What is ads.txt and what does it do?

In the sell-side world of programmatic, there has been a lot of talk in the last 4-6 months about ads.txt. Debate continues as to whether it is pronounced ads-dot-tee-ex-tee or ads-dot-text, however there is a general consensus that is is helping to clean up domain spoofing in the ad exchanges. But what exactly is it and how is it working?

What is domain spoofing?

Domain spoofing is a type of programmatic ad fraud.  It occurs where you have owners of websites or ad networks with poor quality, questionable or dodgy content that aren’t likely to secure much inventory legitimately through ad exchanges or if they did, CPM rates would be low. So they manipulate the calls they send to the adexchanges to represent themselves as a well known mainstream website, claiming to be someone they are not. Advertisers therefore place a bid and there ads will be shown. And to their eyes it will look like valid, high quality impressions.

But their ad will not have been shown on the website they think, if indeed it was seen at all by a human. The mainstream publisher they thought they were buying from has had their name defrauded, and the fraudster walks away with the money.

Given the way it is done, and the fact advertisers don’t always expect to see their programmatic ads in situ, it is a difficult fraud to detect.

What is ads.txt?

ads.txt is a very simple solution to the issue. A publisher will host a basic text file on its website at the address www.website.com/ads.txt ad in this text file they will list all of the approved sellers of their inventory. Networks, exchanges and potential resellers. A DSP looking to purchase inventory on website.com can then do a quick check when receiving an ad request from the site to sense check that the person representing it is approved to sell it.

how ads.txt works
how ads.txt works from IAB

The file itself is just a text file list of the sites or exchanges verified to sell the inventory and looks something like the below example from adexchanger.


ads.txt example file

Is it working?

The early sign are very promising. 15% of the Alexa top 5000 and 55% of the ComScore 200 sites are said to have adopted the technology with publishers such as News UK coming out and saying they have seen a slight increase i revenue as a result. This is down to the fact that more advertisers will be buying legitimate inventory on their websites rather than fake traffic which News UK would not benefit from.

So it would seem we have fonud a simple solution to one of the major fraud challenges facing publishers, although lets not think we have won yet. There are many other fraud challenges with programmatic still to address. 2018 is going to be the year that through a combination of advertiser pressure and technology developments programmatic technology begins to be cleaned up for the benefit of everyone.

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