Anne Coghlan, Co-Founder and Head of Product at Scope3, looks at how the industry can measure, report and offset their carbon emissions from digital initiatives and move the whole advertising industry closer to achieving net-zero carbon emissions goals.
Today, the digital advertising economy is based on a model where, for publishers, more ads generate more money. The desire to realise even a negligible increase in yield has created an insatiable appetite for new technologies and systems that are incredibly inefficient, wasteful, and ultimately produce vast quantities of carbon emissions that are harming our planet. Meanwhile, advertising spending continues to reach new heights.
Marketers spent $500 billion on advertising last year, with nearly three quarters of this going towards digital ads. Often lost on this story of growth innovation is the mounting consequences for the environment when, ultimately, this is needs to remain front and centre of conversations.
The digital supply chain
While it was once commonly believed that emissions were only a “real world” problem, it turns out that media, advertising and marketing technologies demand an ever-growing supply of computing power. The ad industry’s growing carbon output stems from systemic issues embedded in complex supply chains. A single programmatic digital advertising campaign can buy across hundreds – maybe thousands – of domains.
Within each domain, publishers make technology-based decisions in order to maximise their revenue. For example, the homepage of your favourite news website will have multiple ad slots, and each one will be making lots of requests to their network of demand partners – which can sometimes be as much as 30 or 40. The number of requests made between brands, publishers and SSPs (supply side platforms) can be enormous, and each one is channelled through a data centre.
With data centres being plugged into the electricity grid, a small amount of carbon is produced each time. Roll that out across each domain and it’s very easy to see how quickly the numbers can multiply. This is in addition to the data centre use (and therefore, emissions) derived from the actual delivery of the ads. Furthermore, the impact of digital ads on web experiences is now more widely recognised.
If you visit a website and it takes ages to load, it’s often because of large amounts of ad-tech being used – such as making multiple redundant calls, tags being included, and calls being made even when an ad won’t show.
Naturally, this means the domain is producing a high quantity of emissions. Coming to terms with the challenge For the industry to change, first players need to recognise the problem, meaning brands, publishers and SSPs need to act in the knowledge that there is a tangible carbon footprint associated with digital advertising.
Digital does not mean clean
Data centres are the factories of the 21st century, and until the industry recognises this, progress will be far too gradual. We understand the hidden truth behind sustainability in digital advertising, we now need to outsmart it. However, it can be hard for organisations to get started. The first few steps revolve around measurement, working out the total emissions of their digital ad campaigns.
It’s daunting to be confronted with a number that quantifies your carbon emissions. However, by taking the time to recognise and fully appreciate the business benefit of action, brands will quickly see the value of facing up to this reality; especially when there’s financial incentives on offer. Some of the key factors to consider when taking those first measurements are: where the ads are served, in which country, on what day, and on what device.
Each component has a specific impact on the total figure. For example, different countries use different energy sources. So, as France is more dependent on nuclear, its output will be relatively low compared to some areas of the US that rely solely on coal.
Empowered by knowledge, businesses can join the movement for change and help drive the advertising industry closer to achieving a net zero future.
Driving green media
The next challenge is making it worthwhile for businesses. Incentivisation is key. The rise of Green Media Products is helping organisations measure emissions and manage the workflow of tracking and reporting on associated carbon removal products. Product sellers then compensate for the cost of emitted carbon to high-quality removal projects.
Encouraging the industry to incentivise organisations towards cleaning up their supply chain with offer of business returns is a strong step forward. And the benefits are clear for each party. The true intention behind pricing carbon is to get publishers and sales teams recognising the need to reduce emissions, and how offering green media solutions is a way to boost revenue.
There is a clear business advantage in playing into what the economy is searching for. For brands and agencies, it allows them to shift spend to green media – adding a green premium to their bids – to allow for greater opportunities to boost revenue, and make decisions in line with the values they’re promoting across channels. Establishing an industry-wide language and a standard ‘cost of carbon’ will bring digital advertising together as an industry in the drive towards a sustainable future.
Educating each accountable party within the digital advertising ecosystem on their role in reducing carbon emissions is critical. The key point to remember about supply chains is that every segment is connected. And each section has its own set of responsibilities. For consumers, there are obviously some decisions that are beyond their control.
When it comes to buying a pair of shoes, the process from manufacture to sale is extensive, and includes making the shoes, delivering the product to the shop, displaying digital advertisements, and finally the consumer either visiting the store or ordering the shoes online.
Out of that entire chain, the consumer has very little impact on reducing carbon emissions, aside from choosing to source products from sustainable businesses. It's therefore important to help each part of the supply chain recognise their direct responsibilities – and realise that there is a true business benefit to going green.
By Anne Coghlan
Co-Founder and Head of Product