Effective July 1, Google will charge, per use, for its AdWords application programming interface (API), which software developers use to design applications for sending and receiving data to and from Google's keyword ad auction, reports MediaPost. The move is likely to affect bid management firms most, because they continually receive and send data to change keyword bids dynamically.

Writing in the official AdWords API Blog, Rohit Dhawan, Google product manager, explained: "We are changing the quota allocation system and pricing model to create a more flexible and level playing field that encourages efficient coding and application design. Effective July 1, 2006, the current free quota system will be replaced by a usage-based system. Under this new model, AdWords API token holders will be charged a nominal $0.25/1000 quota units consumed [per 1,000 times the API is used to call data]. As a result, current developer quota caps will be removed in order to provide a more flexible and scalable system for quota allocation and consumption."

The AdWords API is, for now, still available for free, but usage is limited, depending on the budget for the ad campaign being managed.

Google is also modifying its AdWords API terms and conditions "to simplify developers' abilities to commercialize their applications while at the same time ensuring that advertiser returns are maximized through the promotion of certain functional standards," according to Dhawan. It is making an advanced copy of the terms and conditions available.