What is ads.txt? How does it work?

Programmatic Buying emerged as a revolution for advertising industry as it automated the buying and selling of ad inventory. It brought efficient way to serve right ad to the right customer. But as they say, each coin has two sides, even programmatic buying has. One side is the revolution that it brought, let’s know the other side.

Some third parties who were involved in this process of real time bidding started to exploit certain vulnerabilities with programmatic buying.

• Fake ad listings were made on ad exchanges which resulted in millions of fake ad spaces being sold to buyers.
• Publishers were spoofed and the buyers did not receive the inventory even after paying for it as they dealt with unauthorized sellers.

So, for combating and keeping a check on authenticity of seller, Interactive Advertising Bureau (IAB) introduced ads.txt which is a simple remedy and hopes to be lucky enough to solve some of the chaos rising.

Now what is ads.txt?

It stands for Authorized Digital Seller, introduced by IAB in May, 2017. It enables publishers to declare a list of companies which they authorize to sell their inventory. Simply put, this is a text file which would prevent illegitimate selling of ad inventory. Ads.txt aims to bring more transparency in the process of RTB and provides buyers a medium to check the authenticity of the seller. It also provides publishers with greater security and lower revenue losses with respect to ad fraud, which in turn can generate higher eCPMs and revenue.

How does ads.txt works?

Publishers creates a text file with all the legal distributors and puts it on the web-server to make it publicly accessible. This ads.txt file enlists the exchanges with seller account ID for each.

Example: https://www.knowonlineadvertising.com/ads.txt

The file "Ads.txt" is provided for each domain similar to the "robots.txt" for download. The file contains the SSPs and AdExchanges used by the publisher for programmatic sales, along with the publisher's identifier for each platform (publisher ID). In addition, information about the marketing relationship (direct or via reseller) and a mandatory day id is added. When the buyers receive the bid through RTB, they can verify the exchange and publisher ID on the publisher's ads.txt file. If it matches, it lets the buyers verify that the inventory bid which he received is from authorized seller. DSPs can crawl to fetch and create a list of all authorized SSPs with their publisher's ID which it can later refer to.

Using ads.txt can be beneficial not only for buyers but also for publishers as it prevents them from being spoofed. So, publishers and exchanges must apply it on their platforms which would certainly enable them gain buyers trust during bids and it would make the process legitimate and transparent.

Format of ads.txt:

The syntax of ads.txt have four parameters, of which three is mandatory and one as optional. Let us explain you taking an example below:

Example: google.com, pub-xxxxxxxxxxxxxxxx, RESELLER, x00x00xxx0000xx0

1. Domain name of the marketing network, which is google.com here (Mandatory)
2. The individual Publisher Account ID, which is pub-xxxxxxxxxxxxxxxx (Mandatory)
3. The account classification DIRECT or RESELLER (Mandatory), we have taken RESELLER in the above example
4. Certified Advertising System Certification Account ID (Optional), 16-character ID - x00x00xxx0000xx0

All the four parameter is separated by comma and all the authorized partner of the publisher has to be notified in the above format in different lines i.e. one line per authorized partner

Does ads.txt provide solution for the transparency issue that programmatic advertising is facing?

The straight forward answer is not completely. The introduction of Ads.txt will definitely help to increase transparency in purchasing, i.e. advertisers will be able to get the inventory they are paying for. But Ads.txt also has limitations for now, such as in-app advertising or blind inventory. But to the current situation it is definitely a big step in the right direction and some further updates will make it the perfect step to make programmatic buying clean.