Social media API allows developers to access and interact with social platforms like Facebook, Twitter, and Instagram. It helps businesses integrate social media into their websites and apps and automate tasks. There are three main types of API: RESTful, Graph, and Streaming. Social media API benefits include streamlining presence, automating tasks, and insights for strategies. Challenges include complexity, changing rules, and data limitations. Examples include Airbnb using API for logins and Nike creating personalized campaigns.