The Advertising Ecosystem Must Act Now: Decarbonising Programmatic Advertising

In this week’s article, learn more about the carbon emissions impact that programmatic advertising has on the environment. Advertisers are encouraged now to think about the carbon emissions all media buying emits, and look for ways to reduce this. With some brands looking to offset their advertising carbon emissions, looking under the hood of programmatic buying is a good place to start.

Introduction

In the digital age, advertising has become inseparable from the technology that powers it. However, the environmental impact of programmatic advertising, particularly its carbon footprint, is a growing concern. Advertisers, as key stakeholders in the ecosystem, hold significant power to drive change.

In this week’s article, Jerome Velasquez, Product & Solutions Director, explores why advertisers must prioritise decarbonising programmatic advertising.

Concerning current state

Labelled a ‘code-red’ for humanity by the United Nations secretary-general, the world’s most authoritative body on climate science, the Intergovernmental Panel on Climate Change (IPCC) produced a report that concluded that the Earth could be just 10 years from heating by more than 1.5 degrees Celsius which signals even more serious natural events such as fires, droughts, floods and cyclones which could devastate parts of the world.

In as far as how this relates to advertising, Scope3, an industry leading body on measuring carbon emissions for the industry released their State of Sustainable Advertising Report, and found that programmatic advertising generates 215,000 mt of CO2e every month across just 5 major economies (US, UK, DE, FR, AU). That is understood to be the equivalent to the impact from 24M gallons of gasoline consumed. For Australia, Scope3’s report shows Australia’s annual digital advertising contribution is 199,000 metric tonnes.

Programmatic advertising: a key contributor to carbon emissions

Programmatic advertising contributes to carbon emissions primarily through the energy consumption associated with its infrastructure and operations. In fact, Scope3 found that as at Q2 2023, digital ad emissions resulted in to 7.2M metric tons annually and that display accounted for approximately just over half of this at 3.8 mt. It was also found that the majority (60%) of carbon generated by the programmatic advertising comes from ‘ad selection emissions’ and can be attributed to the notoriously complex supply chain.

The advertising world is coming together

Progress is being made within the advertising industry, notably through initiatives led by global trade associations such as Ad Net Zero and the World Federation of Advertisers (WFA) Global Alliance for Responsible Media (GARM). These efforts aim to establish a standardised measurement framework. Once finalised and endorsed, this standard will enable the calculation of more precise metrics related to emissions intensity and contribution.

Additionally, the IAB’s Tech Lab has developed a guide to assist in optimizing the programmatic supply chain. Many more actions are being kick-started, driven by industry bodies such as Scope3 and more along the programmatic ecosystem.

Playing a part is not hard

For an additional incentive, Scope3 also partnered with Ebiquity to release a report that analysed more than $375M of digital advertising spend across 116bn display ad impressions from 43 brand advertisers. This revealed that 15.3% of their advertising spend is wasted on inventory that generates no value to their business while generating excessive amounts of CO2 emissions, showing that if nothing else, advertisers should be financially motivated in cleaning up their activity to minimise waste.

The best way to act now is within the programmatic supply chain, namely through supply path optimisation. Along with the general reduction of financial wastage, the aim here is to reduce carbon emission through the reduction of data processing and storage by reducing intermediaries or steps within the buying process. This also involves prioritising ‘green inventory’ as there are significant differences between low emission paths compared to high emission paths.

According to Scope3, this does not harm campaign performance, as there are overlaps between ‘green inventory’ and inventory that’s high performing, high attention and privacy compliant. Our buyers are also tasked in reducing low win rate paths which reduces the computing needs for bidding on significant volume of exchanges and inventory, concentrating towards inventory and partners that not only perform but are also better for decarbonisation.

We can see that we can all support the effort here, and we know that we must act now.

Get in touch with an ADMATICian today to understand how we can help you get started with initiatives and strategies to achieve a more sustainable future.