The ads.txt initiative is designed to increase transparency and reduce ad fraud. Tyrone Stewart explains all.

Transparency, ad fraud and brand safety have become key issues in the digital ad industry – wherever your interests lie in the supply chain.

“The digital advertising market is vast, fragmented, opaque, and lacks clear standards of conduct and effectiveness,” says Danny Spears, programmatic director at Guardian News & Media. “The supply chain is often complicated and unclear – meaning that proper analysis on return on investment and the funding of a healthy digital ecosystem is obscured. This is damaging for advertisers, content creators, users/customers and ultimately the internet as a whole, as money is diverted away from those who make the content and advertisers lose faith in digital advertising.”

To help resolve these issues, last May the Interactive Advertising Bureau (IAB) launched an initiative called ads.txt, designed to clean up the programmatic advertising supply chain. But what exactly is ads.txt?
The standard is a text file, approved by the IAB, which helps publishers prevent unauthorised sales of their inventory by listing all the companies that they do allow to sell it.

“You could think of the online advertising ecosystem in the same way as any other supply chain. You want to have transparency, so you don’t have a ‘horse meat scandal’ – you don’t want to find out that what was in your dinner wasn’t actually beef like you thought,” says Dee Frew, ad tech manager at IAB UK.

“A degree of transparency actually helps everybody in that supply chain feel a bit more confident about the fact that what the seller is claiming they’re selling is actually what the buyer thinks they’re buying, and that no one in the large chain of intermediaries has tampered with it.

“Ads.txt is a nice additional hygiene factor that publishers can implement. It’s a way of verifying that the people that claim they have the right to sell your inventory actually do have those rights. The publisher can state upfront, ‘These are my trusted partners.’ There’s no obligation to use ads.txt; it just makes life a little bit easier for everybody if they can.”

Widespread implementation
Since its introduction, ads.txt has – slowly but surely – reached widespread implementation. According to a recent report from Pixalate, a global intelligence platform and fraud protection provider, adoption of ads.txt increased 1,924 per cent between September and December 2017. The number of unique sites found to be implementing the standard back in September was as low as 3,523 – despite being launched five months prior. As of December 2017, the number of sites implementing an ads.txt file had increased to 71,288.

“IAB Tech Lab is thrilled to see implementation of ads.text across over 100,000 domains, and to see other encouraging signs of adoption, including validation and analytics tools,” says Dennis Buchheim, general manager of the IAB Tech Lab. “Uptake has been strongest in the US, but other markets are also adopting ads.txt.”

The report also found that, as of December 2017, 55.9 per cent of the top 1,000 sites that support programmatic advertising have introduced ads.txt, while 45.2 per cent of the top 5,000 have implemented the standard.
“Ads.txt, and similar initiatives, needs to be truly embraced by the entire industry for it to work,” says Nick Johnson, SVP of digital ad sales strategy at Turner Broadcasting System. “We are only as strong as our weakest link, and it only takes one or two bad apples to expose the overall marketplace.

The good news is that many publishers have adopted the standard now. And we’ve heard very positive feedback from our agencies and partners. This is working. It is imperative that the industry continues to stay up to
date with ads.txt implementation, as we look to completely stamp out nefarious entities and practices.”

Trust and relationships
But why do we need the initiative? “Despite our amazing advancements in data and technology, the ad business is still predicated on trust and relationships,” says Johnson. “With digital advertising today fraught with brand safety issues, efforts like ads.txt are vital steps to bolstering the trust ad buyers have of the marketplace.

“It’s also important for premium publishers, which have been particularly affected by the misrepresentation (or ‘spoofing’) of inventory, to be able to realise the full value of their content.”

The purpose of the initiative, in its most basic terms, is to ensure a more transparent digital advertising industry and in turn reduce ad fraud. The standard helps to identify fraudsters within the programmatic ecosystem and even goes a way to exposing those larger entities that provide advertisers with low-quality sites and falsified traffic.

“Consider buying a fancy watch from an authorised reseller versus a guy on a street corner,” says John Clyman, VP of engineering for marketplace quality and security at Rubicon Project. “Knowing that you’re buying from an authorised reseller gives you confidence that you’re getting what you’ve paid for, not a cheap imitation. Ads.txt declarations make clear to the world who is authorised to sell the inventory on a given website.

