5 Things to Know About Ads.txt

If you’re familiar with the ad tech space, then there is a good chance you have heard about the latest sensation — ads.txt. It stands for “Authorized Digital Sellers,” and its goal is to protect buyers from inventory fraud and create more transparency in programmatic advertising. While the initial adoption was slow, ads.txt has become the industry’s hottest trend as it shifts from the exception to the rule.

At a recent PluggedIn roundtable, a variety of professionals were assembled— from publishers to advertisers and beyond — to discuss the impact of ads.txt to date and how it will affect the industry moving forward. Here are five things you need to know about this game-changing tool.

1. Adoption has increased significantly

At its inception in 2017, ads.txt was slow to catch on. eMarketer reported that in September 2017, only 8.5% of the Internet’s 5,000 most popular sites had adopted the file. As our panelists pointed out, there were many reasons for this — one of the main ones being that with so many other projects, most tech teams were not about to prioritize an initiative when they had little understanding of its benefits.

As with most things, the more people learned about ads.txt and its benefits, the more willing they were to implement it on their site. However, knowledge wasn’t the only thing that contributed to its growth in popularity. Buyers started issuing publisher ultimatums to adopt or be blocked, and Google also came out in support of the initiative. Today, over 50% of those 5,000 sites are using ads.txt, according to eMarketer.

2. The results aren’t quite as expected

The implementation of ads.txt came with an immediate need to see and understand its benefits. This, for many of our panelists, hasn’t been easy. We found varying expectations from increased CPMs to further understanding of how the file is faring against fraud on individual sites. With CPMs specifically, the theory Jisha Jacob of AppNexus brought forward is that because legitimate demand would no longer be going to invalid content, the results should improve. While she has not seen this hold true yet, she is hopeful as widespread ads.txt adoption continues. In an industry so focused on measurement, all agree that being able to see some sort of benefit is important.

3. There is room for error

One of the biggest causes for concern with ads.txt is the margin for error. While the process of adding the file to a site is a relatively small lift for developers, the maintenance is quite manual. Any misspelling or mislabeling of vendors can be extremely detrimental. It was compared to “running a business on Excel” with ads.txt being even harder to control. Dedicating someone to owning and updating the file, as well as using AppNexus’ validation tool are probably the best bets for making sure it runs smoothly.

4. It forces publishers to evaluate partnerships

Ads.txt has brought transparency to the foreground. As Rick Welch of Flipboard shared, he believes partner hygiene is one of the best cases for ads.txt so far. Because it requires publishers to list approved vendors within the file, many third-party resellers are now losing out. Several of our own panelists admitted dropping partners because they didn’t want them to publicly appear on their list — inevitably leading to a healthy evaluation of who they have worked with in the past and who they want to work with in the future.

5. It brings a bigger conversation to light

Towards the end of our discussion, panelists were asked whether they believed ads.txt had staying power and whether it would be the topic of conversation in a year. While the answers were mixed, most agreed that, if anything, it is the start of a conversation that needs to happen. It’s helping to align interests and give buyers, publishers, and advertisers the opportunity to get on the same page. The hope is that this simplistic solution will ultimately lead to a more advanced solution.

As we continue to evaluate the benefits and challenges, one thing everyone does agree on is the fact that ads.txt is a great first step in cleaning up the programmatic ad market and banishing fraud for good.

Roundtable Participants

Bloomberg: Alyssa Chu, Head of Global Programmatic Platforms

Flipboard: Rick Welch, Head of Programmatic Advertising

A&E Networks: Tyler DeNicola, Programmatic Manager

Chegg Inc: Samuel Youn, Director of Programmatic Revenue Strategy

Adtelligent: Diego Sanchez, CEO

AppNexus: Jisha Jacob, Product Manager

Purch: Michael Hannon, VP of Business Development

If interested in learning more about roundtables and how PluggedIn can produce one for you, be in touch.