Along with the business strategy comes the measurements you’ll use to determine success. In this post, we’ll consider three common categories of API metrics:
- Raw API Usage: Data on calls and users
- Business Value: An API’s value to your bottom line
- Innovation and Partnership: Value to longer term business goals
Ideally these three areas of measurement work together, though sometimes a company will strategically favor one area of development over another. For example, an API being tracked for innovation value may not be ready for business value tracking.
Raw API Usage Metrics
Usage metrics show your product’s viability. Over time, information on user interaction gives insight on how to market the product. Data provided by usage is tracked in the following ways:
Volume of API calls
Total requests, Requests Per Minute (RPM)—or per second—are common ways to track the volume of calls to an API. RPM can tell you when customers are using the service. API design can change what these metrics really mean, so make sure you’re only making relative comparisons (i.e., the same API over time).
Volume of Users (developers/clients)
Similar to website or SaaS metrics, here you’re looking at the Daily Active Users (DAU) of an API. In fact, you may choose another term like Daily Active Developer or Daily Active Clients to differentiate from other users. Either way, it’s the number of unique users—usually defined by API key/token—on a given day. Monthly Active Users (MAU) is the same approach over a longer period of time, which may smooth out inconsistencies in usage intensity between days.
Much like “hits” during the dot com era, raw API usage can be a bit of a vanity metric, unless you’re able to tie it to more important outcomes.
Business Value Metrics
Connecting an API to business value is a little harder to generalize. There are many models for generating revenue with an API. And an API may be one of multiple tactics that are used for a new product.
Business value obviously comes down to either making more money or cutting costs. Perhaps the best case of business value for internal APIs is increased efficiency:
- More easily share data between departments
- Get new engineering hires trained faster
- Improve functionality in other parts of your business, such as online marketing
One reason for the wide adoption of APIs is because of how much more quickly engineering teams are able to work. Considering the average cost of technical talent, this productivity translates directly into business value.
Partnership and Innovation Metrics
Finally, many organizations find business value in partnership or innovation. These two broad categories both are looking for new opportunities using existing assets.
Because they are multi-purpose in application, APIs introduce and incubate new ideas. Often these innovations come from outside a company, which is indicated by the externally-focused metrics:
- Number of new ideas or products based on integration of the API
- Business development meetings and quality of opportunities
- Count of inbound interest from potential partners
- Percentage of integrations built with targeted partners
Like business metrics, these are highly dependent upon your organization’s structure and goals.
For next steps with your API metrics, explore other topics on API strategy and make sure you have a plan to measure what you build.