“One of the key benefits of ads.txt is that it puts the power back in the hands of the seller. For publishers, it offers an easy way to broadcast information so that exchanges and buyers can weed out the counterfeits. For exchanges, it helps keep bad actors out of the marketplace so that buyers and sellers can transact with confidence.”

Simple to implement
The ads.txt initiative is actually rather simple to implement and understand, even for those not directly involved in the process. It involves publishers creating a text file that lists all the companies that they allow to sell their inventory. This file is then placed on the publishers’ web servers.

Additionally, programmatic advertising exchanges also create a list to confirm which publishers’ inventory they are authorised to sell.
“We like ads.txt because it puts publishers in the driver’s seat and lets them tell all buyers where they can safely find their inventory without the aid of a third party,” says Katie Buzby, senior manager of product line management at AppNexus.

“While most transactions are safe, having a single, industry-wide source of truth makes it a lot harder for bad actors to fool advertisers with fake impressions and cheat publishers out of money that should be theirs.

“Ads.txt is a file that the publisher places transparently on its domain. Within the file, each approved partner is listed with its tech platform (AppNexus, Google, Rubicon, etc.), account detail and the relationship. DSPs and SSPs will regularly crawl these files to discover the approved inventory sources.”

With both publishers and programmatic platforms placing lists on their servers, buyers are able to compare the two lists and confirm the validity of any inventory they purchase.

“Transparency allows all parties to understand what’s happening in the supply chain, and gives buyers and sellers better visibility to manage programmatic activity more effectively,” says Jess Barrett, global head of programmatic at the Financial Times (FT). “The widespread implementation of ads.txt should help eliminate unauthorised resellers and fake websites posing as legitimate publishers. As a result, buyers will spend more on working media and sellers will get the revenue that is rightfully theirs.”

New scams
Despite many within the industry both implementing and singing the praises of ads.txt, it still isn’t a complete solution to the issues the industry faces with transparency and ad fraud.

“Ironically, ads.txt has launched new fraud/scams, whereby unauthorised third-party sellers attempt to get added to publishers’ ads.txt files,” says the FT’s Barrett. “This is a good opportunity for publishers to re-evaluate the partners they work with. The success of ads.txt will depend on whether or not the majority of the industry adopts it.”

Guardian News & Media’s Spears points out that fraudsters will still find a way to cheat the system. “We should recognise that ads.txt is an intelligent technical answer for fraud in its current form, but also that those intent on gaming the system for their own benefit will continue to create ways to do so,” he says. “This solution doesn’t address issues such as whether there are better regulation and transparency measures that could have positive implications for the digital ad market as a whole.”

To help address the issues that ads.txt does not take care of, the IAB Tech Lab recommends looking towards also implementing upcoming technology such as OpenRTB 3.0 and ads.cert.

“The industry should be aware that there is no silver bullet with which to solve fraud,” says the IAB Tech Lab’s Buchheim. “In addition to implementing ads.txt, companies should be looking at upcoming technology such as OpenRTB 3.0 and ads.cert to sign bid requests and provide authentication in the supply chain. The Trustworthy Accountability Group’s anti-fraud certification and use of anti-fraud vendors may also be part of a company’s strategy against fraud, as could other emerging offerings.”

In-app authorisation
As Buchheim mentions, ads.txt is not a complete solution to solving ad fraud, and one place the solution has yet to arrive is mobile in-app. This is because it simply isn’t as easy to create a solution for the app ecosystem.
“In-app is tricky because of the multiple different SDKs (software development kits) out there,” says IAB UK’s Frew. “It’s not going to be called ads.txt. It’s going to have to be something that is unique and tailored to the app environment, but it will hopefully perform the same function.”

However, Gil Klein, managing director at Mobfox, believes an in-app solution is unlikely to be too far away. “While there is no solution like ads.txt for apps just yet, like most new technologies in the ad tech industry, it will eventually transition from web to mobile,” he says.

“The way I expect ads.txt will be implemented in-app is for app developers to place the ads.txt file inside the app store (whether iOS or Android) in a dedicated section. This will help clean up the ecosystem, allowing demand partners to scan the app store for the ads.txt file to ensure buyers are truly receiving what they’ve purchased.”

Which, at the end of the day, is what ads.txt is all about.