The stalemate of sustainability: Who holds the responsibility of cutting carbon from digital ads?

As Earth Day 2024 is marked today, finger pointing is still prevailing over taking action in the effort to make digital advertising more sustainable. 

Publishers say there is only so much supply path optimization they can do before it impacts their revenue. Meanwhile advertisers and brands say they can only shift budgets so far towards greener media until the data exists to prove lower-carbon campaigns perform just as well as traditional campaigns. And DSPs are held to the KPIs that their clients are demanding, though some are working to push dollars into greener avenues. 

What results is a stalemate of sorts, waiting for someone to jump first and take the blow so that the rest of the digital advertising industry can follow when a revenue hit is no longer a risk. 

The hope is that once the Global Alliance for Responsible Media (GARM) releases its standards for sustainability measurement in the advertising industry during the Cannes Lions festival this June, stagnation will dissipate and advertising budgets will finally be directed towards green inventory. 

But there are tools that exist today for advertisers to buy sustainably and for sellers to promote their more carbon efficient inventory, so some argue that there are other factors at play for delaying action around sustainability besides not having universal measurement guidelines. 

‘It’s an enforcement problem’

Hillary Slattery, director of programmatic at IAB Tech Lab, called out the lack of action on the buy-side to financially support sustainable advertising during a panel on sustainability standards at Sharethrough’s Green Media Summit earlier this month. She said the onus is on media buyers to start actually directing their clients’ budgets towards greener inventory, otherwise sustainability efforts will remain stagnant. 

“We’ve been talking about supply path optimization for how many years now? This is not a signal problem, this is an enforcement problem. There are tools that exist in the ecosystem to help media buyers understand what it is that they’re getting,” said Slattery, pointing to green PMPs that Sharethrough, Magnite and other SSPs have developed and rolled out in the past year. 

For example, Greenbids’ predictive modeling tool only calls the relevant SSPs for each impression, eliminating irrelevant ad calls, and the company’s co-founder and CEO Guillaume Grimbert told Digiday that clients using this ad tech stack plug-in have reduced carbon emissions by 30% while still achieving the same campaign performance. 

“Stop fighting amongst yourselves, stop yelling at me and get to work,” Slattery said during the Green Media Summit. 

Revenue risk

After being financially incentivized for years to practice bid duplication, publishers are now being told to take their finger off the only lever they’ve had to control pressure in the programmatic auction.   

Mediavine has 25 SSP partners, but cutting below that threshold runs a direct risk to the ad management company that works with thousands of publishers, said Julia Li, director of social impact and sustainability. 

While there are low hanging fruit strategies Li’s team is practicing to reduce the company’s emissions – like lazy loading, only sending a single ad request for multi-size ad inventory and not using resellers – the biggest thing publishers will be able to do to eliminate carbon from their end is reduce the number of SSP partners they use. 

“There’s no incentive for publishers to act in that way right now, unless we want to be masochistic and harm our own revenue. As long as there is this volume bias on the DSP-side, there is always going to be auction duplication on the publisher side,” Li told Digiday.   

And while buy-side is pushing publishers to continue supply path optimization and trimming the fat from the bidstream, Li said the sell-side is also demanding the buy-side to stop sending such heavy ad creative files. However, until both sides can accurately measure and quantify carbon emissions from each of those reduction actions, it’ll be too difficult to get either side to take responsibility and subsequent action.  

“What you get is a bit of this phenomenon of finger pointing, because no one wants to be the first one to take that step and truthfully none of us really know [who should take that step],” said Li. 

Slow adoption 

The DSPs can only move away from volume bias when their clients are willing to optimize away from the cheap, carbon heavy ads they’ve grown accustomed to. 

“From an adoption standpoint, it varies largely by client, and it’s a prioritization issue,” said Ariel Dietz, vp of enterprise partnerships at Nexxen during a DSP session at the Green Media Summit. 

Not to mention that there isn’t a standard for measuring the carbon footprint of a media campaign yet, making it harder to get hesitant clients to commit to prioritize green campaigns, especially if they don’t have the regulatory pressure to reduce their business emissions.

“Frankly we haven’t quite gotten to that level of discussion with all of our clients. There’s been a lot of interest [and] initial capabilities assessments, but ultimately, the adoption of green media products hasn’t been quite as high,” said Chandra Cirulnick, vp of global supply partnerships at Yahoo, during the same panel at the Green Media Summit. What there has been more adoption of is SPO, she added. 

Luckily for the sustainability advocates, a lot of the SPO initiatives, as well as cutting out made-for-arbitrage (MFA) inventory, that clients are interested in have a trickle down effect that leads to carbon reduction. 

“Naturally, as we begin to question MFAs … and we start to look at supply path optimization, it’s organically improving what those bottom line metrics and results look like for our clients … [The] quality of supply concern is naturally bleeding into what we’re doing with sustainability as a marketplace,” said Dietz. 

For DSP Viant, about 10% of ad spend that goes through its platform is to its carbon offset program, according to John LoPresto, director of brand marketing, who also spoke during the Green Media Summit. He said that his team is pushing to continue education on sustainability to clients to increase that number. 

However, “what’s prioritized is what actually gets measured and what gets done. And [sustainability] might be a priority for the agency, but once it gets to the client, not so much,” said LoPresto.

Regulation pressure will turn tides 

According to agency execs, there’s been some collaboration amongst themselves to make sure that they’re asking the same set of questions in requests for information (RFIs) that they send to the sell-side once brands do declare a need to advertise sustainably. 

The Corporate Sustainability Reporting Directive (CSRD), which will take effect in the EU next year, is expected to crank up the prioritization of sustainability measurement for the ad campaigns of European brands. This means that agencies – even if they’re not directly impacted by the legislation – will have to be able to provide the measurements their clients need. 

“CSRD is going to force our hand on this … That’s why we set the standard RFI questions and when we are forced to measure and report, the immediate next question is going to be ‘Well, why is that number so big?’” said Martin Bryan, global chief sustainability officer at IPG Mediabrands, during the Green Media Summit.

https://digiday.com/?p=541974

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