The ads.txt project broadens advertising opportunities for legitimate publishers that want to profit from digital inventory. We take a closer look at this industry standard for transparency.
Digital advertising is big business. In 2020 the industry generated an estimated $378bn in revenue, and it’s predicted to make up 61% of global ad spend by the end of 2023 – nearly three times that of TV advertising. However, while this form of advertising is hugely beneficial for both brands and publishers, it also has its risks.
When you combine the anonymous nature of the digital world with the highly complex processes behind selling ad inventory and the almost complete automation of programmatic ad buying, the resulting environment is the perfect place for fraudsters to flourish.
Digital ad fraud is projected to cost an enormous $44bn in 2022, so the industry is constantly looking for ways to stop it. One such form of protection for both advertisers and publishers is the ads.txt project. Created by the IAB Tech Lab, ads.txt is designed to provide greater transparency in the digital advertising marketplace.
With SmartFrame’s contextual in-image advertising system about to go live, we’ve been contacting publishers to ensure they’re set up and ready to earn money from their embedded images. A big part of that has been to ensure that ads.txt is properly in place – and here, we explain this protection measure and help demystify the technology.
What is ads.txt?
Ads.txt sounds quite technical, but it’s actually a very simple concept. It’s a plain text file that a website owner adds to their root domain and it contains a list of everyone who’s authorized to sell its digital ad space.
The clue is in the name, which, while a little clumsy, makes complete sense: the ‘ads’ part stands for ‘authorized digital sellers’ and the ‘.txt’ part refers to the text file format it uses.
The list contains the domain of the advertising platform, the publisher’s account ID, the account type (which specifies whether they are selling the inventory directly or as a reseller), and an optional ID issued by the Trustworthy Accountability Group (TAG).
Once uploaded, anyone can view it by simply adding ‘/ads.txt’ to the end of a website’s URL. Here are some examples: The New York Times, Sky and the BBC.
When advertisers are looking to buy digital ad space, they can check the target website’s ads.txt file and be sure the seller they’re dealing with has a legitimate connection with the publisher of the site on which they wish to advertise.
You can read the full ads.txt specification to learn more and understand the specifics.
Why use ads.txt?
Ads.txt was introduced to bring some much-needed transparency to the historically opaque digital advertising supply chain.
Before ads.txt, an advertiser had no way of being completely certain that the ads they were placing were going to appear where they should.
With the ability to cross-check against a clear list that only the domain owner themselves can edit, advertisers can make better-informed decisions on the inventory they purchase, helping to deter unauthorized resellers and in turn reduce ad fraud.
What is unauthorized reselling?
Unauthorized reselling in the context of digital advertising is any selling of ad space without permission from the owner of that inventory. Not only does it encourage ad arbitrage, but it also leaves advertisers exposed to many kinds of ad fraud, including the issue of domain spoofing.
What is domain spoofing?
Domain spoofing in digital advertising can take a number of different forms, but the term generally describes the act of tricking an advertiser into buying inventory for one website, but the advertising in question ending up somewhere else entirely.
The risks are numerous for advertisers. These include the ad being served to the wrong audience or being subject to false impressions altogether, or, worse still, appearing next to inappropriate or offensive content, which could be devastating for a brand’s reputation.
It’s also bad news for publishers as they lose out on large amounts of revenue that would have been originally intended for them. A 2017 study by The Financial Times, for example, estimated that advertisers were spending $1.3m a month on spoofed FT.com inventory.
Do I need ads.txt?
In a word, no. But while ads.txt is not compulsory, you’ll be drastically reducing your options if you opt out.
Since its launch, ads.txt has been installed by the majority of top domains and many of the major ad exchanges won’t deal with publishers that don’t have it. So, in order to maximize your chances of selling ad inventory, it’s a good idea to adopt the principle.
For example, if you’re a publisher that embeds a SmartFrame on your website and you would like to profit from that embed, you’ll need to add an ads.txt file to your domain to authorize our adtech partners to sell the space on your behalf. Without this authorization, not only will you lose out on revenue, but if you’re not the image owner, you may also be unable to embed that image for free.
You can find out more about how to add the SmartFrame Publisher ID to an existing ads.txt file (or create and upload a new ads.txt file from scratch) in our Help Center.
What is the problem with ads.txt?
Ads.txt is very good at doing what it’s designed to do, which is to protect against the specific problem of unauthorized reselling.
However, the standard has faced a huge challenge: widespread misinterpretation of what it does and how it should be utilized. This has led to misuse, and has ultimately played into the hands of bad actors. So why is this?
Widespread adoption of the standard was always key to success, but as more of the industry signed up, it quickly became clear that many users wrongly thought ads.txt automatically provided complete protection against ad fraud.
Not only were advertisers basing their spending decisions purely on the fact that the publisher had an ads.txt file installed – without ever checking the contents of that file – but they were also viewing it as a badge of legitimacy.
This created a situation where fraudsters would simply add an ads.txt file to their domain to garner misplaced trust and continue with their activities unchecked.
The misinterpretation continues to this day, with a recent blog from IAB Tech Lab defending the standard against new criticism.
Is ads.txt really worth it?
Many in the industry are skeptical about how far ads.txt has actually gone to combat ad fraud.
While it is likely to have contributed to a reduction in domain spoofing, fraudsters have instead focused their efforts in different areas. The result of this is that overall global digital ad fraud is still increasing exponentially, from $19bn in 2018 to an estimated $44bn in 2022.
Nevertheless, it’s important to remember that ads.txt is designed to provide transparency in the digital advertising supply chain and act as a tool for preventing a specific type of ad fraud, rather than provide a silver-bullet solution to the problem as a whole. It has created the means for advertisers to make their own decisions on the sellers they deal with and the inventory they buy, and it does this very well when used properly.
The fact that it makes unauthorized reselling more difficult can only be a positive. While ad fraud is still rife in other areas, a digital ad industry with less unauthorized reselling is undoubtedly a better place to be.
The key takeaway here is that, if you’re a legitimate publisher, by uploading an ads.txt file to your site, you have nothing to lose and everything to gain. Not only does it make your inventory available to all the biggest players, but it also helps to ensure their dollars line your pockets, rather than the pockets of a fraudster.
Learn more about SmartFrame’s in-image advertising offering here and discover how you can profit from embedding images on your website.
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