A new benchmark in advertising technology: carbon emissions

The digital ad industry is starting to wake up and respond to the unexpectedly high carbon footprint of delivering billions of digital ad impressions per day. While a few brands, agencies and adtech companies are starting to commit to achieving net zero carbon emissions as early as 2030, the question remains: What will it take for the majority of the industry to get on board with such lofty goals?

The solution likely lies in how the industry will prioritize reporting on carbon emissions; how advertisers will use their financial clout to hold their partners accountable for reducing carbon emissions; and by educating consumers about carbon emissions.

Quantifying the CO2 emissions of digital advertising

Digital advertising is generally regarded as the more environmentally friendly alternative to the more tangible negative environmental impact of print advertising. However, the reality is that the internet generates about 2 to 4% of all CO2 emissions, about the same as civil aviation. While much of that comes from digital advertising delivery, the good news is that digital advertising has the power to be the first industry to become carbon neutral.

To put that into perspective, the energy required for all data servers, ad servers, and user devices to serve just one million ad impressions is equivalent to about one ton of carbon dioxide emitted. That is equivalent to the emissions of:

• One passenger on one round trip between Boston and London
• Charge over 121,000 smartphones to full battery capacity
• The carbon in 2.4 million plastic straws

Tracking the CO2 emissions of digital advertisements

The good news is that the digital advertising industry’s focus on reducing carbon emissions is gradually gaining momentum since 2016, when 200 countries signed the Paris Agreement for a global goal of net zero carbon emissions. In 2020, the UK Advertising Association was launched Ad net zero, in recognition of the global advertising industry’s need to become more environmentally friendly. Since then, numerous agencies and brands, such as WPPHavas, Dentsu, Disney, Unilever and Dell have pledged to reach net zero emissions by 2030 or beyond.

But how will adtech achieve such aggressive carbon reduction goals? An essential step is setting standards for how the industry measures and reports carbon emissions. By measuring carbon emissions, an organization can get a baseline of their current carbon waste and determine their largest sources of emissions. Just as many companies report their financial performance publicly, reporting on carbon emissions is a great way for advertisers and brands to remain transparent and accountable for their goal of net zero carbon emissions.

Set industry standards

However, measuring CO2 emissions is not exactly easy. One way to simplify the process is to understand the many components that affect a company’s carbon footprint. They are divided into three categories: scope 1, scope 2 and scope 3.

Scope 1 and Scope 2 emissions are generated by the advertiser’s facilities and grid energy use. Scope 3 emissions are generated by the advertiser’s media buying supply chain and are typically good more than 90% of a company’s total CO2 emissions. To give advertisers an accurate picture of the carbon emissions generated, it is crucial for them to know how much their DSP, SSPs, DMPs, publisher partners and other suppliers contribute to their Scope3 emissions.

For this to work, the advertising industry needs to agree on standards for carbon emissions reporting. Such an initiative should come from an organization such as the IAB or in collaboration with sustainable organizations such as Ad Net Zero. A third-party technology solution is also needed to measure the CO2 output created by serving digital advertising. Scope3led by former AppNexus founder Brian O’Kelley, is one of the first companies to build such a solution, but the door is open for others to do the same.

Advertisers have the power to catalyze change

Environmental sustainability in adtech requires a collective effort from every participant in the industry. However, advertisers have the most power to drive significant change throughout the programmatic supply chain. Brands and agencies, in particular, can use their advertising money to prioritize their advertising spend with partners and suppliers who measure and report on their carbon emissions. They can also pressure partners to develop out-of-the-box solutions that reduce friction so that advertisers can start buying “green” media right away.

The optimal first place for advertisers to direct their influence is with ad exchanges, as they determine the path from advertiser to publisher. Once exchanges can provide solutions to offset the carbon emissions of the advertising supply chain, the rest of the supply chain can follow suit. Fortunately, a handful of SSPs have started offering such solutions.

But when most exchanges have a carbon offsetting offer, advertisers can push their DSPs to give them an easy way to buy only through partners and/or publishers that can offset their ads’ carbon emissions. As more and more brands, agencies and adtech partners reduce their carbon emissions, the industry is more likely to reach ad-net zero by 2030.

Reaching and educating consumers

The other key priority in this process is educating consumers about both the environmental impact of web browsing and what advertisers are doing to offset carbon emissions. A recent study revealed that six out of ten consumers were unaware that digital advertising and internet browsing cause carbon emissions. Advertisers have an extra incentive to inform consumers about their efforts, as 80% of consumers prefer brands that reduce their carbon emissions.

Brands that have a vetted sustainability plan can use their creative messaging to educate consumers about the ways they’re working to reduce their carbon footprint while making sure they don’t sound like greenwashing. But educating consumers about the carbon emissions impact of surfing the internet is more difficult. It requires the adtech industry to work together to write and produce customer-friendly content, and possibly create labels to identify ads that run with net-zero emissions. Once the industry has aligned itself with tracking and reporting those emissions, such steps will be easy to implement and will go a long way in educating consumers.

Net zero carbon emissions are possible by 2030

Now that the advertising industry is aware of the impact it has on the environment, it’s time to take action. The good news is that solutions are in development and advertisers are at least starting to use their purchasing power to make a difference. A rising tide can float all boats, but adtech must act quickly before the real rising tide washes the boats to shore.

Frank Maguire is VP insights and strategy Share over.