Adwords API is an ad API program which allows developpers to create and use specific applications which interact directly with Adwords servers without passing through the traditional Adwords interface.
Adwords API is used by large advertisers, agencies and PPC tools for managing large Adwords accounts and campaigns. It’s generally used for creating :
automatic campaigns integrated with product inventories
specific bidding and campaign rules
AdWords API is also used by software tools which allow users to centralize campaigns which are distributed on several PPC search engines.
According to Google a fee is charged for AdWords API usage "to ensure that all developers create applications that interact with the AdWords platform in an efficient and responsible manner".
Each API call to the AdWords servers costs a number of API units and free API units can be offered under certain conditions. In November 2012, 1000 API units were charged at a rate of US$0.25.
An extract of the API call rate sheet:
A serie of events related to a major change in AdWords API: