allotment" beyond which you pay the new quota fees?
Our current API quota is 30,000,000 and this would translate to $7500 in monthly cost if this just suddently converted over to a pure charge system. Are current API users all of a sudden going to start getting giant bills, or does the new system mainly allow us (or anyone else) to move beyond their free allotted number for the .25/1000 charge?
A very big German Adwords API user was told that there will be free quota based on advertising spend:
I personally think that we are underestimating what google is and how they perform. Google has become such a giant in the industry that we have expected low rates and high returns from them as they have been very generous all along with testing, free sign ups, free accounts, invitations, analyzing software, conversion tools....etc. and so on. We can't forget that google is still a company that is in the game to be profitable (which they are). However, it is a very wise move from a business stand point to take the mass population using their services and start to actually convert dollars in various ways rather then just advertisment spots, their software is very valuble to the industry and we all know that majority of the industry now relies on it. Adwords is such a loose open ended source of income and advertising method for many people as it is used and abused by many to gain some extra dollars that has very few current restrictions on it. This is flooding the web with pointless unimportant advertising that is wasted space now a days. Putting a quota price in effect will force advertisers to re-think their strategy for better quality ads knowing that there is money to be lost now. This also puts into thought that now the big guys and little guys can compete for advertising spots. Large companies will bring their advertising campaign prices down as they know they will not see a return on investment like they used to by flooding top bids for spots. I think what google is doing is great for their business and also stabalizes the online advertising industry for the future.
BarHopper I think you may be talking about something else entirely...
We are talking about paying for access to the API; this has nothing to do with making advertisers become more efficient or curbing "flooding the web with pointless unimportant advertising". The vast, vast majority of advertisers use the standard AdWords UI to manage their accounts.
The fact is that if developers, agencies or other entities create tools that allow advertisers to be more efficient, or even if they simply create integrated interfaces to manage campaigns, this will be *less* of a strain on Google's system than if the user is in the normal AdWords interface making, let's say, the same update. From a bandwidth and CPU perspective, Google should be thrilled if we use our internal tools to add a keyword or pause an adgroup, rather than logging into the adwords system and making the same change. Furthermore, if we roll out a dayparting tool or ROI maximization tool or anything else, and this allows our clients to be more effficient and allocate more funds to search marketing, this is all good news for Google.
There may be those out there using the API that are a true drain on their systems, and perhaps there is some sort of certification or approval process needed to give major API access, but simply demanding payment is quite backwards-thinking in my opinion.
I think this is a good move on the part og google. And I don't think it's motivated by profit. I think it's motivated by quality of service. There are getting to be more and more API using tools out there that consume vast amounts of resources in what they do. And that affects the QOS that google is able to provide.
There is no way that you could do some of the things that these tools do by simply using the web based adwords management interface. Some of these tools take instructions on a project to research and come back hours later for a report. What do you think the tool is doing for those hours? It's hammering the API.
I think that google is introducing this payment option because they want to rein in those users who are basically brute force attacking the API to squeeze out data.
The whole point of PPC advertising running along side "organic" results is that PPC provides results that real people think will be relavant. It adds to google's mission to be as relavant as possible. But when more and more people start using 2000 phrase long KW lists for every adgroup we start to hit the law of diminishing returns.
There are just about a million words in English. But the average person's vocabulary is somewhere between 10,000 and 20,000. Now take into account that the average length of a search query is abuot 3 words, and you see that there's a limited "keyword space" In other words, there are really only so many 3 word combinations you can make with 20,000 words. (ok 8,000,000,000,000 is a pretty big number, but limited non the less) and you have to take into account that the vast majority of those KW combinations just don't make sense. I'm willing to bet that any advertiser trying to use "dog paint safari" would have a hard time getting any impressions. But I'm also willing to bet that with the current trend, this will be a KW in use somewhere. (Almost too late. Target has Dog Paint already.)
My point here is that using the API to make management easier is a great thing. But using it for data mining is veyr resource intensive. And arguably, the results of data mining are not what google intends for it's PPC product. Data mining is (loosely) what it does to get it's own results.
I agree with pretty much everything in the last few posts. They need to limit use and force people to be economic with the api use.
