What You Need to Know About Ads.txt Today

In May 2017, the Interactive Advertising Bureau (IAB) Technology Laboratory introduced a text file into the programmatic advertising ecosystem with the goal to prevent unauthorized inventory sales through fraudulent practices such as domain spoofing and bot networks.

Historically, there has been a lack of transparency between the buyers, vendors and sellers of programmatic inventory. For context, this relationship has often been compared to a consumer inadvertently buying a fake Rolex watch. The consumer thinks that the watch is authentic and was simply a great deal. The first day the consumer wears it, the watch falls apart and he blames the brand on the bad experience, vowing never to buy a Rolex watch again. In this scenario, everyone loses except for the counterfeiter. The consumer didn’t get what he paid for, leaving a bad taste in his mouth with regard to that brand, and the brand didn’t get compensated for the sale and came out of the transaction with a damaged reputation.

What is “Ads.txt”?

Authorized Digital Sellers (ads.txt) is an IAB project designed to improve transparency in the advertising ecosystem. It is a simple, flexible and secure method allowing publishers and distributors to publicly declare the companies they authorize to sell their digital inventory. Ads.txt is being implemented more and more, allowing brands to have greater confidence in the authenticity of impressions they are buying, providing publishers and distributors more control over their inventory in the market, and removing the financial incentive from selling counterfeited and misrepresented media.

How does it work?

Fortunately, ads.txt is simple to use and easy to update. Publishers and distributors’ webmasters drop a text file on their web servers that lists all of the exchanges, ad networks, sales houses or sales representative firms, and/or content syndicators that are authorized to sell their inventory helping them regain control over their media, brand and rate card. Similarly, the exchanges, ad networks, sales houses or sales representative firms, and/or content syndicators integrate ads.txt files to confirm which vendors’ inventory they are authorized to sell. This type of file makes it easy for advertisers to verify that the exchange and the vendors it represents have a legitimate connection to each other and that the inventory being sold is authentic. Advertisers simply have to check their tags for the presence of an ads.txt file by going to the website’s address followed by /ads.txt to see if the exchange they are buying through is listed as an authorized seller of that website’s inventory.

huffington post
Example: HuffingtonPost.com/ads.txt

Pros and Cons

The success of the ads.txt program will depend on several things. First, it will need to be adopted en masse by publishers. So far, so good. Uptake increased significantly at the beginning of 2018. More than 90,000 sites now use ads.txt, up from 3,500 in September, according to Pixalate. Among the top 1,000 sites that sell programmatic ads, 57 percent now have ads.txt files, compared to 16 percent in September, per Pixalate. In addition, roughly 60 percent of the top 1,000 publishers in the U.S. have uploaded ads.txt files to their sites, according to OpenX.

Conversely, advertisers must purchase only through exchanges, ad networks, sales houses or sales representative firms, and/or content syndicatorsthat have been whitelisted by their publisher or distributor partners.

Additionally, exchanges, ad networks, sales houses or sales representative firms, and/or content syndicators as well as publishers and distributorswill need to work on preventing data entry errors in the whitelisting process as it requires a large volume of information. One mistake could cost them a great deal of ad revenue and, currently, FirstImpression.io reports that 16 percent of publishers’ ads.txt files have errors.

Finally, transparency has always been an issue since many publishers don’t want to divulge their entire partner list (exchanges, networks, etc.). With ads.txt being implemented, publishers will either need to disclose all of their partners or run the risk of losing money to advertising fraud by keeping their vendor list secret.

Conclusion

Ads.txt is an exciting tool that will help advertisers trying to maximize their working media dollars with authentic inventory and is clearly here to stay with industry groups like Trustworthy Accountability Group (TAG) making ads.txt a part of their accreditation process.

While it is likely to drive up CPMs due to an increase in demand, ultimately, advertisers will see ads that perform better, and publishers will be able to maximize their inventory by blocking unwanted advertisers from running on their sites while improving both ad quality and user experience at the same time.

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