The digital advertising sector is experiencing rapid growth, with eMarketer predicting that global spending on digital advertising will reach $586 billion by 2023, representing 65.9% of total media ad spending.
However, this growth is accompanied by a significant challenge: ad fraud. Advertisers and publishers have been actively discussing this issue for the past decade.
One of the most notorious cases of ad fraud was Methbot, which was responsible for stealing $3 to $5 million each day from advertisers in early 2016. Resolving this problem is the responsibility of publishers, who must end spoofers once and for all.
“Methbot, the most profitable ad fraud operation to date, has spoofed 250,267 distinct URLs to falsely represent inventory.”
The Interactive Advertising Bureau (IAB) Tech Lab introduced ads.txt to curb ad fraud in May 2017. However, the adoption of ads.txt picked up when Liane Nadeau, VP and Director of Programmatic at DigitasLBi, wrote an open letter to all the publishers giving an ultimatum that if the publishers did not start using ads.txt, they might lose some advertisers.
With no further ado, let’s understand ads.txt in detail.
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What Is Ads.txt?
Ads.txt is a publicly available text file where a publisher lists partners authorized to sell and resell its ad inventories on a website. This allows the advertisers to check the validity of the ad inventories they purchase. Liane Nadeau explained ad fraud and ads.txt in the open letter with a metaphor.
“It’s a tricky concept. Let’s try a metaphor. It’s a lot like counterfeit bags. You don’t want anyone selling fake versions of your premium bag on Canal Street, as it cheapens your brand and you lose a potential sale. We as buyers don’t want to be duped into buying a fake bag because it’s of poorer quality. So, if you publish a list of retailers that are authorized to sell your bag, we can check it out to make sure we buy one that’s legit. Everybody wins.”
– Liane Nadeau, VP and Director of Programmatic, DigitasLBi (Src).
It is designed to eliminate domain spoofing, where fraudsters convince an advertiser to run ads on their websites by presenting themselves as the owner of a premium website. But the ad gets served on a low-quality website with fake traffic. Thanks to the ads.txt file, publishers can now prove themselves legitimate partners.
How Does Ads.txt Work?
When a publisher uploads the ads.txt file to the domain, advertisers use Ads.txt crawler, a script, to crawl the list of domains and see which publishers have an ads.txt file. Once they have the domains with ads.txt, they can reference this list to match Seller Account IDs in the bid requests.
When the Seller Account ID in a bid request does not match the information in the ads.txt file, it indicates that the inventory does not originate from an authorized domain. Consequently, advertisers will stop bidding on that particular domain’s inventory to prevent any potential fraudulent activity.
How to Create Ads.txt?
The IAB recommends a syntax to list the partners, and you have to create your ads.txt file by putting every partner into the syntax. In the end, you’ll get a list of partners represented in a prescribed way. Here’s how to create an ads.txt file.
Note: Anyone can see the ads.txt file. You can check by typing the root domain name and “/ads.txt”.
How to Implement Ads.txt?
To authorize the sale of your ad inventories, you only need to upload a text file to your web servers containing a list of your trusted ad-tech partners, such as SSPs and Ad Exchanges.
Likewise, adtech platforms should also support ads.txt files to verify which publishers’ inventories they are permitted to sell. This provides buyers with a means to verify the legitimacy of the inventory they purchase, ensuring maximum transparency and reducing the risk of fraudulent activity.
Is Ads.txt Mandatory?
Although not obligatory, Google strongly suggests the implementation of Ads.txt as a powerful tool for safeguarding your brand from fraudulent activities. Ads.txt can prevent your inventory from being intentionally mislabeled as originating from a specific domain, app, or video.
Authorizing yourself as a legitimate seller can also help you receive advertisers’ spend without the risk of it being wasted on fake inventory.
Benefits of Ads.txt
If you are selling ad inventory on your site, ads.txt is a great way to inform buyers who is authorized to sell ad inventory on your site. Here are some of the benefits of using it for publishers:
- Enhanced Transparency: It improves transparency in the ad supply chain, allowing publishers and advertisers to quickly and easily identify authorized sellers of ad inventory. This increased transparency also gives advertisers greater control and understanding of the ad-buying process, enabling them to see exactly where the inventory is coming from.
- Reduced Ad Fraud: Ads.txt helps prevent ad fraud by making it harder for malicious actors to sell fake ad inventory. Publishers can specify which resellers are authorized to sell their inventory, and buyers can verify that the sellers are legitimate. This reduces the risk of domain spoofing and clicks fraud.
- Increased Revenue: Publishers who implement ads.txt can enhance the trust of their ad buyers, potentially resulting in greater revenue. Advertisers are more inclined to purchase inventory from publishers implementing ads.txt because it guarantees that their ads are displayed to genuine users on authenticated websites.
Difference Between Ads.txt and Ads.cert
Ads.txt is a good thing, and in theory, the way that ad exchanges and SSPs sell ad inventory should be working. Yet it hasn’t been a completely effective solution for the industry. Fraudsters and shady third parties could still trick the advertisers by manipulating the ads and content on the publisher’s websites. For instance, a fraudster can copy the seller’s ID from a legit publishing website and use the same ID on a spoofed website.
This is where ads.cert comes in. So, what is it, and how is it different from ads.txt? Ads.cert is an upgraded version of ads.txt that allows advertisers and ad tech companies to verify supply paths at each stage and ensure the inventory details aren’t manipulated/modified.
It signs the bid requests cryptographically and validates the data such as publisher’s domain, user’s device, IP address, ad impression type, and more. Since the bid requests are cryptographically signed, advertisers use a ‘public key’ to confirm whether the ad inventory is legit. Learn more about how ads.cert works here.
Ads.txt aims to help publishers combat fraud by regulating how publishers and resellers advertise and sell their inventory. It’s become clear in recent months that the initiative has gained traction across the industry.
However, there is no ‘set-it-and-forget-it’ solution in the programmatic ecosystem. Publishers must update the ads.txt file whenever a new seller can sell their inventory. In addition, publishers have to remove outdated resellers or sellers to prevent any loss of revenue.
How to Validate Ads.txt?
To validate Ads.txt, you can use the Ads.txt Management feature provided by Google Ad Manager. This tool allows you to enter the URL of your ads.txt file, and it will check for common errors and issues.
What’s the Difference Between Ads.txt and Ads.cert?
Ads.txt identifies authorized sellers of ad inventory, while Ads.cert verifies the authenticity of ad requests. Ads.txt prevents unauthorized sellers, while Ads.cert prevents domain spoofing. Both combat ad fraud and increase transparency.