Is Ads.txt the Savior of Programmatic?

Developed by the Interactive Advertising Bureau (IAB), Authorized Digital Sellers (ads.txt) gives marketers another - arguably more reliable - option to help avoid illegitimate sellers that arbitrage inventory and spoof domains. This improves transparency for programmatic buyers by having a public record of Authorized Digital Sellers and giving publishers more control over their products.

It's estimated that more than 600,000 sites use ads.txt and among the top 1,000 programmatic ad sellers, 77% now use it.

Why do you need ads.txt?

Domain spoofing - a form of phishing - is incredibly popular on programmatic exchanges. Research found that of 16 publishers - including the Washington Post, Business Insider, and the New York Times - $3.5 million a day was spent on fake video inventory that claimed to come from their websites

Integrating ads.txt allows marketers to prevent domain spoofing and unauthorized selling of inventory by offering a simple way to verify whether the re-seller in question has been authorized by the publisher. It gives brands and buyers themselves greater confidence in what they are buying via online ads.

Through ads.txt, marketers can assign each ad provider they work with a unique Publisher ID to help them, as well as the domain owner, to identify who the seller is and whether or not they're authorized.

It's largely encouraged that brands publish their ads.txt file to ensure the highest level of transparency throughout the ad supply chain and minimize the risk of marketing fraud.

Unsurprisingly, Google is the most popular vendor on publisher's ads.txt files, featuring on 97% of all files.

Will it save programmatic advertising?

The real charm of ads.txt is that it is incredibly simple, meaning any publisher can do it. There's no major set-up costs or in-depth training professionals need to be able to start using it and it has a range of potential benefits for marketing. The biggest and most relevant of these is that it can help to create more trust between sellers, publishers and buyers. However, not everyone will be comfortable making who they're selling to public for all to see.

There may also be another stumbling block that ads.txt will need to overcome; its success hinges on widespread adoption. Both advertisers and publishers need to embrace the idea to make it work long term, but if this happens, marketers can expect their ads to perform much better because it offers a reliable way to conduct programmatic advertising.

Over time, ads.txt should see the user experience improve, but - as such - it will also likely lead to programmatic advertising becoming more expensive.

Is it the first step towards blockchain advertising?

Blockchain advertising is another element being pushed by IAB for the added privacy it could potentially bring to publishers and buyers. Ads.txt Plus is being run on the Ethereum testnet to see whether blockchain could be used to supplement ads.txt.

It's the first decentralized application (DApp) that's enabled digital advertisers to fully experience blockchain advertising, which would allow two parties to make a secure transaction on a decentralized network.

As a transparent ledger, any data transferred to the peer-to-peer network becomes encrypted and the system transports it to its destination without any point for changes. This allows ultimate transparency for marketers but could also reduce costs and hassle.

It's estimated that blockchain tech can process in excess of 24,000 transactions every second and advertisers will be hoping this can be pushed much further. At the moment, blockchain is still too slow to process real-time digital ads but there's definitely potential there.

However, there would be much more to gain than just speed; it could bring a higher level of accuracy to marketing campaigns. Blockchain marketing would provide an independent and immutable record of activity and could even verify sources of impressions if it was disputed by either the brand or the publisher.

Potential, but we're only at the start

What's clear is that there are plenty of potential areas of marketing that are yet to be fully explored. If blockchain and ads.txt can be brought together in a way that allows brands to bring more legitimacy to their campaigns, it can even improve performance, boost user experience and reduce costs.

Many major players are investing in blockchain and the potential applications of it when it comes to advertising. But it's clear that the technology needs to be developed further if the true benefits of blockchain marketing are to be reaped.