It’s not news that fraud is rampant in online advertising. It turns out that one of the biggest reasons is the fact that the buyers and sellers of online advertising in large part do not deal directly. They transact through third-party brokers and marketplaces. Increasingly, it’s now computers ordering through third-party brokers and marketplaces – the wonderful world we call programmatic. With no humans watching, much less policing the buying process, it is not surprising that crooks and thieves have rushed in.
One of the easiest types of fraud is simply to misrepresent yourself online. You can tell an online marketplace that you represent the CNN website, collect the revenue, then run the ads you sold on some other website, often one that gets lots of bot traffic and other fake clicks in order to show performance.
To fight this type of misrepresentation, the Internet Advertising Bureau (IAB) created a new standard called ADS.TXT. It’s a small standardized format file that a website owner creates and places on the website that lists all the website’s authorized sellers. If you’re familiar with ROBOTS.TXT, it is exactly analogous.
The idea is that programmatic advertising buyers can easily and confidently check a website’s list of authorized resellers. It’s a full, workable solution to a significant problem, but it comes with one big catch: the ADS.TXT file is necessarily open to everyone who wants to view it. And a lot of publishers and other website owners aren’t thrilled about exposing what they consider proprietary information.
The solution? In my view, it’s a central database, operated by an independent third party. The same information can be placed in the database, but access can be easily restricted to those who “need to know” the information. I’ve always liked opportunities where an industry needs to share information but at the same time doesn’t want to make that information public. A neutral data provider is most times the perfect answer, as I think it is in this case.
Moreover, a central database can add additional value, because it can track what is happening. It can automatically nag website owners who don’t update their reseller lists regularly. It can check which advertising marketplaces are using the service. In these and many other ways, it can actively work to keep all players engaged and honest.
And of course, data being data, there’s an easy opportunity to aggregate this reseller data to look for sales trends and market share. This information can be given or sold back to the industry without any privacy concerns.
ADS.TXT is just one example of a good idea that could be a much better idea if there was a trusted data provider in the middle, protecting privacy while mediating and recording access to ensure compliance and data accuracy. I’d like to see ADS.TXT as what you might call ADS.DATA. You’d be wise to look for analogous opportunities in your own market.
The article is adapted from the InfoCommerce blog.
