Media Briefing: Sustainability standards are coming for digital advertising

This Media Briefing covers the latest in media trends for Digiday+ members and is distributed over email every Thursday at 10 a.m. ET. More from the series →

This week’s Media Briefing takes a look at the Global Media Sustainability Framework that the Global Alliance for Responsible Media (GARM) and Ad Net Zero are in the process of creating to measure and report carbon emissions produced from digital advertising.

  • Sustainability standards
  • Senate holds meeting on oversight of generative AI in journalism
  • The Messenger is in financial turmoil, Puck has a new CEO and more

Sustainability standards

A lack of standards for measuring carbon emissions in the digital advertising industry has prevented sustainability from becoming a deciding factor for how ad budgets are executed, despite the fact that questions around carbon footprints have popped up on request for proposals (RFPs) for the better part of last year.  

Sustainability standards are on their way, however. The Global Alliance for Responsible Media (GARM) and Ad Net Zero created a number of working groups in October that are tasked with building the Global Media Sustainability Framework. The full set of guidelines are due to be published in time for the Cannes Lions Festival this June, though solutions will be distributed on a rolling basis between now and then as they are completed, according to Rob Rakowitz, initiative lead for GARM.

In addition to providing the standards for how carbon emissions will be measured, it will also provide guidance for increasing transparency and disclosure around companies’ carbon emissions data, Rakowitz added. 

One of the working groups is focused on metrics and methodology, and is tasked with simplifying some of the more nitty gritty details such as: 

  1. What are the guidelines for the bounds of measurement?
  2. What is the right metric for measuring carbon emissions? 
  3. What is the right methodology for measuring carbon emissions? 
  4. Is there a voluntary formula that can be shared with advertisers, marketers and media companies to determine a baseline for carbon emissions in their businesses? 

The standards that are being produced would be completely voluntary for companies to implement and follow. Nonetheless it was clear that some sort of officially developed standard was necessary after some prodding into the current state of carbon emission measurement in the digital advertising industry, Rakowitz said. 

The imperfect, non-standard status quo

In August 2023, GARM and Ad Net Zero sent out a questionnaire that surveyed how carbon emissions are currently being measured from various parties in the advertising industry. Rakowitz’s team learned that the same ad’s carbon emissions were measured by three different firms, and each reported a different result. The emissions reported had a difference of six fold.

“It’s not a viable mode for an industry to operate with … if we’re dealing in imperfect data, then we’ve got an issue,” said Rakowitz. “There’s been a lot of really good work that’s been done in the marketplace [to reduce carbon emissions thus far], but a lot of it is either market- and/or channel-specific … Given the levels of fragmentation, that’s actually a real issue for the industry, especially if the more advanced folks are looking to make media plan-and-buy choices with imperfect data.”

The idea is that, while these standards for sustainability are voluntary to adopt, eventually enough interested parties, including those on the buy-side, will incorporate the measurements standards as they have adopted GARM’s Brand Safety Floor and Suitability Framework. 

“We’re thinking about this at sort of the same level that you would look at audience measurement and viewability and brand safety and stuff like that. And making sure that there’s an industry-wide spec for measurement,” said Rakowitz.

Transparency is key

In addition to how carbon emissions will be measured, the framework will advocate for transparency in carbon emission reporting, which many players in the media and advertising industries have echoed as being necessary for making progress in reducing digital advertising’s carbon footprint holistically. 

“We need a common currency. We need a common language. And we really need a standardized methodology,” said Harvin Gupta, head of commercial partnerships at carbon emissions measurement firm Scope3, which has built a business around helping companies measure the carbon footprint of their digital advertising business since launching in 2022. “Our methodology is fully open-sourced so hopefully that drives the trust and transparency that’s needed,” he said. 

Particularly once the standards have been published, transparency in how sustainability measurement vendors like Scope3 operate will be critical. And largely that’s because once money is being transacted based on the sustainability data, buyers are going to want verification of that data through third-party entities. 

Audits and accreditation 

Once the standards are released, “it’s not going to be by any stretch of the imagination ‘mission accomplished,’” Rakowitz said. Checking the homework of companies via verifiable audits will be critical for making sure that the data sets are being used correctly, as well as weeding out any nefarious activity like greenwashing. 

