Ad industry prepares for ‘tipping point’ this year in sustainability

“This is happening more now because a lot of companies have net zero ambitions but in order to meet those goals they need to get data back from their supply chains, including advertising,” said Eric Shih chief operating officer of Cedara, a software-as-a-service provider that marketers employ to measure the carbon emissions of their media supply chains.

Obtaining that data is difficult enough in an industry that already measures its carbon emissions, let alone one that doesn’t and lacks the unified standards to even try. But it’s nigh on possible when marketers often find that looking at their online advertising supply chain is like peering through a keyhole, making it even tougher to get a clear picture.

Faced with these issues, marketers have had to rely on estimates to gauge their advertising emissions. That’s fine for short-term fixes, but estimates aren’t the concrete metrics needed for genuine accountability and progress.

As Shih explained: “It’s as if someone tried to count the number of offices on the inside of a building by counting the number of windows on the outside of it: it’s highly inaccurate.”

The more accurate approach, to Shih, is looking at the floor plan. It’s only then, he continued, that changes can be made or — as it is in the case of marketers — organizations can make the necessary reductions to carbon emissions.

This is exactly what Sanofi’s head of media said at the turn of the year when he outlined the company’s own approach to sniffing out just how green its advertising really is. As other advertisers grapple with this too, they’re turning to companies like Cedara, SeenThis, Multilocal and others for help.

“As brands continue to advance their sustainability missions, they’re including this type of measurement in their briefs,” said Joseph Worswick, vp of buyer development and head of sustainability at OpenX, which claimed stakes to being the first net-zero ad tech company last year.

More often than not, these briefs tend to involve some tough questions. They push for breakdowns of the total impressions firms oversee, which includes unraveling all their bidstream activity by various factors like creative, device and location. Looking beyond ads, marketers are also asking ad tech vendors like OpenX about their own emissions, questioning things like the energy consumption it burns through to operate its data centers and electricity needed to facilitate ad campaigns.

From here, marketers can start to zero in on how much carbon an ad impression emits. And the more they’re able to do this across all of their programmatic supply chain, the easier it will be for them to set up the benchmarks needed to make the necessary reductions to their emissions.

“It’s correct to say that the industry is shifting from measurement of campaigns to measurement of vendors in the entire media supply chain (including programmatic),” said Steven Filler, country manager of the U.K. for video platform ShowHeroes.

What those doing this seem to have concluded at similar times is this: Audience targeting is not only a regretful strategy to get advertising results when it is overused, but it also generates needless carbon waste. Just like a trader looks at time of day, day of week, website, ad size, audience, bidding and the like, sustainability will be another optimization lever.

Of course, there’s still a long way to go until then. Even so, it’s not hard to imagine a time when sustainability starts playing a critical role in how marketers buy their ads and from whom. In fact, focusing on sustainability could even help address some of programmatic advertising’s most persistent challenges.

Consider the issue of bid duplication, which not only warps competition but also wastes energy and undermines auction integrity. Armed with the right insights, advertisers might prefer programmatic marketplaces that enforce a one-placement-one-bid rule, streamlining both open market and deals trading.

The same goes for the tangled web of resellers, resulting from ad tech vendors buying and selling ad inventory amongst themselves, which complicates the supply chain. A push toward sustainability could encourage marketers to circumvent these vendors and seek out a more direct route — from publisher to exchange to demand-side platform (DSP).

Then there’s the pressing matter of sites created specifically for advertising, which are notorious for their high carbon output, emitting 26% more carbon than their reputable counterparts. As the industry grows more conscious of its environmental impact, the push for sustainability could offer yet another incentive for marketers to distance themselves from these energy-intensive practices.

TrustX, a company selling advertising space, believes this too. It runs private marketplaces for ads that don’t have as much of this carbon-heavy advertising, making them about 50% more environmentally friendly than other large supply-side platforms, as audited by Scope3.

Other companies are also starting to promote their eco-friendly efforts lately.

Look at contextual ad business Pixability, for instance. It’s working with Cedara to give advertisers a way to measure the carbon emissions of their ad campaigns on YouTube and make the adjustments to spending if necessary. Some of those advertisers already appear to be reaping the benefits, including Epson.

Campaigns conducted by the tech company, in conjunction with both firms from last September to this January, not only achieved high visibility — with ads having the potential to be seen 230 million times on YouTube — but also significantly boosted traffic to Epson’s website from the video platform by 60% during the period.

More importantly, these campaigns were designed with the environment in mind. By opting for shorter advertisements over longer ones, the environmental impact was drastically reduced, making these ads four times less detrimental to the environment, as assessed by Cedara. It found that the shortest ads, called bumper ads, were the most eco-friendly, producing very little carbon dioxide for each view. 

“The energy intensity of media buying online is quite dramatic so we’ve decided to focus on that as an agency,” said Celine Craipeau, vp of sustainability at digital agency JellyFish. “We want to be in a position over the next six years or so where we’re able to deliver a carbon budget for every client project we deliver and have a larger share of our creative production to be done around sustainable projects.”

This shift in focus is the result of a broader one from companies that are reevaluating how to achieve their corporate sustainability goals. 

For the marketers at those businesses, they’ve been moved into different parts of their respective teams as their leaders try to take a more pragmatic view of the task in hand, as reported by Business Insider earlier this year.

This doesn’t mean they’re backing away from any prior commitments. It’s more like they’ve realized the path to net zero is by no means assured.

“2024 is going to be a tipping point for sustainability in advertising, as increasing numbers of brands, agencies and publishers push their vendors to demonstrate how they can guarantee sustainability at every stage of the media supply chain,” said Filler.