Sustainability and Programmatic Advertising: Can They Co-exist?

When we think about carbon emissions, we usually picture large factories emitting toxic fumes, However, statistically speaking, the advertising industry produces more carbon footprint than the entire aviation industry—1 million video impressions have the same carbon footprint as someone flying from Boston to London and back. Additionally, a typical online ad campaign emits 5.4 tonnes of CO2, almost half of what an average person in the UK produces each year.

It’s not easy to imagine that the advertising industry could have such a grim ecological footprint. But the reality has taken the industry by storm, compelling stakeholders to take steps towards sustainability.

Does this mean the ad tech industry is waking up to the importance of green advertising (greenvertising)? If yes, is there a way for publishers to watch their carbon steps and appeal to socially conscious brands and advertisers?

In a survey that studied over 400 digital advertising executives, virtually all (90%) now believe the digital advertising industry has a responsibility to reduce carbon emissions. Most respondents are willing to pay more for that sustainability, with 61% of brand marketers saying it’s more important than the “cost of media.”

As brand marketers and advertisers recognize the need for the ad tech industry to reduce its carbon footprint, publishers will potentially hold a responsibility to pivot their strategies. IAB also stresses the importance of it:

“Holding companies, platforms, and publishers too have their own initiatives to explore and reduce the impact their programmatic advertising efforts are having on the environment.”

How is the advertising industry responsible for environmental impact?

The advertising industry, particularly programmatic advertising, produces a significant amount of processing power. Real-time transactions, a massive amount of auctions, a high density of ads, and data transfer are all responsible for the strain on servers and consumers of a large amount of computing power, leading to an increased carbon footprint.

Understanding this issue can help publishers, marketers, and advertisers take cautious steps to build a sustainable future for advertisement.

If we put the ad creation process under a microscope, we can see that every step of it, from content production to publishing, has an impact on the plant which produces carbon emissions. In essence, the four contributors to carbon footprints are as followers:

• Web pages that take longer to load result in high energy consumption of servers, data centers, and devices used to access the internet. 
• The increased demand for 5G or WiFi requires energy to power the transmitting and receiving devices and the infrastructure that supports these networks, such as cell towers and data centers.
• Content production is a crucial step but requires tools and processes such as traveling to a particular location, cameras, and spotlights that eventually contribute to a larger carbon footprint. 
• Targeting and analytics, especially those that rely on data-intensive processes, can increase carbon footprint by consuming energy from the infrastructure used to store and process data. 

Besides advertisers and brands, consumers worldwide are also becoming more aware of climate change and preferring brands that genuinely care about the planet. 

However, a recent study shows 80% cited a lack of knowledge of sustainable practices as the biggest roadblock.

Therefore, sustainability is no longer a discussion; it’s moved to an issue the industry must collectively tackle.

A stride towards greenvertising

In 2021, digital advertising saw a 35% lift, reaching $189 billion. Besides, the video industry in Southeast Asia alone will be ~$ 4.5 billion by 2025. With growing customer preferences, publishers and advertisers need to step up and approach green advertising to cater to audience needs without adding to the environmental load.

The first step could be focusing on high-value and high-impact advertising that can drive a positive change in the industry. 

Currently, only 12% of the ad impressions are being accounted for properly, and the ad tech ecosystem is siphoning off 49% of online ad money before it reaches the publishers. This is leading to duplication of ads leads to financial wastage and causes high carbon emissions. 

This means the advertisement is neither reaching the audience nor generating any ROI but is generating significant CO2 emissions.

Further studies have revealed that most brand advertisers end up wasting money on inventory that does not generate any value while generating excessive amounts of CO2 emissions.

If the same amount of money is invested in high-quality websites, and delivered in safe environments, while focusing on the context of the ad content, it could deliver more value to the audience, generate ROI for the advertisers, and reduce the harmful impact it has on our environment.

Additionally, a more collaborative approach may be the key to making tangible changes. For instance, SSPs and DSPs can play an instrumental role in providing transparency and reducing carbon emissions. Publishers can be more stringent about the quality of ads they publish on their page and look for brand-safe, ethical, and high-quality advertisements.

Other steps could be reducing the use of heavy files, involving vendors to expand the conversation about greenvertising, and limiting ad density.

Furthermore, the stride towards greenvertising can be noticed when organizations and movements such as the following emerge:

• AdGreen: an organization that offers a carbon calculator to measure the amount of CO2 produced in the industry.
• AdNetZero: an initiative that aims to reach carbon neutrality by 2030.

While on the one hand, organizations are striving for carbon neutrality, on the other hand, digital advertising is on the rise and will continue to become the primary medium for ad distribution. 

The need of the hour calls for the entire ad tech industry collectively work together towards green advertising to bring a sustainable and tangible change in the advertisement ecosystem. 

Despite ongoing discussion and desire for sustainability, the question persists: will publishers and advertisers actively strive to reduce their carbon footprint while staying profitable?