Thankfully, enterprise sustainability audits have been around for quite a long time, according to Wescott, though only recently have been discovered by the advertising sector. 

Auditing firms like Klynveld Peat Marwick Goerdeler (KPMG) and Ernst & Young (EY) have been monitoring the sustainability reports for companies’ physical operations for decades. For some companies, marketing can be the single largest contributor of greenhouse gasses but has historically flown under these audits’ radar.

Rakowitz said that a working group for audit verification has also been established as part of the effort to incorporate the insights from the large accounting firms and media auditors like the Media Rating Council (MRC) or Alliance for Audited Media (AAM), making sure that the right pieces of the equation are being double checked. 

“Every company should be going through a sustainability audit in general, much like we’d expect them to go through an accounting audit. And then if they’re involved in media selling, they should go through a media sustainability-specific audit to make sure that the numbers that they are attributing to media activities is accurate,” Rakowitz said. 

And even that level might need to take place after every campaign so buyers and sellers can get an accurate picture of how much carbon is created, especially if budgets become dependent on that data set. 

The added step of working with sustainability auditors will likely introduce new costs and what that will do to the pricing of an ad campaign is up in the air, as well as who will be responsible for footing the bill. Ultimately, it could even influence adoption of these sustainability standards. 

So what does that mean for the timeline of turning sustainability from a vague concept into a transactional measurement tool? It’s hard to really say. Rakowitz said that with the standards, companies are likely going to be focused on benchmarking their ad businesses’ carbon footprints in 2024. Come 2025, however, that’s “probably where you would start to see a good portion of the industry start to make strides in terms of reductions.”

What we’ve heard

“I’m a little weary … about the volatility. Maybe I’m past worry, I just maybe I’m just expecting it now. [But] we’re geared and aligned to be prepared if that carries on. I feel really good about what we’re doing. Don’t take any client for granted. Be very thoughtful and listen. Bring more to bear.”

Christine Cook, CRO of Bloomberg Media on the latest episode of the Digiday Podcast 

Senate holds meeting on oversight of generative AI in journalism

Media executives and academics debated the need for government oversight of generative artificial intelligence technology in journalism during a Senate Judiciary subcommittee hearing held on Wednesday afternoon.

Condé Nast CEO Roger Lynch, News Alliance CEO and president Danielle Coffey, CUNY Graduate School of Journalism professor Jeff Jarvis and National Association of Broadcasters CEO and president Curtis LeGeyt gave their testimonies during the hearing. Senator Richard Blumenthal was chair of the meeting, while Senators Josh Hawley, Amy Klobuchar, Marsha Blackburn and Mzie Hirono, among others, asked questions.

But not all of those sitting before the subcommittee agreed with each other.

Here are four key takeaways from the nearly two-hour meeting:

Generative AI threatens a struggling media landscape

Senators and witnesses alike outlined the media industry’s struggles, from declining revenue to the rise of disinformation, and most argued that the rise of generative AI would only exacerbate these problems.

Blumenthal blamed big tech companies like Meta, Google and OpenAI for using newspapers and authors’ content to train their AI models “without compensation or credit,” and competing with news orgs for readership and revenue.

“We need to learn from the mistakes of that failure to oversee social media and adopt standards,” Blumenthal said.

Blumethal and Hawley have proposed a framework on AI legislation, which, in part, calls for the need for transparency and financial and public credit when using copyrighted content.

Not covered by fair use

Lynch said Congress needs to clarify that the use of publishers’ content for training and for the output of generative AI models is not fair use.

He argued that the copyright law is designed to allow for criticism, parody, research and news reporting, but not “when there is an adverse effect on the market for the copyrighted material.”

“Fair use is not intended to simply enrich technology companies that prefer not to pay,” Lynch said. 

Licensing deals are needed

Lynch cited the success of “private negotiations” in film and TV, sports and music industries to sign licensing deals and get compensated for content. Both he and Coffey agreed that this was the only fair path forward and that many media companies would go out of business otherwise. OpenAI has signed deals with the Associated Press and Axel Springer.

Limiting gen AI technology limits freedom 

Jarvis took another position entirely. He made the argument that restricting generative AI’s ability to “crawl” the internet would fence off people’s access to information, as well as journalists’ ability to use each other’s work for their own reporting. Jarvis said he was “disturbed to learn” that The New York Times’ lawsuit asked OpenAI to erase the history of its content from its models, which he argued is “available for free” (though the Times does have a paywall). 

