CO2 emissions and climate change: Subjects typically reserved for discussions among the world’s politicians, environmentalist groups, the scientific community, non-governmental organizations, and multinational conglomerates. But are they relevant to the digital advertising industry? You bet—and more than that, they present an opportunity for marketers.
Many of the world’s largest brands are working to tout their green credentials and communicate their milestones—successes like innovating packaging to reduce waste or optimizing their supply chain to become net zero. But what about the environmental impact of serving ads highlighting those efforts throughout the online ecosystem? The carbon cost involved in that process is meaningful, and it has often been overlooked…until now.
Indeed, two drivers have nudged this issue into the marketing spotlight:
- Stakeholders including consumers, investors, and employees increasingly want to see brands do more around sustainability and safeguarding the future of our planet.
- Taking a climate-friendly approach that decreases the carbon footprint of digital campaigns can prove to be a smart business decision that leads to cost savings and improved performance outcomes.
In other words, brands willing to tackle the issue head-on stand to gain a more positive brand perception and higher ROI on ad spend. Like nearly every facet of society, digital advertisers have a role to play in decarbonizing the economy to meet the goals outlined in the Paris Agreement, and there are great rewards available to marketing organizations that tap into growing green value pools and actively participate in the sustainability movement.
Explaining digital advertising’s carbon footprint
A seminal environmental impact assessment review of online advertising estimated that in 2016, one-tenth of all emissions emanating from the internet—between 20.38 to 282.75 terawatt-hours (TWh) of energy—were attributable to online advertising. That was seven years ago! In the time since then, digital advertising has exploded and evolved, then exploded and evolved some more—and all the while siphoning dollars away from traditional offline media (radio, print, and TV).
Of course, it’s difficult to grasp whether that percentage share has increased on an annual basis up to now—especially considering the emergence of other data-hungry internet-related systems like cryptocurrency, non-fungible tokens (NFTs), and generative AI—but it would be difficult to argue that the total energy usage of digital advertising hasn’t grown considerably. Of the $370+ billion US marketers are forecast to spend on advertising this year, a shade under three-quarters of that (74.6%) will go to digital channels, up from just 37.6% back in 2016. And there are no signs of this trend slowing down anytime soon, with that share projected to continue climbing every year through at least 2027, indicating the industry’s carbon footprint is only likely to keep increasing.
According to Good-Loop’s online carbon calculator, a sample ad campaign comprised of a 100-megabyte video file that delivers 100,000 impressions in the UK equates to around 5.4 tons of carbon. For a little perspective, that’s the same as driving over 13,000 miles in an average gasoline-powered passenger vehicle. Sum all the millions of digital activations that brands are collectively running at any given time and the energy and emissions implications become clear.
At question here is the mechanism by which ads are delivered to audiences, particularly as it pertains to programmatic buying. In the nanoseconds it takes for an ad to load on a webpage, a plethora of technology companies (such as ad agencies, data-management platforms, data clean rooms, ad exchanges, ad servers, ad verification firms, demand-side platforms (DSPs), supply-side platforms (SSPs), and brand-safety vendors) take part in a bidding process to win the auction that puts the ad in front of the consumer. In the process, thousands of servers are springing into action, requiring electricity to realize each ad call.
In essence, there is a significant amount of computing firepower at the heart of digital advertising, and as the landscape expands and grows more complex and fragmented, leaders must take urgent steps to first curb, then reduce, the carbon cost of its operational infrastructure.
Consumers are paying close attention
Consumers today care about more than just the products and services a business creates and provides—they increasingly want to see actions that demonstrate strong societal and cultural values. Brand purpose is emerging as a key decision criterion, and consumers across the generational spectrum are putting environmental impact at its center:
- Sixty-two percent of consumers state that sustainability has become more important to them over the past three years.
- Seventy-three percent say they are tired of brands acting like they are exempt from environmental responsibility.
- Forty-six percent report that they are looking to brands to take the lead on creating sustainable change.
- Sixty-two percent say they are actively seeking out brands that are sustainable in their business practices.
Of course, what’s top of mind for consumers must be top of mind for brands. After facing a digital transformation imperative in the wake of the pandemic, marketing organizations are now dealing with a sustainability transformation imperative. To ignore it is to risk reputational fallout…and to miss a seriously
golden green opportunity.
