With billions of dollars at stake, the digital advertising industry has attracted bad players who are fraudulently siphoning revenue from our industry, costing both publisher and brands dearly. It is estimated that it could cost the ad business over $16 billion globally in 2017 out of a total $85 billion in spend. As a result, the industry is looking for ways to deal with advertising fraud. Ads.txt is at the top of the agenda as a way to help resolve this problem.

What is ads.txt?

Ads.txt is an initiative driven by the IAB Tech Lab that helps publishers declare who is authorized to sell their inventory therefore helping to prevent profit from counterfeit / fraudulent inventory.

The IAB Tech Lab states that its mission is to “increase transparency in the programmatic advertising ecosystem.” The “ads” in ads.txt, the IAB continues, stands for “authorized digital sellers” and it’s “a simple, flexible and secure method that publishers and distributors can use to publicly declare the companies they authorize to sell their digital inventory.”

The idea is simple: Publishers place a file on their server identifying exactly which companies they sell their inventory through.

Why is important to the buyer?

As publishers adopt ads.txt, buyers will be able to more easily identify the authorized digital sellers for a participating publisher, allowing brands to have confidence that they are buying authentic publisher inventory.

Buyers are also trying to reduce layers of intermediaries — they want to feed more money to the publishers and prefer to work with networks like Sovrn that have a direct relationship with the publisher.

Many key buyers and buying platforms, including Google’s DoubleClick Bid Manager (DBM), are making it clear that they will show a preference to publishers with the ads.txt file installed. The director of programmatic at DigitasLBi said in an open letter: “We will be looking to adopt this protocol in our buying as soon as the fourth quarter of 2017, so we encourage your participation as soon as possible.”

“By the end of October, DoubleClick Bid Manager (DBM) will only buy inventory from sources identified as authorized sellers in a publisher’s ads.txt file when a file is available,” writes Ginny Marvin in Martech Today. “Presumably, at some point, ads.txt will be a requirement for DBM.”

Why is this important to the seller?

Ads.txt gives publishers control over their inventory in the market, making it harder for bad actors to profit from selling counterfeit inventory. This is clearly a big issue for major brands, but the adoption across the industry as a whole is important, as it will deliver an industry standard for everyone going forward.

The actual ads.txt file is extremely small and takes almost no time to load. Implementation is relatively easy, and there’s no cost involved.

Another bit of good news for publishers: the Wall Street Journal recently reported that “the average price of ad space purchased through Google’s ad-buying systems has increased over the past three weeks,” thanks to ads.txt.

What next?

Sovrn fully supports the rollout of ads.txt, and we are keen to help publishers to get up and running immediately. We encourage all our publishers to install an ads.txt file ASAP — this link shows you how.

As more sites adopt ads.txt, buyers will more frequently prefer to buy from sites with the file live. Therefore, we recommend you do this sooner rather than later and make sure you include Sovrn as a trusted source. Also consider familiarizing yourself with the IAB Tech Lab’s spec on ads.txt, a peer-reviewed standard developed with the support of the OpenRTB working group.

Finally, the introduction of OpenRTB 3.0 will bring a new iteration of ads.text in ads.cert, which will endeavor to certify the type of data transferred in an ads.txt file. Note that this is unlikely to see widespread adoption until Q3 2018 or beyond, when most of the major platforms have upgraded to this new version.

Andy Evans has worked on all sides of the media industry from print and digital publishing, in an ad agency and most recently, ad tech. He’s worked with many of the world’s leading global brands and has been in digital media since 1997. Since the acquisition of OnScroll, he joined the executive team of Sovrn to integrate and run its European operations with Sovrn and has more recently taken on the role of Chief Marketing Officer for the brand globally. Andy is also an industry panelist and speaker on all things digital advertising, with key expertise in viewability.