Ads.txt is driving up online ad prices as adoption grows
- The average price of digital advertising inventory sold through Google’s ad platform has risen since Nov. 8, when Google started blocking purchases of unauthorized inventory identified by ads.txt, according to reporting by The Wall Street Journal.
- The change was attributed to the adoption of the Interactive Advertising Bureau’s (IAB) ads.txt, a solution meant to combat counterfeit and unauthorized programmatic impressions. While costs are rising for online advertisers, the news is also likely an indication that ad fraud is down.
- More than 50% of ad inventory available through Google's DoubleClick comes from publishers using ads.txt and more than 750 of the top 2,000 websites have the technology installed, Google told The Journal.
The entire digital ad ecosystem wins as malevolent players are removed from the process. Fraud is only one of the issues that have forced marketers to take a closer look at their digital investments and even reduce them in some case but addressing it is an important step forward. It's still early days for ads.txt but early reports such as the Journal's are promising.
The frontline winners from ads.txt adoption are publishers, who are reaping the benefits of rising online advertising costs. Programmatic buying, which has come under pressure from growing scrutiny around inefficient buys riddled with fraudulent sites, benefits from an enhanced reputation. Marketers, who have been reconsidering their digital investments in part because of the prevalence of fraud, are likely willing to pay a higher impression rate with the knowledge an actual person is viewing those ads on the premium website the advertiser paid for rather than a spoofed site with impressions triggered by bots.
As recently as this August, ads.txt adoption was fairly low with research from Getintent on its own website inventory finding a mere 1.3% adopting the tech, but the latest news from the Journal is encouraging, indicating the industry is taking steps to end ad fraud. Some of the largest advertisers, notably P&G, have demanded a more transparent media supply chain in digital advertising and ads.txt was the tech fix the IAB launched this past May.
Google expected prices to increase after fraudulent inventory was removed. Pooja Kapoor, head of global strategy, programmatic and user trust at Google, told the Journal prices could continue to increase as ads.txt is more widely adopted.
Next, the digital marketing industry needs to find an effective solution for eradicating fake news and other low-quality content.