MightyHive Proves Ads.txt Stops an Alarming Amount of Ad Fraud

Earlier this week, programmatic ad support company MightyHive released the results of an experiment with ads.txt, and it’s one that every video marketer needs to know about. Working with The Guardian US and Google, MightyHive made display and video ad purchases on a demand-side platform (DSP) that works only with ads.txt-validated partners (Google Display and Video 360) and also on a DSP that bids on any inventory.

The results were eye-opening. Examining the results after the sales were completed, MightyHive found that 100 percent of the display ads placed through the ads.txt-compliant system went to legitimate sellers, while 99 percent of the display ads purchased through the second DSP went to legitimate sellers. However, the results were far different for video sales: For video, 100 percent of the inventory purchased through the ads.txt-compliant system went to legitimate sellers, but only 28 percent of the spend going through the second DSP went to legitimate sellers.

Created by the IAB’s Tech Lab in 2017, ads.txt is a validated system where ad buyers can be sure of every player in the supply chain. Publishers create a file listing all the agents authorized to sell their inventory.

Where exactly did that 72 percent of lost ad spend go? The answer is complicated, but it involves bad actors pretending to be something they’re not.

“The 72 percent of spend that was used on counterfeit inventory went to sellers spoofing the system and pretending to be authorized sellers of Guardian US video ad inventory,” explains Myles Younger, director of marketing for MightyHive. “These bad actors could practically be anywhere and could be a mix of real users viewing real (but non-Guardian US) ads or bots ‘viewing’ virtual ads. The bad actors are still able to get into DSP marketplaces because ads.txt (one of the primary systems in place to prevent this type of fraud) does not have anywhere near 100 percent adoption yet.

“Google just announced today that its Display & Video 360 (DV360) ad buying platform will be moving to 100 percent ads.txt compliance, which, for advertisers buying through DV360, will cut the bad actors out of the picture because while bad actors may still be able to sell counterfeit inventory on the ad exchanges, DV360 won’t buy from them.”

The results of this experiment make clear that ads.txt works and it should be an essential for any marketer working in online video.

“Video ad inventory is known to be much more prone to fraud, so the 72 percent number was disappointing and alarming but not necessarily surprising,” Younger says. “However, as alarming as the results might have been, the need for ads.txt needs to be reinforced by reminding advertisers how much fraud might be affecting their campaigns when ads.txt isn’t used to authenticate ad inventory. It’s in the interest of Guardian US to encourage wider adoption of ads.txt to stop bad actors from siphoning off revenue. And Google is doing its part to both increase adoption of ads.txt by publishers while taking steps in its ad buying platforms to cut off the flow of ad dollars to counterfeit sellers.”

Counterfeit inventory costs advertisers billions each year. MightyHive’s graphic, below, explains how the experiment worked and what it showed.

The IAB Tech Lab watched the results, and saw how the experiment validated the stringent use of ads.txt.

“The Guardian’s test with MightyHive illustrated that ads.txt needs to be correctly implemented from buy and sell sides in order to eliminate fraudulently misrepresented domains,” explains Dennis Buchheim, senior vice president and general manager of the IAB Tech Lab. “Buyers need to dictate to their platform partners that they require inventory to be sourced only from the authorized sellers listed in a publisher’s ads.txt file and then verify that they are only buying publisher inventory from those sellers. An unauthorized seller (not in the publisher’s ads.txt file) could potentially be defrauding the publisher, resulting in the publisher not receiving revenue that should be theirs.

“Unauthorized sellers might be able to collect payments on selling spoofed fraudulent inventory by taking advantage of buyers who are not buying only from authorized sellers (and specifically, the authorized seller account IDs) listed in ads.txt files for a given publisher. Unauthorized sellers may also be able to collect payments from exchanges or sell-side platforms that are not monitoring their inventory sources for fraud.”

For more on what ads.txt is and how it works, read “Ads.txt: Everything Online Video Marketers Need to Know.”



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