WHAT IS ADS.TXT AND HOW DOES IT HELP PUBLISHERS MONETIZE MORE EFFICIENTLY?
5 November 2021
There’s been a lot of talk around ads.txt in the ad tech and programmatic advertising ecosystems. In 2017 the Internet Advertising Bureau (IAB) launched the ads.txt initiative with the goal of reducing ad fraud and increasing transparency in the programmatic advertising environment.
That was updated in 2021 with the much-anticipated improvement ads.txt, Version 1.1.
We’re breaking ads.txt down and exploring exactly what ads.txt is, who’s using it, how it works, and why it’s important for the advertising industry – specifically, why publishers need to have their ads.txt file updated to increase revenue.
First things first. What is ads.txt?
Ads.txt, or “Authorized Digital Sellers,” is a simple text file that allows digital publishers to authorize who can sell their ad space. It’s a flexible and secure method developed by the IAB for publishers and distributors to publicly declare companies they have authorized to sell their digital inventory.
The IAB initiative was established to prevent unauthorized inventory sales and help prevent counterfeit inventory from being presented to advertisers.
In particular, ads.txt aims to tackle domain spoofing (a type of ad fraud) and arbitrage, a process in which impressions are bought, repackaged, and resold at a higher price by a third party. Ads.txt helps solve these problems by indicating the authorized resellers of a publisher’s inventory.
Who’s using ads.txt?
According to Pixalate’s App-ads.txt and Ads.txt Trends Report 2019, ads.txt adoption has skyrocketed with over 2 million domains having ads.txt. All the top performers are utilizing ads.txt including 45% of the top 1000 domains listed in Alexa, 75% of top programmatic sites, as well as small to premium publishers alike. This is one bandwagon you want to be jumping on.
The top 3 advertising systems using ads.txt as reported by FirstImpression.io are Google with a 94% share (also the most common “Direct” partner), followed by Rubicon Project (now under Xandr) and Appnexus (now under Xandr) with 85% and 84% shares respectively. AppNexus, A Xandr Company, is the most common “Reseller” on ads.txt files.
How does ads.txt work?
Programmatic buyers crawl the web and generate records of Authorized Digital Sellers with inventory they’d like to purchase. When a buyer receives a bid request from inventory on one of these domains they can verify the sale using the information contained in the ads.txt file.
Brands and advertisers can check which publishers have an ads.txt file under their domain and view its contents by simply adding “/ads.txt” to the end of the root domain, e.g. newyorktimes.com/ads.txt.
Here’s how ads.txt works in the programmatic ecosystem:
Here are the 4 easy steps for correctly implementing your ads.txt file:
1. Double-check that you’ve included all existing demand and ad partners in your ads.txt file
2. Verify that every authorized seller has the correct Account Network ID
3. Make sure you have the most up-to-date file from every partner (you can always find the updated ShowHeroes ads.txt file in your ShowHeroes AdHero account)
4. Maintain the ads.txt file. Every authorized seller constantly updates their records. It’s your responsibility to stay on top of updating the file. The adstxtmanager tool is a free, great resource to help with ads.txt maintenance.
Skipping any of these steps can significantly decrease your ad revenue.
Read more about why it’s necessary to include an ads.txt file in our dedicated FAQ.
How ads.txt impacts publisher revenue
Ads.txt has become the gold standard to combat domain spoofing and ensure quality inventory while helping reduce fraudulent inventory purchases. As a publisher, having an ads.txt file means you will be eligible for all platform ad campaigns (more buyer demand) and will avoid losing future ad revenue as platforms change default buyer settings. Ads.txt also helps ad buyers to verify dealers and thereby prevents unwanted traffic transactions.
Without an ads.txt file, less and less ad demand will be available when a major ad network changes its default settings to favor verified ads.txt inventory.
In fact, the majority of DSPs (demand-side platforms) today only consider ads.txt verified inventory, ads.txt it is no longer a “nice-to-have”.
Sites without ads.txt files are labeled as less “trustworthy” with programmatic buyers and therefore will be excluded from monetization opportunities from all participating platforms in the ads.txt initiative. Without a clean, updated ads.txt file, publishers are locked out of any reputable demand networks and will lose massive amounts of revenue.
Can ad fraud occur despite implementing ads.txt?
Stating that ads.txt resolves any and all types of ad fraud would be telling fairy tales. IAB Tech Lab underlines this point in its very helpful article “The Three Deadly Sins of Ads.txt and How Publishers Can Avoid Them” stating, “ads.txt was never intended to solve every fraud problem in ad tech; it was meant to solve a specific form of publisher and intermediary fraud called ‘domain spoofing’.”
In an ads.txt file, platforms are labeled “DIRECT“, meaning Direct Sellers or “RESELLER“. A Reseller can theoretically sell traffic to other platforms; the problem is that it’s not always clear which ones. Another issue is that over the past few years, publishers’ ads.txt files have grown tremendously, often exceeding thousands of lines making it very difficult to read who is a real seller.
IAB Tech Lab explains,
The SupplyChain Object allows for greater transparency and also helps prevent fraud by letting buyers identify legitimate resellers of inventory right through the supply chain from the publisher to the buyer.
Ads.txt vs. sellers.json
The ads.txt file, hosted by publishers, contains the advertising exchanges and the account IDs that are authorized to sell the inventory. Sellers.json files lists the sellers operating on the exchange (SSPs, ad networks, other resellers) with the domain and name of each seller. Simply put, sellers.json is an equivalent of ads.txt but for sellers.
While ads.txt legitimizes the last party in the supply chain, with sellers.json buyers can identify all the various participants in a bid request as it standardizes a way for supply-side platforms (SSPs) and exchanges to list the other sellers they transact with. Sellers.json also helps reveal inefficiencies along the way and presents potential room for SPO (Supply Path Optimization).
Additional Ads.txt Resources
If you need some extra resources that explain in detail how to create, implement and update your ads.txt file, here you go:
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