When the topic of global warming is brought up, seldom does the average mind contemplate the contribution of digital advertising. Yet, the digital ecosystem has swiftly emerged as the primary driver of greenhouse gas (GHG) emissions, exhibiting annual growth of 6% over the past five years.
According to research conducted by The Shift Project and Good-Loop, digital initiatives are now responsible for 3.5% of global GHG emissions, surpassing the overall contribution of aviation. This issue is further exacerbated due to the fact that the carbon footprints of digital campaigns are largely invisible.
But why, really, should advertisers care?
Aside from the ethicality of mitigating unnatural climate change to preserve natural resources and maintain biodiversity, the minimisation of carbon contamination is privy to commercial gain.
For one, brands that proactively reduce their carbon footprint and demonstrate a commitment to sustainability often enjoy an enhanced brand reputation: increased customer satisfaction, stronger brand affinity, and a loyal customer base. In a study conducted by Carbon Trust, 45% of shoppers stated that they would cease purchasing their preferred brands unless those brands actively measured their carbon footprint. Given that “green” thinking is now much more closely aligned with societal progression than in the past, this finding is hardly surprising.
From a cost-saving point of view too, taking steps to reduce carbon emissions often involves adopting energy-efficient practices and technologies, resulting in long-term cost savings.
Even so, the push for sustainable action – particularly decarbonisation – is not without resistance; though, opposition often stems from a lack of understanding of where to begin. Let’s take a deep-dive into the activities proving most energy-intensive and what advertisers can do to subside them.
Looking specifically at Paid Media, certain facets incur greater expense than others.
Data centres, for example, are a crucial component of the digital advertising infrastructure. Yet, they require a significant amount of electricity to power and cool the servers that store and process vast amounts of data. Likewise, ad tech providers, including demand-side platforms (DSPs), supply-side platforms (SSPs), ad exchanges, and data management platforms (DMPs), require extensive data storage and network infrastructure, all of which consume energy and contribute to carbon emissions.
On a broader level, display advertising, by virtue of serving graphical and multimedia ads, is a considerable contributor to overall digital emissions. The creation and delivery of these ads involve content rendering and the use of high-resolution images and videos – energy-intensive processes intensified by the absence of optimisation (more on this to come). Particularly the case with video and rich media, streaming high-quality videos and running complex multimedia ads consume substantial amounts of bandwidth and require powerful computing resources. The result? Elevated energy usage and heightened GHG emissions.
So, what can industry players do to mitigate the harmful effects of digital advertising?
Firstly, before decarbonisation efforts are even attempted, advertisers need to track and benchmark the carbon cost of their campaigns; the key is to identify and reduce unnecessary intermediaries contributing to overall emissions. Fortunately, tools can assist with such refinement.
One such aid, Cedara, an “intelligent” carbon calculator platform, enables accurate measurement of carbon intensity across the supply chain to optimise investment strategy and accelerate efforts towards achieving net zero. With such insight, advertisers can educate stakeholders about the importance of reducing carbon emissions and encourage collaboration amongst advertisers, agencies, publishers, and technology providers.
For immediate and tangible impact, advertisers can collaborate with suppliers who integrate sustainable practices into their creative processes. Certain ad tech providers give priority to working with SSPs that derive their energy from renewable sources; this commitment ensures that the infrastructure powering PMP media transactions operates on environmentally friendly energy. Refer to section 1.5 for a specific illustration of such a partnership.
Others approach decarbonisation indirectly. For instance, carbon offsetting initiatives are often used to balance out remaining emissions. By investing in projects that lower greenhouse gas emissions, such as renewable energy projects or reforestation efforts, and implementing internal initiatives like energy conservation programs or employee commuting incentives, advertisers can actively reduce their carbon footprint.
The simplest way to identify those ad tech solutions who prioritise decarbonisation is to investigate their operation of infrastructure – look out for the implementation of energy-saving technologies and renewable energy sources. Moreso now, suppliers are entering contracts with renewable energy providers and investing in on-site renewable energy installations like solar panels or wind turbines to reduce reliance on fossil fuels.
Another clear indicator is the transparency of reporting on carbon emissions and environmental impact, particularly a public demonstration of commitment to sustainability and environmental responsibility.
Bidding parties at auctions
The programmatic process itself is not without fault – streamlining the bidding process is key here.
