Dive Brief:

• Mobile ad tech company Kargo has achieved 100% ads.txt compliance, marking the first time a company has done so since the Interactive Advertising Bureau (IAB) launched the programmatic ad tool in May, Kargo told Marketing Dive in an exclusive.
• Ads.txt aims to boost transparency in the programmatic ecosystem and prevent counterfeit or unauthorized impressions by serving as an index of authorized sellers that publishers can post to their domains, allowing programmatic buyers to screen the validity of the ad inventory they're purchasing, per the IAB.
• "What was really important to Kargo in all of this is that we saw the opportunity here that the pendulum was finally swinging back in the direction of content and context and the supporting of premium publishers," Lauren Hendricks, vice president of publisher partnerships at Kargo, told Marketing Dive.

Dive Insight:

Ad fraud has long been a concern in the digital advertising space, and the issue is even more prevalent in the programmatic format given its automated nature. In April, Forrester Research found that marketers in the U.S. spent upwards of $7.4 billion on low-quality ads last year, with more than half going to either fraudulent or unviewable inventory.

However, programmatic isn't inherently negative or it doesn't have to be as risky. What ads.txt aims to do is make the automated process of programmatic buying more transparent for publishers and eliminate the black market for digital ad inventory. One of marketers' big projects this year has been to clean up the digital media supply chain, an effort spearheaded by major brand executives like Proctor & Gamble's Chief Brand Officer Marc Pritchard.

The IAB developed ads.txt in a bid to bring some clarity around programmatic functions and spark deeper conversations about ad fraud and the sale of counterfeit inventory. Though the ads.txt tool isn't a silver bullet when it comes to ad fraud, it does address several issues surrounding programmatic buying in a simple and straightforward fashion that's relatively easy to implement. It works by having publishers upload the text file to their root domain with a list of their account IDs on SSPs, networks and exchanges where advertisers can check to ensure they’re not buying counterfeit inventory.

But since the IAB introduced it in May, adoption of ads.txt has been relatively sluggish. Hendricks cited a lack of education about the system and misunderstanding of how much work the process takes for the slower traction early on.

"It just wasn't a priority, but when we did more education in market for publishers and DSPs across the board, folks understood that it wasn't as much development work as they assumed it'd be," she said.

The ads.txt initiative supports the monetization of these premium publishers, she added, so her team worked with publishers like Business Insider to adopt the system and share how it could benefit them in the long run when it comes to the programmatic process.

Jana Meron, vice president of programmatic and data strategy at Business Insider, told Marketing Dive that Kargo's ads.txt certification could help make advertisers feel more comfortable purchasing inventory from the company.

"Ads.txt means that there is safety for publishers knowing that their inventory is being bought and sold through authorized channels, and they will no longer be undercut or hurt by the bad actors in the ecosystem," Meron said.