“Instead of debating protectionist legislation sought by lobbyists for a struggling industry, I hope we also have a discussion about journalism’s moral obligation to an informed democracy,” Jarvis said. “Please base decisions that affect internet rights on rational proof of harms, not media’s moral panic.”

Senator Blumenthal did not seem to agree.

“There is no free lunch here,” Blumenthal said. “The content doesn’t appear by magic.” – Sara Guaglione

Numbers to know

$1 million – $5 million: The amount of money that OpenAI is offering publishers per year to license their news articles for use in training its large language models.

2.5: The number of years that Kevin Merida served as executive editor of The Los Angeles Times before announcing that he is stepping down this week. 

19%: The average price increase over the past year of digital news subscriptions in the U.K.

What we’ve covered

CES Briefing – Publisher sales teams head to CES to get a ‘vibe check’ on the 2024 ad market: 

  • In a persistently uncertain ad market, publisher sales leads are hoping that CES will provide them the opportunity to learn directly from marketers and agency execs about what will convince them to spend their ad budgets in the new year. 
  • Ultimately, the goal is to turn the investment of sending a sales team all the way out to Las Vegas into revenue via third- and fourth-quarter deals generated from the four days’ worth of in-person schmoozing. 

Learn how media sales teams are approaching the sales opportunity that CES affords here

CES 2024 kicks off with the rapidly expanding impact of AI on media and marketing front and center:

  • While CES 2024 will have dozens of sessions related to AI, there are also plenty of AI talks specifically about marketing, social media and entertainment.
  • Beyond all the new tech debuting during CES, companies also plan to spend 2024 thinking more about AI governance, including ways to audit data and AI systems.

Read more about CES’s top themes for AI in media and marketing here.

Group Black plans to launch first-party data platform for Black and Hispanic audiences in Q3 2024:

  • Group Black is launching a new audience and insights data offering in the third quarter of 2024 that aims to provide advertisers with the ability to better target Black and Hispanic consumers.
  • The offering will aggregate first-party data from 10-15 diverse-owned companies across health and beauty, travel and finance sectors, said Bonin Bough, co-founder of Group Black. 

Learn more about the new offering here.

Publishers likely to depend on subscriptions less as they explore alternative revenue streams in 2024

  • A new Digiday+ Research based on a survey of 355 publisher professionals, subscriptions will overall account for a smaller portion of media companies’ revenues in 2024.
  • What’s more, the percentage of publishers who said they make a lot of money from subscriptions has been trending downward.

See how publishers are viewing subscription revenue in 2024 here.

How media execs are bracing for another year of ad turmoil while finding the bright spots:

  • Media execs are setting their ad revenue goals for 2024 with an abundance of caution.
  • The heads of Bloomberg, The Atlantic, The Independent, The Wall Street Journal, Time and Vox Media all are banking on the categories and content types that are showing more promise than others.

Hear from media leaders about how they’re strategizing for the 2024 ad market here.

What we’re reading

The Messenger needs to raise money after generating only $3 million in its first full year:

The New York Times reported that news startup The Messenger was off its $100 million revenue target for 2024 by about $97 million, leaving the company in dire straits for a cash infusion. Axios also reported that the company is looking to raise $20 million to weather the storm, and one proposal for $30 million in exchange for a 51% stake made by a group of conservative media and business executives values The Messenger at $60 million.

Substack is purging its platform of Nazi publications:

A few months back, several Substack accounts were found to be publishing pro-Nazi ideologies. Now, Platformer reported that the newsletter platform will be removing many of those accounts, though it is not changing its content policy. 

Fox Corp embraces the blockchain to negotiate with AI companies: 

Fox Corp debuted a new blockchain platform, Verify, that will help media companies track the use of their content across the internet. The new tool will also be used to negotiate licensing deals between AI companies and publishers, Axios reported. 

Puck taps former Twitter exec Sarah Personette as its new CEO:

The Wall Street Journal reported that news start-up Puck has hired Personette as its new CEO. Personette previously served as the chief customer officer at Twitter. The two-year-old media company generated $10 million in revenue in 2023 and has 40,000 paying subscribers.

https://digiday.com/?p=531328

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