But should they also not take the view that UI use is more resource intensive than API use¿
i.e. give a free quota with top up charges for those who want to use a larger share than their ad spend share. (And for agencies, why treat differently¿)
(p.s.anyone know how to find the right way up ¿ on a PDA¿)
You are all missing one big point - the changes to the AdWords API program also restrict how commercial bid management companies can display Google data.
Read this part from Google's revised Ts and Cs:
"Inputs Fields. The AdWords API Client must not show in the same area of a page, or otherwise visually or functionally associate, any input fields for collecting or transmitting AdWords API Campaign Management Data with the content of Third Parties or input fields for collecting or transmitting data to Third Parties. For example, an AdWords API Client must not (a) use the same input field or button to collect or use data that will be used as both AdWords API Campaign Management Data and also as data or instructions for a campaign on a Third Party advertising network, or (b) use input fields or buttons to collect or use data for AdWords API Campaign Management Data which are visually adjacent to input fields or buttons that are used to collect or use data or instructions for a campaign on a Third Party advertising network."
In other words, don't put Google and Yahoo functionality on the same page.
Or maybe "Don't use the Google API to spend money with Yahoo."
so - the interpretation is, companies (say, brand marketers) that do their own bid management won't have to pay a quota, but developers of bidmanager tools WILL? is this an accurate read?
Oh, and what was the scoop on that german API user saying that s/he would get a free quota up to a point, based on ad spend? Any more illuminations on that? Thx...
No, the issue is this: everyone will pay a quota BUT if you are a commercial developer (if you are releasing a bid management tool for use by the public) you CANNOT create a user interface that has Yahoo Search Marketing (or any other non-Google search engine) and Google ads on the same page. For example, you could have one part of your UI called "Manage Google", and another called "Manage Other." Think of companies like Atlas OnePoint. Instead of a user clicking on "change all my bids in Google and Overture to a 20% ROI goal" now the user will have to say "change Google to 20% ROI" then go to another page and click on "change all other search engines to 20%." Maybe I am reading this wrong and maybe I misheard what some Google folks told me, but this is what I think is happening.
We've been told that it's a "clean slate" start on 1 July.
Existing API quotas will not be "grandfathered" in - regardless of ad spend.
Might have to query that slightly.....
DavidZHawk hits the nail on the head - self-service bid management tools which co-mingle Google & Yahoo (& other SE) data/management on the same page fall *outside* Google's new API T's & C's.
This may be as simple as Google Legal going somewhere Google Sales & Mktg didn't want them to go (a communication problem), but I tend to think this is a strategic move by Google to
a)prepare the market for their own keyword management system
b)prevent keyword mgmt firms from offering less than full AdWords mgmt functionality via co-mingling of SE mgmt interfaces
I have to say that some other PPC API providers (without being specific) have also stated in their T&Cs for some time that API users should not show or allow data manipulation from other PPC engines on the same screen. To a certain extent, this is in the hands of the user as most tools allow either discrete "per-engine" interfaces or combined interfaces.
The same with the use of strategies. It is a user function to select if they want various PPC engines included in strategies or if they want distinct, but similar, strategies per engine.
As many third party bid management tools use tokens from clients who are likely to want to pay for continued usage of the Google interface within their preferred bid management tool and it also appears that large clients may get free API tokens (in some cases) - I don't see that this affects the usage of larger scale bid management tools significantly. Indeed, the fact that it may reduce the wide variety of API users to a core few may bring benefits to all - in terms of the support Google is able to give to large API users.
It was just a matter of time:
..."This may be as simple as Google Legal going somewhere Google Sales & Mktg didn't want them to go (a communication problem), but I tend to think this is a strategic move by Google to
a)prepare the market for their own keyword management system "
Yep - they will probably model it as additional CPC on top of an advertiser's click charges.
I've been looking in other forums, nobody seems to be up in arms about the scarier parts of the new API terms (such as the "must use all available functions" and "not allowed to commingle other advertising venues data.) Everyone's more about the quota... which of course sucks, but the otehr stuff is restrictive too.
It is easier to understand a price increase than it is a change in the way you present information. Trust me though, the folks at the bid management companies are very upset and letting Google know it.
And once bid management USERS have to go through one extra step to adjust bids from Google and then from other search engines, that's when you'll start to hear a more general outcry.
I think I'm going to blog about this over the weekend and perhaps reveal the details of the conversation I had with a few Google folks involved in the API changes. If I remember, I'll post the blog contents here after it is updated!
