Today (May 17), the IAB Tech Lab rolled out a new method for combating ad fraud, specifically of the domain-spoofing variety. It’s called Ads.txt, which stands for Authorized Digital Sellers, or at least it is if you really need to turn the word “ads” into an acronym in this industry.
On paper, Ads.txt is really straightforward. It’s a text file the publisher’s webmaster posts to the publisher domain. In that file is a list of authorized sellers (exchanges or SSPs) the publisher deals with. Buyers can then crawl the web for those lists, and create filters to assure they transact with those exchanges who are authorized to sell the publisher’s inventory. The seller’s ID listed in the bid request will match the authorized seller in the ads.txt file.
The most obvious goal here is to eliminate domain spoofing. To date, when buyers try to avoid buying on counterfeit sites, fraudsters that register domains misrepresenting them as legit premium sites, their methods have typically been manual and error-prone. Creating a whitelist isn’t hard, but it’s often easy to game a whitelist. Ads.txt promises to be much less easy to game.
At the same time, if Ads.txt takes off and works the way it’s intended, it also looks like a blow against arbitrage. The publisher is stating who is authorized to sell their inventory, and the unauthorized re-selling of publisher inventory is one way to define arbitrage. So, great! Two birds, one stone, right? This ought to really throw a wrench in the process of buying premium publisher inventory at a competitive rate, then turn around and sell it for more money—it would limit the number of buyers for arbitraged inventory. Is that right?
Well, it’s arguable. It would appear Ads.txt needs scale to be effective—it will only work if a lot of premium publishers sign on and maintain their lists of authorized sellers. And in an AdExchanger article, IAB Tech Lab General Manager (and IAB SVP, Technology and Ad Operations) Alanna Gombert clarified that Ads.txt doesn’t have a criterion specifying the ad format—yet. That means it still doesn’t solve for the variety of arbitrage where display inventory masquerades as video inventory, and a video creative ends up shoved into a banner ad.
Also, it’s pretty much inevitable that if you start discouraging unauthorized re-selling, someone is going to ask for an exception, and probably a lot of someones. Ari Paparo of Beeswax had a Twitter thread going, pointing out Ads.txt’s complications right now. Yieldbot’s Jonathan Mendez pointed out that in header bidding, Ads.txt will limit a publisher’s partner’s ability to resell backfill. It seems unlikely SSPs will accept that limitation just like that.
Then there are agencies, which have increasingly taken to the practice of arbitrage and come up with new, more palatable names for it. Will agencies let the arbitrage arm of their business go, as they’ve become more and more reliant on it? Again, not likely. Expect to see them demand re-selling privileges.
With every premium publisher susceptible to being counterfeited by eternally tricky fraudsters, it’s important for an entity like the IAB to step in and ask publishers and their partners to commit to a little added transparency. It’s especially handy when it requires only some simple criteria. But there are a lot of legit, powerful players in the digital space who are going to want to complicate things in order to protect their business. We’ll see what happens before the public comment period on Ads.txt ends on June 19.