A climate friendly approach is good for business
Now here’s the interesting thing: Becoming a more climate friendly brand doesn’t have to mean spending more money—in fact, the opposite is true. By making small tweaks to campaign KPIs and optimizing the digital supply path, marketers can start to minimize their carbon emissions in a way that is also beneficial for overall campaign performance. What’s the saying? Two birds, one stone? Let’s explore:
Focus on attention metrics
Attention metrics are on the rise: A trend fueled by the idea that the old proxies for performance—the likes of viewability, reach, and frequency—are no longer optimal since they fail to provide an accurate measure as to whether target consumers actually see ads. Attention data technology works by filling that knowledge gap, providing more definitive insights into how audiences engage with a brand’s content on specific domains.
How does this relate to cutting carbon costs, you may ask?
One study found that by removing impressions that receive less than 0.5 seconds attention time, brands can reduce total emissions by 53% while increasing the average attention time per impression by nearly 40%. Or, to put it another way: advertisers that pull spend from publishers they know are offering little-to-no bang for their buck can weed out wasted spend and lower their carbon footprint in the process. Win-win.
Streamline your supply path
Remember all those technology companies involved in the programmatic bidding process? Momentum is building toward a more streamlined—and, therefore, more efficient—network. Eliminating redundant auctions for the same inventory and optimizing the flow of data not only makes sense from a business perspective, but also reduces the amount of computing power needed to run the overall ad ecosystem. It also cuts costs by opting out of relationships that don’t provide value as part of this sea change and opting in to relationships that simplify the digital campaign workflow (be that centralizing planning processes, consolidating reporting, or reconciling financial data). And side note: With new data privacy laws coming into play requiring a more detailed understanding of who has access to consumer data throughout the bid stream, there has never been a better time to conduct a partner review. Win-win-win.
The need for environmental education
So, the carbon footprint of digital advertising is growing, consumers are invested in it, and incorporating climate friendly initiatives into larger business goals turns out to be not just a moral imperative but also a financial one.
What’s the hold-up, then, when it comes to greater action across the industry?
It boils down to these reasons: A lack of standardization, a lack of regulation, a lack of urgency, and a lack of education. Marketers are many things—creative thinkers, performance forecasters, data analysts, investigative journalists, and idea generators, to name a handful—but they are not climate experts. Only 24% of marketers say their company has set targets to address the carbon cost of online ad campaigns, and a negligible number say they have already reached net zero. Clearly, there is ample room for progress. But until the industry collectively garners a greater understanding of the issues at hand and agrees on common measurement methodologies, change will likely continue at a glacial pace.
Fortunately, though, help is on the way in the form of new tools and initiatives:
- New entrants and holding companies have built an assortment of carbon calculators to help advertisers quantify their carbon emissions and factor them into business decisions.
- The Interactive Advertising Bureau (IAB) Tech Lab has set up the Green Supply Path project designed to create best practices around cleaning up the programmatic supply chain.
- Industry-wide collective Ad Net Zero is developing a data framework to measure, and subsequently address, digital advertising’s contribution to climate change.
Then there are the stories of big brands already making proactive moves:
- Toyota is leveraging an adaptive video streaming solution to pare down the load times of its digital ads and thereby reduce data usage.
- HP is in the process of building a sustainable impact strategy by removing technological middlemen to minimize the amount of data it exchanges between platforms.
- Chanel has added sustainability metrics as a core campaign measurement as it looks to incorporate ad buying decisions into the company’s larger sustainability goals.
Without many global benchmarks and standards for marketers to follow, it is these stories and these actions that are sparking the conversation. More are bound to follow as the benefits of adopting sustainable digital practices come increasingly into view. Could 2023 be the tipping point? Only time will tell.
Digital Advertising’s Carbon Footprint—Wrapping Up
Advertisers and consumers alike are waking up to the carbon cost of digital advertising. Brands are facing myriad challenges in 2023 (most notably planning for the cookieless future and keeping up with all the latest regulations), but sustainability shouldn’t be deprioritized in planning discussions. As marketers start or continue their journey to become more sustainable, it’s important to focus on efficiency as a route to achieving success, and embracing greener digital ad buying efforts and shoring up the supply path are great places to begin. Those that do so now can gain the early mover advantage and set themselves up to foster greater brand loyalty and cost savings down the road.
Looking for more tips to kickstart your sustainability transformation? Check out our blog post that dives into all the do’s and don’ts for digital marketers when it comes to climate change and sustainability advertising.