Thats not fair to cut all free API usages and make everyone pay for it
They could allow some free number of queries
OK, I wrote a pretty extensive blog on this. Here's the relevant parts (this is long):
So I don't think Google charging for its API is the big deal here. The big deal comes with respect to the second point. Read this language from Google's new Adwords API terms and conditions: "The AdWords API Client must not show in the same area of a page, or otherwise visually or functionally associate, any input fields for collecting or transmitting AdWords API Campaign Management Data with the content of Third Parties or input fields for collecting or transmitting data to Third Parties. For example, an AdWords API Client must not (a) use the same input field or button to collect or use data that will be used as both AdWords API Campaign Management Data and also as data or instructions for a campaign on a Third Party advertising network, or (b) use input fields or buttons to collect or use data for AdWords API Campaign Management Data which are visually adjacent to input fields or buttons that are used to collect or use data or instructions for a campaign on a Third Party advertising network."
OK, I recognize that was a lot of legalese, but let me translate it for you. What this basically says is that a bid management company cannot create functionality to enable its users to manage Google and Yahoo Search Marketing campaigns at the same time. Take a look at the Atlas screenshot below:
[SCREENSHOT OF ATLAS BID MANAGEMENT INTERFACE]
As you can see, this tool allows you to make updates to all of your SEM campaigns from one page. Under the new AdWords API rules, Atlas will not be able to show you this page. Now, Atlas will have to have one page for changes to AdWords and another for changes to all other SEM campaigns. So managing your campaigns through a 3rd party bid management tool suddenly becomes much more inefficient.
As you continue reading the AdWords API T's and C's, you're hit with another whammy: "Any information collected from an input field used to collect AdWords API Campaign Management Data may be used only to manage and report on AdWords accounts. Similarly, any information or data used as AdWords API Campaign Management Data must have been collected from an input field used only to collect AdWords API Campaign Management Data. For example, the AdWords API Client may not offer a functionality that copies data from a non-AdWords account into an AdWords account or from an AdWords account to a non-AdWords account."
Again, allow me to translate: information from AdWords cannot be used to benefit non-Google campaigns. For example, wouldn't it be cool to be able to "cross-pollinate" your Google campaigns with your Yahoo keywords and vice-versa? Unfortunately, this provision of the AdWords rules explicitly ban this tool. If you want to transfer Google keywords into your Yahoo account, you can't use Google's API to do this. If you have hundreds of thousands of keywords to transfer, and you can't use your bid management tool to this, you are up the creek without a paddle.
And now for one final legal requirement: "You agree that Google may inspect your AdWords API Client user interfaces up to 3 times per calendar year. Any such inspection must be during normal business hours. You must allow Google to visit your place of business, or inspect your AdWords API Client in some other manner agreed between you and Google, within 7 days after notice from Google that Google desires to inspect your AdWords API Client interfaces. Google's inspection shall consist only of a thorough walk-through with Google of each screen in your AdWords API Clients on which AdWords API Data is displayed or inputted. At the conclusion of such inspection, you shall provide Google with a signed certification that you showed Google all such screens."
Translation: if you have created a third-party bid management tool, and you're using the AdWords API, you are required to let Google "inspect" your entire bid management tool (and come to your office). So let's say that you've developed some really cool proprietary technology. You've spent five years building your system and you charge your clients $100,000 a month to use your software. The last thing you want to do is to invite Google to your offices and show them how your system works.
I'm not saying that Google has created this clause to steal 3rd party companies' technology; clearly, the point of this rule is to police 3rd party tools to make sure that the rules are being followed. But talk about hubris! How would you feel if you bought a computer and the computer manufacturer demanded that they be allowed to visit your home three times a year to make sure you weren't illegally downloading music? Big Google is watching you!
So, at the end of the day, the SEM community should not be upset that Google is charging for the AdWords API. If anything, if you feel that Google is bilking the SEM community, you should be far more concerned with Google's non-transparent bidding model than a nominal charge for API usage.
The real concern here is that Google is basically throwing its weight around at your expense. By restricting 3rd party technology development, Google is trying to maintain it's dominant position in the market by creating barriers to efficiency. I hate to use the "M" words here, but this sounds like something a "Monopoly" or "Microsoft" would do. And that's a much graver concern than charging a few pennies here and there for API usage.