In 2017, IAB released ads.txt (Authorized Digital Sellers) to benefit sellers and buyers in the digital advertising industry.

It allows publishers to identify who can represent and sell their inventory. It's a file that the publisher has to add to the site which verifies the ownership and shows the approved ad sellers to buy ad space on your site. It also creates a safe ecosystem for the buyers, as their site will start receiving clean traffic or a licensed retailer for inventories.

Does that mean you're safe from Ad Fraud?

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Yes and No...🤷
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To an extent, ads.txt prevents bad actors from taking action in the ecosystem by stopping the unauthorized selling of publisher ad inventory and domain spoofing.

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But in early 2019, a major flaw surfaced as ads.txt was revealed to be the latest target of fraudsters. The fraudsters had found a new loophole for one of the advertising industry’s most imperative efforts to protect advertisers from being tricked into purchasing ads on fake websites.

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According to a report by Lara O’Reilly from 'The Wall Street Journal,' the fraudsters opened accounts with vendors listed as approved “re-sellers” in publishers’ ads.txt files. The fraudsters then were able to sell their fake inventory as publishers’ authorized re-sellers. They knew the buyers would find the re-sellers listed in the publishers’ ads.txt files.

“Ads.txt was a welcome initiative to tackle ad fraud, but in reality, it is a sticking plaster to treat the symptoms of a market that is distorted by opacity by design,” said Hamish Nicklin, Chief Revenue Officer at the Guardian. “Without a fundamentally more transparent system ad fraud and bad practice will continue to thrive. This could be solved if buyers and sellers reconciled transactions through a transparent system of programmatic receipting.” he added.

Unfortunately, the world of digital ad fraud is a never-ending game between the ad industry and the fraudsters robbing money from it.