Ads.txt became 2017’s hottest ad tech buzzword, despite its awkward name. The IAB-backed tool helps ad buyers avoid arbitraged inventory and spoofed domains, and ad tech die-hards can’t stop talking about it. Here are five things we learned about ads.txt in 2017.
Adoption was initially slow
In the first 100 days of ads.txt’s release, only 13 percent of the 10,000 most popular websites on the internet adopted it, according to Ad Ops Insider. Few publishers adopted ads.txt early on because their tech teams were overcommitted to other projects, they didn’t understand how ads.txt would benefit them or they didn’t want ad buyers to know the publishers used unauthorized resellers to help sell their inventory.
Adoption began to increase once publishers began to better understand the benefits of ads.txt, buyers started telling pubs to adopt it or be blocked and Google threw its weight behind the initiative.
“As programmatic platforms began to show support and explain the direct impact [of ads.txt] on inventory rates to publishers, publishers began to adopt quickly,” said Rachael Churchill, vp of quality and operations at ad tech firm Conversant.
It reflects Google’s power over publishers
The percentage of the 10,000 most popular websites using ads.txt jumped from 13 percent to 44 percent within a month after Google announced in September that its most popular ad products would begin filtering for ads.txt. Other platforms were adopting ads.txt filters during this time, so this increase can’t solely be attributed to the search giant. However, Google clearly had a large role in popularizing ads.txt.
Google pressured publishers to get on board with ads.txt by saying its DoubleClick Ad Exchange, AdSense network and demand-side platform DoubleClick Bid Manager would use ads.txt to filter out unauthorized sellers. In the background, Google added an ads.txt management tab to its ad server’s dashboard and sent emails to publishers using its DoubleClick exchange that said their ads.txt files should be updated “in order to prevent impact to your earnings.”
“Google is definitely the force to get ads.txt up and running,” said Murat Deligoz, CEO of ad tech company Advelvet, which helps publishers set price floors in Google’s ad exchange.
It gets contentious
Advertisers adopting ads.txt to avoid unauthorized sellers is bad news for vendors that resell inventory without a publisher’s permission. After ads.txt started getting traction, third-party resellers began asking publishers to list them on their ads.txt files, even though the publishers had no direct relationships with these companies.
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The reseller vendors said they were just trying to make direct connections with publishers whose inventory they were already selling. But other ad tech companies disagreed. OpenX even emailed its publisher clients that the tactic was a “scam.”
“Any time a company uses a standard for ill, it becomes contentious,” said Alanna Gombert, CRO of MetaX, a blockchain company that built a product that tracks updates to publishers’ ads.txt files.
Prices are rising
Inventory prices in Google’s ad exchange are rising, and the company attributes the increases to ads.txt.
As more publishers adopt ads.txt and buyers start using it to filter inventory, the price of premium publishers’ inventory will continue to increase as the money spent on spoofed domains instead goes to legitimate publishers, said Jeremy Hlavacek, head of global automated monetization at IBM Watson Advertising. Hlavacek believes ad buyers and their vendors are not prepared for these price changes, though.
It’s not foolproof
Marketers and publishers love to gush over how ads.txt will help them cut out shady ad tech vendors. But ads.txt has limits as a fraud-fighting tool.
Rory Edwards, vp of marketplace and strategy at demand-side platform Dataxu, said that although ads.txt is gaining traction, a lot of quality publishers have yet to adopt it. Ads.txt can be used to filter out domain spoofers if a site has an ads.txt file publicly posted. But if buyers limit their campaigns to only run on sites with ads.txt, then they’ll restrict their ability to reach targeted audiences at scale.
Publishers are prone to misspelling the supply-side platforms listed in their ads.txt files. Misspellings are problematic because they cause DSPs to pass by the mislabeled vendors, resulting in lower revenue for the publisher and its SSPs. About 15 percent of the top 1,000 Alexa sites have formatting errors in their ads.txt files, according to FirstImpression’s ads.txt dashboard.
“It seems really rickety for millions of dollars to be spent on,” said Jay Friedman, COO of programmatic agency Goodway Group.
Most ads.txt files also fail to specify the type of inventory an authorized seller can represent. Some publishers like Hearst and Turner state in their ads.txt files if a vendor’s access is limited to a particular type of inventory. But most publishers don’t make it clear if a vendor’s access is limited to display, video or native. Without this clarity, authorized vendors can still repackage display inventory as video and make money by arbitraging the difference between display and video CPMs.
“Things will get ironed out,” Gombert said. “Software development is a process, and you have to start from point zero and improve and iterate.”