What Is Ads.txt and Can It Prevent Fraud in Programmatic Advertising?

Ad spend continues to increase annually, with projections estimating that it will reach more than $585 billion in 2023, according to eMarketer. Publishers and advertisers stand to earn greater revenues as a result. But fraudsters and bad actors are just as excited by this growth as legitimate business, and the rate of malicious activity that comes with it continues to grow. Some plots may carry costs of up to a million dollars, translating to enormous losses for companies.

Fortunately, there is an effective way of fighting fraud and making advertising inventory purchases more secure and legitimate – the ads.txt project, created by the IAB. 

What Is Ads.txt and What Problems Can It Solve?

Ads.txt was released by the International Advertising Bureau (IAB) Tech Lab in 2017 with the aim of preventing different types of fraudulent actions, such as domain spoofing and inventory arbitrage. It helps make the supply chain of online advertising clearer and more transparent as well as making things more complicated for fraudsters looking to sell inventory stolen from media buyers and publishers. In December 2020 IAB Tech Lab released ads.txt for connected TV because the complex CTV market required more transparency in cooperation between media buyers and publishers. 

What actually is ads.txt? Ads.txt stands for Authorized Digital Sellers. This is a file containing a list of trustworthy programmatic partners, such as ad networks, ad exchanges, and supply-side platforms. The project helps tackle fraud cases in programmatic advertising, particularly:

• arbitrage: a process where impressions are purchased and then resold at a higher price (ads.txt can be used to discover the authorized resellers of the inventory)

• domain spoofing: the substitution of a genuine URL with a fraudulent one, either by using specific malware or making changes in the ad tag. 

Using the methods mentioned above, fraudsters can steal revenue publishers would otherwise get, making ad spend a waste of money for advertisers. Roughly speaking, these bad actors steal inventory and money from legitimate companies. For many years, it was hard to verify that correct ads appeared on the site they were intended for. Without the ads.txt file, buyers had to contact every publisher directly in order to find out whether this or that SSP is authorized to resell the inventory of a supplier they’re working with. However, the ads.txt manager makes it easy to check which programmatic companies legitimately sell media, and avoid undesirable cooperation with fraudsters.

The first release of ads.txt failed to address mobile ad fraud because app stores hadn’t supported it. As a result, the IAB updated their guidelines in 2018. Over the course of the following months, adtech providers and app stores had to share their feedback to help adjust the ads.txt format to apps. There was an issue with storing the ads.txt file, because apps do not store the file the same way as web browsers do. To resolve that issue, the app-ads.txt extension was released, satisfying the necessary requirements for apps distributed within mobile and CTV app stores.

How Does Ads.txt Work?

Publishers simply add the ads.txt file with the list of authorized inventory sellers to their web server in the root domain, and programmatic platforms do the same in order to guarantee buyers pay for valid ad space. This file contains the following fields:

• The domain name of the advertising system

• Publisher’s Account ID

• Type of account: DIRECT (if a publisher sells inventory directly)/RESELLER (if another company is authorized to sell the inventory)

• Certification Authority ID (an optional field which shows if the vendor is authorized, for example, by TAG – Trustworthy Accountability Group)

In order to check whether a website has an ads.txt, you need to add “/ads.txt” to the root domain (for example, companyname.com/ads.txt). There is also a crawler by IAB that helps quickly check if publishers use an ads.txt validator. 

Tips for Effective Ads.txt Use

Though ads.txt is aimed at resolving problems with advertising scammers, it’s not enough just to integrate the file. There are certain details you should take into account to get the most out of the ads.txt technique, and ensure that it’s protecting your ad inventory to the fullest.

Avoid too many resellers

It’s better to focus on direct sellers because reselling is an opportunity for fraudsters to benefit. Unfortunately, not all reselling vendors enforce strict requirements on the members of their network. There may also be concerns about the quality of the inventory. 

Don’t make it too long

Huge files might not be fully processed by the demand-side platforms, and sometimes they may even be ignored so that ads are banned from that domain. Sometimes, new ad revenue partners may ask you to include several new entries in your ads.txt file. In this case, you can request a straightforward and persuasive explanation from a partner to decide whether it is worth doing or not.

Avoiding errors

Reviewing the ads.txt file for syntax errors is another must. If there are typos, demand partners won’t be able to scan your file properly. Again, your inventory might be ignored, which will lead to a decrease in revenue. Make sure the names in the list are written correctly.

Leverage other techniques

Ads.txt was created to help avoid fraudulent activity, but it can’t guarantee a 100% fraud-free experience. Thus, it’s better to use other tools as well, such as Sellers.json. Sellers.json is an extension to ads.txt and is hosted by sell-side platforms and ad exchanges. It contains the list of publishers they cooperate with, including names, domains, and type of sale (direct or not). 

Apart from that, IAB offers publishers the ability to partner with ad fraud detection providers that can use tools that allow them to check whether ads were displayed on the right website or within the right app. As for TheViewPoint, it supports ads.txt and app-ads.txt to make the digital advertising ecosystem safer and more transparent in terms of CTV/OTT content distribution. That’s how we protect video ad inventory from malicious activity that could damage the buyer’s brand and lower publisher revenue. 

Takeaways

Using ads.txt and app-ads.txt together with other available anti-fraud tools for verifying the validity of programmatic deals is a must for all media owners. Anti-fraud is becoming especially relevant, considering the continued pace of development of the CTV/OTT industry and the corresponding ad spend.

Major scams could have had a much smaller impact or been completely prevented if media companies would implement the best practices of ads.txt and, as a result, only purchase inventory from trustworthy advertisers listed in the file. This practice will help to stop most fraudsters from using legitimate vendors’ names and media. And for media owners, ads.txt is a powerful tool for controlling their inventory sales, while providing oversight on those resellers who are authorized to make deals on their behalf.