With fewer bidding parties participating in auctions, there is a decrease in the amount of data traffic generated during the real-time bidding process. Each bid request and bid response in the programmatic ecosystem involves data transfer which, as mentioned, consumes considerable energy.
But how can the number of participating parties, and by virtue, the number of bids, be reduced by capitalising on auction dynamics? The answer appears to lie in the auction type selected. Certain strategies ensure a more targeted and controlled auction environment while minimising unnecessary bid competition:
- Preferred deals allow advertisers to negotiate direct deals with publishers for specific ad inventory at pre-negotiated rates. By leveraging private auctions, advertisers can establish direct relationships with publishers, bypassing the open marketplace and reducing the number of intermediaries involved. This approach offers more control, transparency, and potentially better inventory access.
- Private marketplaces are invitation-only auctions that limit participation to a select group of buyers and sellers. Akin to the rationale of point one, direct relationships between publishers and preferred buyers reduce the number of overall bids.
- Programmatic guaranteed deals enable advertisers to negotiate and execute direct deals with publishers programmatically. Advertisers can negotiate fixed rates and specific ad placements, enhancing efficiency and reducing costs.
Consolidating the bidding process eliminates unnecessary go-betweens; simplification reduces complexities and minimises energy consumption associated with multiple hops in the supply path.
The key point to note is that a reduction in the number of open marketplace deals, which are accessible to a wide range of advertisers, leads to a decrease in the number of bids placed on individual impressions.
Sustainability of creatives
Perhaps the most immediately actionable of all initiatives is asset development. As of 2022, over 15% of digital advertising spend is wasted.
Creative optimisation is crucial – the delivery of better, fewer ads. By customising the content and design of creatives for specific user segments, the probability of effectively engaging the desired users increases, thus minimising the number of “wasted” impressions (ad placements that reach irrelevant or uninterested consumers). Through continuous A/B testing too, advertisers can refine and improve creatives based on data-driven insights; identifying effective creatives and messaging and reducing ineffective ad iterations to minimise energy consumption associated with displaying underperforming assets.
In much the same way, dynamic creative optimisation facilitates real-time customisation of creatives based on user data and contextual information. This dynamic adaptation ensures that creatives remain relevant and engaging, eliminating the need for constant manual updates. Well-crafted ad copy that effectively communicates the value proposition and resonates with the target audience increases the likelihood of attracting clicks and engagement: when ads are more relevant to users, they are more likely to generate clicks and conversions, reducing the need for additional ad impressions and consequent energy consumption.
The originality of creatives aside, reclamation of existing ads is a sure-fire way for developers to reduce the environmental impact of campaigns. Elements such as images, graphics, animations, or videos can be modified to create new variations or refresh existing campaigns. This approach reduces the need for resource-intensive production processes.
Format selection is likewise essential. Excessive animations and complex effects can increase the computational load and energy consumption of devices displaying the creatives; advertisers should thus focus on delivering a clear message with minimal visual distractions.
Effective ad targeting to reach the intended audience and capture attention (therefore ensuring every impression is delivered) goes hand-in-hand with effective creative optimisation. By targeting the right audience with tailored messages and offers, the likelihood of higher conversion rates increases. When users are presented with ads that align with their interests and needs, they are more likely to convert, reducing the need for additional ad impressions and associated energy consumption.
Down-funnel, overly aggressive or indiscriminate retargeting can result in excessive ad exposures and higher energy consumption. Effective targeting ensures that retargeting efforts are well-balanced and strategic, reaching users with relevant ads at the right frequency. By avoiding ad retargeting overload, energy waste is minimised, leading to a lower carbon footprint.
Despite the seeming doom and gloom, ad tech partners and suppliers are actively moving toward a cleaner future.
For example, in a recent announcement, Yahoo unveiled a strategic partnership with Scope3, facilitating the availability of carbon-neutral private marketplace (PMP) media within the Yahoo SSP. This collaborative effort empowers advertisers utilising the SSP to easily access and procure “Green Media Products” (powered by Scope3), ensuring digital ad campaigns align with overarching sustainability objectives.
Reducing carbon emissions in the digital advertising industry is an urgent and necessary goal.
It is crucial that advertisers prioritise quality over quantity to have a positive environmental impact. This means investing more in reaching higher quality users with fewer ad variants, rather than deploying a large number of inexpensive impressions that ultimately prove to be costly for the planet.
If not for the ethical and environmental implications, decarbonisation offers cost savings and operational efficiencies and often enhances brand reputation.