Big advertisers find their digital ad campaigns carry a hefty carbon tax

Making Net Zero Possible, presented by Schneider Electric

Kazi Awal / Initiate

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Digital advertising accounts for the majority of marketers’ advertising budgets – and an almost hidden proportion of their companies’ carbon emissions.Mr. Cole_Photographer/Getty Images

  • A typical digital ad campaign for a single brand can produce hundreds of tons of carbon dioxide.

  • Brands like Heineken, Nestlé and Toyota are looking to reduce these emissions.

  • This article is part of the “Making Net Zero Possible” series, which uncovers forward-thinking solutions that can make a net zero future a reality.

Many of the world’s biggest brands want you to feel good about their commitment to net zero emissions. But digital ads that boast of these promises have their own costs to the planet.

Of the $500 billion marketers spend on advertising each year, nearly three-quarters of that year’s total goes to digital advertising. And with digital or programmatic advertising, which powers everything from connected TV platforms, retail media and outdoor advertising, the industry’s carbon emissions are only expected to increase in 2022 and beyond. of the.

According to a recent estimate from Fifty-Five, a marketing agency, a typical digital ad campaign – consisting of filming, editing, serving and measuring video, social, display and search ads – for a single advertiser produces 323 tonnes of carbon carbon dioxide, the equivalent of 160 return flights between Paris and New York.

In the milliseconds it takes for an ad to load on a webpage, dozens of companies from ad agencies, data management platforms, ad exchanges, ad servers, and vendors brand safety companies participate in a bidding process to win the auction that serves an ad to a particular type of consumer.

A graph showing the carbon impact of the digital advertising industry

Alyssa Powell / Insider

In the process, thousands of servers kick into action, requiring electricity to power each ad call. “It’s the hidden cost of advertising that needs to be exposed,” said Ruben Schreurs, chief product officer at Ebiquity, a marketing and media consultancy.

A handful of big-brand advertisers – including Nestlé, HP, Toyota, Heineken and UK supermarket chain Tesco – are looking at how they can reduce their digital advertising footprint. But experts say the convoluted nature of the online advertising ecosystem and its many power-hungry intermediaries make the task daunting.

Other marketers are hesitant to add another audit to their growing lists of responsibilities, especially one that’s unlikely to translate to immediate sales growth when high inflation might cause some consumers to cut spending.

Carbon calculators and providers help track, reduce and offset digital ad emissions

Last year, Nestlé began tracking emissions related to its digital ads in Europe. Nescafé in France worked with Impact+, an adtech company, to halve the energy produced by an online video advertising campaign.

Nescafé France also used a tool from Publicis Groupe, another advertising agency, to calculate the carbon offset price for a campaign for KitKat sweets in the UK. It came in at just £460, or $547 – a small fraction of the £1.6m, or $1.9m campaign.

Nescafe packaging on a supermarket shelf

Nestlé has started measuring the carbon impact of its digital ads on a handful of its brands in Europe.Universal Images Group Editorial/Getty Images

Tina Beuchler, global head of media and partnerships at Nestlé, told Insider there are encouraging signs from these early tests that greener digital ad buying efforts can boost sales and other metrics. commercial.

“It’s not a cost factor per se,” she said. The fact that companies don’t have to choose between buying green advertising and controlling costs is a plus, Beuchler added.

Tesco is applying its plastic waste reduction strategy to the company’s media plans. The supermarket chain last year started using a carbon calculator from its media agency, MediaCom, to measure emissions across Tesco’s marketing channels, and turned to suppliers like Mobsta to eliminate impressions wasted advertising.

Toyota is working with The&Partnership, a media agency, and SeenThis, a Swedish technology company, to reduce the load times of its digital advertisements and thus reduce the use of data from its campaigns. HP and Heineken are also in the early stages of determining the environmental impact of their digital spending.

Who should reduce emissions from the digital advertising industry?

Some experts believe the marketing industry has a long way to go to quantify and reduce its carbon footprint.

Mikko Kotila, CTO of Cavai – an advertising technology company – and author of the research paper “Assessing the environmental impact of online advertising”, said advertising agencies tend to focus on reducing their direct emissions, but the largest source of emissions is the consumer after purchasing an advertised product.

Scope3, a startup that measures the carbon footprint of digital ads, said ad tech giant The Trade Desk eliminated nearly 5,400 tons of carbon a year by shutting down ad auction platform Open Bidding. Google. Scope3 calculated that if every ad company stopped buying ads using Open Bidding, it would save 100,000 tons of carbon per year, which is equivalent to taking 20,000 cars off the road. Google did not respond to Insider’s requests for comment.

“I’m not optimistic. But at the same time, we have very proactive things,” Kotila said. He pointed out that The Trade Desk was opting out of Google’s Open Bidding tool, saying the move reduced inefficiencies in the bidding process for advertisers – although sustainability may not have been his original goal.

Other industry experts say marketers should ultimately take responsibility for cleaning up emissions from the digital advertising industry.

Still, there aren’t many global benchmarks and standards for marketers to follow, and others don’t want to go public with their own numbers first.

Another major challenge for marketers is proving the ROI of their sustainability efforts to the rest of the C-suite.

“We just have to be very serious about putting the responsibility where it belongs, which is on the sellers,” Kotila said.

Read the original article on Business Insider

Marilyn J. Hernandez