The digital advertising industry has come a long way when it comes to recognising the impact its carbon footprint is having on the planet. June Cheung from Scope3 explores carbon reduction.
I’ve been having conversations with agencies and brands about sustainable digital advertising for the past eight months and in that short period of time, I’ve noticed a step-change in awareness and a willingness to effect change.
This is being driven by the complementary dynamics of it being the right thing to do for the planet, whilst also being good for business. Increasingly, investors, employees and consumers are putting ESG pressure on companies and green credentials are rapidly becoming an essential part of a pitch desk.
This accelerated understanding and awareness is driving more companies to measure and model the carbon impact of their digital advertising. No mean feat given the complexity of the digital supply chain. Measuring is an important first-step.
However, now that more agencies and brands have started to measure and overlay the measurement with the effectiveness of their spend, it’s important to put that data to use and focus strategies on actively reducing the amount of carbon in the programmatic digital supply chain. And here’s why:
Carbon offsets aren’t a workable alternative
Offsetting emissions may help mitigate some of the impact in the short term, but it doesn’t solve the long-term environmental problem; it just kicks it down the curb. Similarly, from a corporate ESG perspective it lacks the kind of pro-activity boards and investors want to see happen. Not to mention the fact that navigating compensation is difficult on your own so third party (and often expensive) external advice is required.
Instead, when we think about future-proofing the systems and processes we use in programmatic, reduction should always be the priority – particularly as it is now possible to identify “Climate Risk” websites based on their extremely high levels of carbon emissions (emissions typically more than twice the industry average). In fact, if five of the largest markets in digital advertising industry eliminated spending on these sites, they could save 33.5K mt of CO2e each month (the equivalent to 3,449 road trips around planet earth).
Carbon reduction doesn’t mean result reduction
It’s a misnomer to associate decarbonising digital advertising with reduced advertising effectiveness. With the ability to measure carbon, it’s possible to overlay emissions data with metrics that determine the effectiveness of campaign spend, and make informed decisions to reduce carbon where the ad spend is adding zero (or highly minimal) value. In other words, we can eliminate a lot of the waste that exists in the ecosystem today.
This means things like eliminating made for advertising sites, non-viewable ads or publishers that have more than 200 ad tech partners. A recent study published by Scope3 and Ebiquity, which analysed $375 million of digital ad spend, found that 15.3 percent of its advertising spend was wasted on inventory that generated no value for businesses and generated excessive amounts of emissions.
If we change the way trillions of programmatic auctions are configured, it’s possible to dramatically reduce the energy consumption of the process. This not only improves transparency and risk for brands and advertisers, but will increase the proportion of spend in working media, without adverse revenue impact for publishers. A win-win-win for the planet and each side of the media equation.
Small creative changes aren’t the answer
One common myth I’ve been hearing a lot is that making small tweaks to creativity, such as using dark mode or mono, can significantly reduce carbon emissions. While using dark mode or mono may have some impact, it is not a solution that addresses the root cause of the problem.
The truth is that most emissions come from the supply chain, not the creative itself. Our research found that creative distribution contributed just 8.9 percent of carbon emissions in ad impressions, whilst ad selection (programmatic advertising’s crowded supply chain) generates 60.7 percent. This must be the focus of efforts in Australia. Not least as our research found that ad impressions in Australia are on average the second highest emitter of carbon out of the five countries studied – second only to Germany and ahead of Great Britain, France, and the USA.
The good news is that brands are beginning to see that it is possible to reduce carbon emissions without impacting performance. Globally, we have run five pilot carbon reduction programs with World Federation of Advertisers Planet Pledge members Reckitt, Sanofi, Diageo, Mastercard and Philips, as well as a pilot of Audi with PHD and Adform. Every single pilot demonstrated significant carbon reduction with no negative performance or reach implications.
I’m hopeful that as more brands, agencies and publishers realise it is good for business to be green we’ll find ourselves in a virtuous circle where the greener you are, the more money you make.