Google's New API ToS - Dodgy or What?


I spent quite a few hours this weekend reviewing the new Google AdWords API terms of service. All I can say is "wow". As pointed out on the Google AdWords API Developers forum, Google either Google wants to prohibit virtually EVERYONE from using the API (and if so, then why bother developing and releasing it in the first place?) or they have the world's worst lawyers.

When you read the agreement, the gist of it is basically this:

AdWords advertisers can't use any applications that use the API that have been developed for them by third parties. Advertisers can only use those that are developed for them in house or "custom" built for them. If your app can be sold to more than one customer or is hosted and made available for more than one customer, apparently that is against the TOS.

(See Section II, paragraph 2 - "2) Non-Compliant AdWords API Clients. You shall not use an AdWords API Client that violates this AdWords API Agreement. For example, you may not use your Developer Token with an AdWords API Client developed or hosted by a Third Party (excluding an Internal-Use Only AdWords API Client developed for you)."

That's it. End of story.

Another important part of the backstory on this is that Google has a "My Client Center" Account structure. The MCC is like a master account and the API calls are made through the MCC account, via the MCC Developer token for each account. The cited language above now prohibits this. The problem with putting all customers in the software provider's MCC account is that it then limits the client to using only that provider's software. Currently many advertisers use different software for different functions and this will be impossible under the new terms and conditions.

I found this hard to believe so I called Google and asked if, for instance, AtlasOnePoint would no longer be available to advertisers, and was told no, absolutely not, and that there was no special deal for them or anyone else. The intent of Google is not to prohibit these types of services. The rep I spoke with said someone from the API team would get back to me (but no one has as of yet).

Other issues for a later post include the fact that Google is going to require extensive Google branding on any app that uses the API, security measures for the data extracted, prohibitions against sharing the data and a paragraph previewing service charges for access to the API. This is especially hard to believe since presumably, any service that uses the API, in order to be commercially viable, would have to help advertisers be better/more efficient at what they do, which would presumably result in more revenue to Google, so why would Google charge for that and by doing so, discourage use of the API. Surely, Google, with all the billions of dollars in the bank, can't be worried about the expense of supporting an API, can they?

We'll see.


Coming Soon

IMO, this is leading up to an official annoucement of the rumored commercial API. With a commercial API in place, G will be able to make reoccurring revenue through licensing agreements with all the 3rd party developers.


Yeah, I read through those and thought them to be quite shite. No only are the TOS ignorant beyond belief, but they are also lowering the quality of the data that they do give out by removing all sorts of stats and features.

Seems shifty how greedy they are with that data.

Having just spent a few grand developing some tools I think Google sucks for rendering them useless.

commercial API...

That sorta runs counter to that whole lets make the most efficient market crap they were selling with the Google Analytics offering.

commercial API

>reoccurring revenue through licensing agreements with all the 3rd party developers

the last paragraph and the (semi-)retraction that follows is interesting. licensing is definitely in the wind, imo NYT: A Journey to a Thousand Maps Begins With an Open Code

charging for the API makes no business sense

If an API encourages more people to advertise or spend more on advertising, and advertising is 99% of your revenues, why mess around with the relative pennies you will make charging 3rd party developers? The only reason to have any charge for the API would be some nominal fee to weed out those who are "not serious" and in the web 2.0 world even that doesn't make sense because you never know when something is going to turn into the next big thing. As long as the 3rd party apps benefit your underlying service, do everything you can to encourage them. Those that don't you explicitly ban, rather than penalizing every app through fees.


A business run by a bunch of engineers. What do you expect? I'm thinking Microsoft and Yahoo will be more than happy to work with developers.

small business dumping AdWords

Most of my clients are small business. For most, the biggest ad expenditures are yellow page and local paper. For the past two years, most have moved into AdWords and until recently, it was worthwhile.

A few months ago I started advising clients that if they are not doing bid management, AdWords is probably not cost effective for them. Of course it is not that simple, but for most the bottom line is that simple.

I just got back the numbers from the first 45 days sans-AdWords. Business is up, the managers noticed no difference in customer traffic or shopping patterns, and in all 3 cases they were surprised when reminded that they just saved between 600 and $1500 bucks in ad spend for that period.

Of course I am not generalizing this: I already generalized my core belief that AdWords for most of these customers is not worthwile without bid management in place. Now the hard part - given the expectation of extra ad money in their pockets with business increasing, two of the three have expressed interest in BIGGER YELLOW PAGE ADS (doh!)

(for these businesses, YP ads are the *least productive* for the dollar and they have already seen those numbers... it was part of the pitch for moving online)

Bottom line: even when guided, many SMBs don't think, and they follow the trends to spend their money when they feel there will be a return. It might be in Google's best interest to make it as hard as possible to access meaningful stats for those who are not sophisticated enough to track bids and campaigns closely. Better to just keep taking their money.

[Note that each of these three business has a significant % of foot traffic referred from online websites that are organically optimized and rank very very well for core terms. All three bid on those core terms (about 50% of spend for 10% of traffic) plus long tail terms (50% of spend for 90% of traffic). Customers cite the Internet frequently.]

Interesting... and frightening

Google are very, very good at saying absolutely nothing and then they just drop these bomb-shells on us don't they? It's like most of the web services they release - there's no promotion, then the new service simply goes live. Whammo! It's a disruption to all their competitors' business models. And that's an extra reason why they're so far ahead of everyone else.

There must be some kind of bigger plan afoot. My guess is they'll release a much more powerful commercial API for bigger users. Licensing fees? Possibly. It could also still be free - their track record on free services would support that theory.

IMO, they're going to have to tread real carefully to not abuse their power or else some kind of Government regulatory body is going to come straight after them. They are simply so big and powerful that they're now a prime target for that type of stuff.

If they don't allow third-parties to use an API, then many external companies (including myself) have just gone and wasted tens (or hundreds) of thousands of dollars in pointless development costs. They're a smart organisation so I can't see that they'd be so silly to permanently prevent all 3rd party APIs. I think they're just trying to limit amateur users.

Time will tell.

In the electrical utility

In the electrical utility trades the linemen have a saying "if you can't see both ends of the wire then treat it like it will electricute you." If you're using anyone else's API to develop your pages then you're blind & holding on to one bare end.

Adwords Dominator

I pity that heavily advertised desktop adword api software which is officially releasing tomorrow :)

so true

If you're using anyone else's API to develop your pages then you're blind & holding on to one bare end.

So true... I didn't want to be the one to say it.

Things move so fast these days it is hardly worth trying cause you know the plug can and will be pulled.... especialy if it is obvious you are making money off of it.

Opportunity for YM

Yahoo and Microsoft could do well out of this

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.