From ads.txt to RTB 3.0: Getting to grips with the latest evolution in the ad fraud battle

Like any other fast developing industry, digital advertising has experienced growing pains. As power and influence have increased — its 12% share of all ad budgets in 2009 rising to become 40% of today’s $578 billion spending pot — so has the interest of fraudsters. Recent studies show that global ad fraud losses could cost as much as $16.4 billion annually.

Yet, maturity has brought with it fresh solutions to tackle the ad fraud problem, chief of which is ads.txt; an initiative aimed at helping buyers avoid fake inventory, by identifying whether the seller is authorised by the publisher to trade its placements.

But is ads.txt enough to win the battle against ad fraud or should marketers be bolstering their defences with a wider selection of tools?

The story so far

Fraud has proven to be especially troublesome in the digital space because the industry’s complexity makes ad quality hard to track. Before inventory reaches marketers, it passes through a long supply chain — from website to ad network, exchange, and demand-side platform (DSP) — with placement details shared in editable text fields. This means it’s difficult for buyers to secure guarantees about what they are purchasing, and easy for fraudsters to infiltrate the chain. For instance, the most common form of tampering is altering domain name fields so inventory for lower value sites can be relabelled and sold as prime advertising real estate.

Diminishing trust between marketers and supply-side organisations has therefore become a significant issue, and bodies such as the Internet Advertising Bureau (IAB) have launched several initiatives to address this, including the Open Real Time Bidding (RTB) framework. The latest version of which — OpenRTB 2.5 — was intended to increase transparency into automated supply by creating a chain of ad custody. But text fields containing impression information remained editable and consequently vulnerable to fraudsters.  

This brings us to the industry’s tool of the moment: ads.txt.

An imperfect solution

Essentially, ads.txt is an IAB-approved text file, functioning as a list of official sellers for inventory that publishers can share with potential advertisers. For buyers, this provides the ability to verify inventory legitimacy prior to bidding; much like purchasing a Rolex watch from an authorised seller to help ensure it is not a fake. For the wider industry, ads.txt will assist in moving more demand towards genuine publishers, ensuring ads reach their target audiences and boost results.

Considering these advantages, it’s not surprising that the popularity of ads.txt is growing. In addition to attracting high profile adopters such as Google’s DoubleClick, the tool has been implemented by 50% of the comScore 1000 and inspired many DSPs to cease purchasing unauthorised inventory altogether. But this doesn’t mean it’s a panacea for ad fraud.

For starters, the solution offers little insight at an impression level; so there is still a chance advertisers are buying poor quality placements in disguise. Then there’s the fact ads.txt only verifies domain names and does not address other concerns such as fake IP addresses, user IDs, formats, device types, or bot fraud. While adoption is growing, it’s not yet universally adopted, which leaves room for illegitimate ad placements to keep entering the supply chain – and even those that have agreed not to trade with unauthorised sellers are often still buying impressions classified as ‘unknown’, which may themselves by fraudulent.

So what’s next?

While the industry has made positive progress in reducing ad fraud, the fight isn’t over and it’s becoming clear that stronger and more comprehensive tools are needed. This is why the IAB has been working to develop a more effective solution: OpenRTB 3.0.

Submitted for public comment late last year, the revamped protocol is due to set the highest benchmark yet for digital ad fraud prevention. The specifics are still in development, but the biggest confirmed change OpenRTB 3.0 will bring is a stipulation that publishers and vendors must sign every impression they handle by stamping them with encrypted IDs. In doing so, it will produce a precise view of true supply sources and flow that can be checked at any point to ensure placement details are valid; not just that the last platform in the chain has the right to sell them. And although it won’t cover all fraud types, the new certification will go further than domain names: covering ad type, user location, and devices. So, marketers will be able to validate impressions and audiences, and be sure they are getting what they pay for.

Despite its potential to equip publishers, brands, vendors and agencies with the tools needed to effectively fight fraud; it will still take time for RTB 3.0 to be universally integrated. Nevertheless, it’s important to recognise that with the current focus on enhancing transparency and accountability, change is inevitable. In the battle against fraud, defensive capabilities must continue to be developed to protect ROI and quality. The next generation of tools is set to change the face of fraud prevention for good, launching a new age of transparency.

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