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Understanding Ads.txt and What It Means for Programmatic Advertising

Programmatic advertising has rapidly grown from a niche ad format to one that controls a growing share of digital ad dollars as it reaches into categories like TV and video. But as programmatic matures, it also faces growing scrutiny from ad buyers, sellers and intermediaries. One area of particular concern is that the automated nature of programmatic buying and selling of ads makes it susceptible to bad actors who sell fraudulent inventory to advertisers. One potential solution to this challenge is the development of an anti-fraud tool called ads.txt. What is ads.txt? And what benefits does it offer publishers and advertisers associated programmatic campaigns?

What Is ads.txt?
Ads.txt, which stands for “Authorized Digital Sellers,” is a standard launched by the IAB in 2017 in direct response to the growing problem of counterfeit programmatic ad campaigns. As explained by the IAB in its announcement, the ads.txt standard “aims to address the issues caused by counterfeit inventory by giving content owners and distributors a simple, flexible, and secure way to declare who is authorized to sell their inventory.” In the past, the automated nature of programmatic transactions meant that ad buyers often had no way of confirming that the publisher they were buying from was in fact the “real deal.” Consider the example of a buyer who thought they were buying ad space on Huffington Post, but unknowingly purchased ad space from a website that was simply pretending to be the Huffington Post. Ads.txt provides a standardized format for all publishers to post a text file directly on their website, offering an easy method for buyers to confirm which programmatic platforms are verified to sell a specific publisher’s inventory.

What Are the Benefits of ads.txt?
The biggest benefit of ads.txt is increased industry trust. Advertisers are assured that the programmatic inventory they’re buying is legitimately  being sold by their preferred publisher. And for publishers, ads.txt provides an added safeguard to protect their brand perception with advertisers. “Unauthorized reselling can be really damaging to publishers’ brands, so we need to do our part,” said Business Insider CRO Pete Spande speaking about the benefits of implementing ads.txt in an interview with Digiday.

In addition to the immediate opportunity to reduce counterfeit buying and selling, the growth of the ads.txt format is a symbol of the continued maturation of the programmatic buying. As programmatic ad spending has continued to grow both in dollar value and as a percentage of total digital spend, advertisers have rightfully questioned the ability of this automated method to provide the necessary levels of transparency, measurement, brand safety and legitimacy they’ve come to expect from other types of advertising. With ads.txt, the industry is providing further proof that programmatic is ready to deliver on those requests.