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With the rise of programmatic buying, the process of ad buying and selling has lost some of its transparency. One of the manifestations of this transparency loss is the misrepresentation of supply in the marketplace.  Today, top-selling sites are seemingly available at remarkably low prices and being offered through channels other than the original publisher. This fraudulent reselling, or worse misrepresentation of a publisher’s inventory, damages the credibility of not only the publisher but also the marketplace as a whole with buyers/advertisers. Additionally, with computers doing the work of buying and selling, this sort of fraud can be hard to spot. To be clear, the amount of this activity is still relatively low but it’s been growing. As nearly 80% of display ads will be transacted programmatically in 2017 (up from 65% in 2015), if this problem is left unchecked, it will only continue to grow .

It wasn’t all that long ago when publishers knew the advertisers that were buying their supply, and advertisers were certain that their ads would show up on that publisher’s site. It was a direct handshake. As automation of the buying and selling process increased, this direct relationship became more distant, and the stage was set for bad actors to enter the marketplace and spoof and/or resell a publisher’s inventory; to who and for how much unknown. 

Enter ads.txt, Authorized Digital Sellers.
Ads.txt is an attempt to bring back the ‘old days’ when publishers knew their buyers and vice-versa; it is an attempt to digitize and automate the ‘handshake’ between buyers and sellers. Backed by industry players including Google, AOL, Yahoo, The Trade Desk and many others in the IAB OpenRTB Working Group, Ads.txt “...provides a mechanism to enable content owners to declare who is authorized to sell their inventory.”

The mechanics are pretty straight-forward. Publishers put a file on their web server that declares all the platforms who are allowed to sell their inventory. Then, if a buyer (DSP) sees that inventory but it is coming from a platform/seller who is not listed on the ads.txt file for that publisher, they don’t buy it. 

We think ads.txt is a good thing for the industry and represents another way in which transparency is being put back into the programmatic space. RhythmOne encourages our publishers to set up their own ads.txt file and actively works with them to implement it. Though some publishers have expressed reservations about exposing all their selling partners in ads.txt, we think the benefits outweigh the risks.  By implementing ads.txt a publisher gains greater control of their supply and expose unauthorized reselling.  This greater transparency - even though it might feel a bit like a magician revealing the secrets to his trick – provides publishers with a powerful tool to protect and enhance supply value.

For the publishers who are waiting for the ‘big guys’ to implement ads.txt, the time has come. Not only are publishers like msnbc.com, businessinsider.com. motortrend.com, cnn.com, and newsweek.com implementing ads.txt, many brands and demand side platforms (DSPs), notably The Trade Desk, are scanning sites for ads.txt files and if one exists the seller of that site’s inventory needs to be on it.

Ads.txt is just one way that transparency is being injected back into the marketplace and takes direct aim at amplifying the level of trust that exists between buyer and seller. In an upcoming blog post I will talk about another way we’re working with publishers to increase marketplace transparency – Header Bidding.