Already 5 years ago ads.txt initiative, lead by some major digital market players, such as Publicis, Google, Magnite (fka Rubicon Project), Xandr (fka Appnexus), OpenX, Index Exchange, many other advertising agencies, brands, websites, sellers and parties concerned including your very own Digital Matter, has entered the digital industry.
Ads.txt is the abbreviation for the phrase Authorized Digital Sellers, which describes the main purpose of this initiative – to identify authorized digital inventory sellers in as simple, flexible and transparent way as possible.
Fast forward to 2022 and ads.txt, this small basic .txt file, has been adopted by more than half of global publishers with particularly high adoption rate in certain countries, such as Lithuania, Latvia and Estonia with over 90% of all publishers using ads.txt. We're proud to say that Digital Matter was core initiator that has sprearheaded the adoption of ads.txt in the region.
During those years the initiative expanded out of just web inventory to mobile apps with an obvious extension: app-ads.txt
Also, based on the primary idea of ads.txt some new projects has been created, such as sellers.json, SupplyChain Object and others that will be covered in our next blog entries.
The information below perfectly describes why ads.txt was so important 5 years ago and how difficult were the first steps it had to take to lift off.
Take a look at the blog entry below as a history lesson about issues that are relevant to this day.
The origins of the initiative are the growing problem of fraud and the lack of transparency in the ecosystem of programmatic advertising. Inventory fraud or manipulation can occur in many ways, but some of the most popular are as follows:
According to The Pixalate Quarterly Ad Fraud Benchmarks Q1 2017 report, about 31% desktop, 36% mobile and 12% tablet impressions lack transparency.
FT.com has done a research on the availability of its inventory through programmatic platforms and the results perfectly illustrate the current problem: the website apparently has 10 unauthorized sellers of its display traffic and even 15 video streaming sellers although this site does not even sell any video ads programmatically. The website estimates that such advertising fraud costs 1.1 million euros per month.
Ads.txt can easily solve the above-mentioned problems: information found in the file helps the buyer to check who can actually sell traffic he is interested into and automatically exclude sellers do not belong to the list.
The biggest problem for Ads.txt initiative is the chicken or the egg causality dilemma:
Website owners hesitate to join this initiative for a variety of reasons. These reasons vary from fears that too much information about potential inventory sellers can be disclosed (this is especially important for the websites cooperating with sellers of questionable reputation) to mere ignorance about this initiative, its mission, and ways how to join. What is more, the sellers do not exert mounting pressure to website owners to join Ads.txt initiative, thus the process needs some stimulation.
On the other hand, as long as the database of inventory with authorized sellers listed is not large enough, buyers are in no hurry to buy traffic only from the websites participating in the initiative. At the same time, only a few platforms provide the technical means to easily identify and select websites using Ads.txt protocol. Although programmatic traffic issues have been discussed loudly for the past few years, problems and possible solutions are under analysis and some individual companies are taking real action to increase transparency, tangible results are impossible without systematic endeavor and global approach.
All parties concerned clearly understand that the success of this project directly depends on its global market penetration. Although it is not yet visible, some good signs are already here.
The initiative launched at the end of May is gaining a momentum: at the end of June, “GetIntent” data had shown that only 1.3% (i.e. 13 out of 1000) of sites available for the analysis had Ads.txt installed. In mid-August, 6.8% or 34 sites from 500 biggest USA websites (Alexa.com data) were using Ads.txt on their servers. In the middle of September, after analyzing a larger sample (1930 TOP sites selling advertisements, according to Alexa.com) it was revealed the Ads.txt was used in 12.8% or 248 sites out of 1930 tested.
The implementation of the latest digital advertising solutions, services and metrics in Lithuania, Latvia, and Estonia is usually a considerably slower process – Ads.txt initiative is not an exception.
On September 22, we conducted a study of websites from three the Baltic States in order to find out how many sites had this small snippet of code installed. A total of 584 websites were analyzed. The sample was created by merging TOP 500 lists of each country’s websites, provided by Alexa.com, with all the websites participating in the “Gemius” study and the sites belonging to the “Adnet media” network. From the sample, non-advertising websites (banks, public services, etc.) and international brands (“Facebook”, “Google”, etc.) were removed. After these amendments were made, we had:
Lithuania – 216 websites
Latvia – 175 websites
Estonia – 193 websites
The results leave no doubt: out of 584 websites only one was using Ads.txt, which is just 0.001% of all the websites tested in the three Baltic States.
This question is very popular among all the players involved in programmatic advertising. At the moment, Ads.txt is a digital solution that easily and painlessly if not solves, at least considerably contributes to increasing transparency of the programmatic environment, which allows advertisers to save huge sums and significantly increase the effectiveness of their campaigns; for advertising providers this would mean higher prices and higher earnings for their genuine inventory. A win-win situation for all parties concerned – you just have to add Ads.txt into your server and join this initiative.
If you need an individual consultation or have some additional questions about this initiative, do not hesitate to write to gediminas.blazys [at] digitalmatter [dot] ai
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