What is Ads.txt and how does it work? Why is it so important? -Complete guide

The IAB Tech Lab introduced the Ads.txt file back in 2017 to safeguard ad inventory and prevent programmatic ad fraud. Since then, it has played a pivotal role in fostering transparency in the digital advertising industry. Despite its effectiveness, many publishers remain apprehensive or unaware of the advantages of this initiative. This article provides a concise summary of Ads.txt, practical tips for implementing it on WordPress and Google AdSense, and how it benefits publishers and advertisers alike.

What is Ads.txt?

Ads.txt, which stands for Authorized Digital Sellers, is a text file created to tackle ad fraud, specifically domain theft and hijacking. It improves the transparency of a publisher's ad inventory by disclosing the origin of purchased and resold impressions.

 

Through ads.txt, publishers can publicly list the authorized sellers of their ad inventory and prevent fraudulent activities associated with unsanctioned inventory sales. Moreover, ad buyers can verify the sellers and steer clear of unauthorized traffic sales thanks to ads.txt.

 

Ads.txt serves the following purposes:

1. Identifying authorized entities to sell publishers' ad inventory.
2. Allowing buyers, ad exchanges, and others to crawl publishers' domains.
3. Matching seller account IDs in bid requests.
4. Shielding advertisers from phony ad inventory.

Here's how ads.txt operates:

 

Publishers insert the ads.txt file on their website, verifying domain ownership and listing partner accounts (like ad exchanges and SSPs) that can sell their ad inventory. As a result, advertisers can easily access a comprehensive list of all authorized publishers and their ad inventory online.

 

When a bid request from the publisher reaches the advertiser, they only have to match the publisher's account ID with the ads.txt file.

 

If the account ID matches, the advertiser can be confident that the publisher is legitimate. Conversely, if the buyer finds that the publisher's ID is unverified, they can choose not to bid on the publisher's ad inventory.

 This is how it works, 

Image source- IAB