How the file works:
Ads.txt creates a publicly accessible record of authorized digital sellers (this is where the acronym of “ads” in ads.txt comes from) for advertisers to index and reference if they wish to purchase inventory on a site.
When a site is in onboarding and has received the necessary approvals to have ads implemented on their site, Monumetric, or a publisher managing the file manually, posts their list of authorized advertisers to their domain via the ads.txt file. All websites running programmatic advertising will have this file publicly accessible at their URL: example.com/ads.txt. Advertisers will crawl the internet to find published ads.txt files to create a list of authorized advertisers for each participating website. Programmatic buyers (AKA advertisers) can then create a filter to match their ads.txt list against the data provided when a website calls an ad server and begins requesting bids for ads on the site.
This matching process ensures that only advertisers with clean ad demand can buy ads on a website.
Sources:
Let’s Rewind: What is Ads.txt
How Ads.txt Impacts Your Website’s Revenue
Maximizing Revenue: How to Maintain Your Ads.txt with Monumetric