The Problem behind Ads.txt
or perhaps we need to talk about 2 problems behind Ads.txt: the first is the domain arbitrage and the second problem is domain spoofing. When domain arbitrage happens, the publisher still gets some money. When Domain Spoofing happens the money never arrives at the publisher. But let’s try to understand how these ad frauds work.
Starting with the first. Domain Arbitrage. In the advertising industry, there are resellers that are not authorized by the publishers to arbitrage their inventory. The resellers sell the inventory on programmatic, buying it cheaper from the publishers and taking then a percentage. Resellers are considered middleman’s, reselling the inventory on the exchanges, with URL transparency or in a semi-transparent way. This makes the inventory expensive to buy, and at the end, the money is not going to the publishers. This is called Inventory Arbitrage.
Domain Spoofing is another issue on Programmatic. Since is the publisher that is passing the url on the bid request, it is easy to show a premium domain on the bid requests. Advertisers think they are buying premium inventory, when in fact they are buying advertising on another website. Will give you an example. The advertiser is buying on Spiegel Online when in fact is buying ads on fakenews.com. Domain Spoofing should be detected and avoided by the SSP’s or DSP’s, but with more and more players in the RTB ecosystem, this is difficult to detect. IAS (Integral Ad Science) says that up to 12% of the display impressions were fraudulent in 2017, and on Video this number of fraud increases to 16%.
Let’s talk about one example: Methbot. Methbot is the most famous case of ad fraud, detected by White Ops. Russian hackers did almost 5 Millions per day using bots and masking 6000 premium domains and more than 250000 URLs. The domains were from premium publishers like Vogue, and the ad type was video, due to the higher CPM’s. The hackers also register IP addresses in US, so they look American homes.
Here are 2 examples of ad fraud, domain spoofing, and unauthorized inventory arbitrage, that the implementation of Ads.txt can help to solve.
What is Ads.txt?
If you know robots.txt, from SEO, this explanation will be easier, as Ads.txt is inspired on the robots.txt from SEO / Google. Ads.txt is a txt file named ads.txt that is inserted on the main domain of a website. This file will inform the RTB players about the Authorised Digital Sellers of the domain. According to IAB, the Interactive Advertising Bureau, this makes hard for bad actors to profit from selling counterfeit inventory across the ecosystem.
Ads.txt works in advertising as Robots.txt works in Search. On Robots.txt the domain says which folders authorises to the search engines to be index publicly. On Ads.txt the domain informs which RTB sellers can sell ads there.
So how does Ads.txt works?
The content owner creates a Ads.txt file and uploads on the main directory of the domain. Example: ppc.land/ads.txt. On the file Ads.txt the content owner informs the supply chain authorised to sell advertising, for example google.com. The DSP’s crawl the domains and looks for the Ads.txt. When Advertisers are buy ads targeting domain, through a DSP that supports Ads.txt, Advertisers have the guarantee that this DSP is only buying on ads of a domain through the authorised sellers.
Not only the DSP’s and the Publishers can benefit with Ads.txt. The Exchanges can also have filters to avoid Domain Spoofing and Inventory Arbitrage, as now they will be able to know the authorised ...