Three Challenges to Overcome in the Adoption of Ads.txt

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It's no longer breaking news that the digital advertising industry is plagued by an epidemic of fraud. As we approach the one-year anniversary of the discovery of Methbot, the Russian advertising scam that stole millions of dollars per day from online marketers, it is abundantly clear that concrete steps need to be taken to protect both publishers and advertisers. Domain spoofing, the practice through which resellers pass off fake ad inventory as reputable publishers like Business Insider or CNN, remains an existential threat to the stability of the advertising industry.

The good news for our industry is that forward-thinking organizations like IAB (and its IAB Tech Lab Research and development consortium) are coming up with weapons to fight domain spoofing and bot networks. Ads.txt, IAB's recently debuted public inventory of authorized vendors for content owners, is a simple but powerful tool to take back control of ad buying. But while ads.txt has already demonstrated great potential and appeal -- and even as key players like Appnexus are jumping in with two feet and publisher adoption is taking off -- there are a few serious challenges that need to be addressed if we want to truly stamp out fraud in the digital advertising space.

1. Making the whitelisting process as smooth as possible

Of course, there is nothing more painful than to lose valuable advertising dollars to scammers. However, the ads.txt platform is still going through its own set of growing pains with regard to its process for whitelisting direct and indirect vendors. A publisher that works with multiple vendors will have to collect and enter the information for each individual vendor; should they start working with a new vendor, they will have to update their ads.txt whitelist immediately or risk missing out on ad revenue.

Efforts to streamline this process are critical to making a tool like ads.txt as attractive as possible to publishers. This type of protective measure is only effective if it is widely implemented by publishers, and if marketers purchase only through vendors that have been whitelisted by their partners. As ads.txt continues to grow in popularity, investments in its usability will pay off tenfold and should lead to increases in revenue for publishers.

2. Tackling the issue of transparency

At the moment, publishers are presented with two options: disclose all of their partners through ads.txt and prevent domain spoofing; or maintain a degree of secrecy with regard to their vendor list and run the risk of losing money to advertising fraud. This lack of a middle ground in terms of transparency puts publishers in a challenging situation, as not every company is eager to reveal their complete list of partners.

A creative solution that allows publishers to verify their direct and indirect partners without having to publicly disclose each and every vendor on their list could be crucial in enticing more publishers to get with the program. Recent initiatives to adapt ads.txt on blockchain technology appear promising in this regard -- although there are still substantial challenges to overcome -- and could provide a viable trade off between privacy and traceability.

3. Preventing overzealousness to protect vendors

While publishers rush to implement ads.txt and bolster their advertising income, it's important to bear in mind the other half of the equation: vendors. Any error in the whitelisting process could lead to disastrous effects for legitimate vendors, and programmatic platforms must be deliberate in ensuring that they aren't moving too quickly in adhering to the ads.txt initiative.

The sheer volume of information involved in this process should lead publishers, vendors and platforms to exercise caution. A single vendor may work with multiple SSPs and have several seats in different markets; each of these will have a unique seat number, and the vendor will need to share each individual number with a publisher to be whitelisted. A typo on even one of these seat numbers could result in huge losses for vendors. And after the losses already sustained in the digital advertising industry, we should be making every effort and exercising every caution to ensure that no more money is lost.

Ads.txt is a great first step toward tackling the transparency issue in the industry. If we get the three things above right, then the industry -- and its inventory -- will indeed become more transparent and, inevitably, more valuable for end users. This will attract more bids and increase demand, driving up CPMs along the way. Ultimately, if executed well, the initiative will engender more trust and revenue for everyone.

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