In 2017 IAB released ads.txt (Authorized Digital Sellers) as an initiative to benefit both the sellers and buyers in Digital Advertising Industry.
It allows publishers to identify who can represent and sell their inventory. It's a file that the publisher has to add to the site which verifies the ownership, and shows the approved ad sellers, to buy ad space on your site. It also creates a safe ecosystem for the buyers as their site will start receiving clean traffic or it's a licensed retailer for inventories.
Does that mean you're safe from Ad Fraud?
Yes & No...🤷
To an extent ads.txt prevents bad actors from taking action in the ecosystem by stopping the unauthorized selling of publisher ad inventory and domain spoofing.
But in early 2019, a major flaw surfaced as ads.txt was revealed to be the latest target of fraudsters. The fraudsters had found a new loophole for one of the advertising industry’s most imperative efforts to protect advertisers from being tricked into purchasing ads on fake websites.
According to a report by Lara O’Reilly from the The Wall Street Journal, the Fraudsters opened accounts with vendors listed as approved “re-sellers” in publishers’ Ads.txt files. The fraudsters then were able to sell their fake inventory as publishers’ authorized re-sellers. They knew the buyers would find the re-sellers listed in the publishers’ Ads.txt files.
“Ads.txt was a welcome initiative to tackle ad fraud, but in reality, it is a sticking plaster to treat the symptoms of a market that is distorted by opacity by design,” said Hamish Nicklin, Chief Revenue Officer at the Guardian. “Without a fundamentally more transparent system ad fraud and bad practice will continue to thrive. This could be solved if buyers and sellers reconciled transactions through a transparent system of programmatic receipting.” he added.
Unfortunately the world of digital ad fraud is a never-ending game between the Ad industry and the fraudsters robbing money from it.