The Race to Net-Zero Emissions by 2030

What are the implications of trying to meet the net-zero goal by 2030?

November 22, 2022

According to the Intergovernmental Panel on Climate Change (IPCC), global emissions must be halved by 2030 and reach net zero by 2050 to avoid climate catastrophe. The adtech industry is starting to do its part, with agencies like WPP, Havas and OMG committing to achieve net-zero carbon emissions by 2030. While this is a great start, the question is, what will it take to convince the entire adtech industry to achieve net-zero emissions by this key deadline? Here’s what Frank Maguire,Vice President Of Insights And Strategy at Sharethrough has to say.

The internet generates approximately 4% of global carbon emissionsOpens a new window , which is more than the civil aviation industry. Since advertising powers much of the internet, digital advertising is a big part of those carbon emissions, especially considering that the energy required to deliver just 1 million ad impressions generates about 1 metric ton of CO2, which is about the same as one round trip flight from Boston to London, per person! So, how can brands, agencies, publishers and all other players in ad tech achieve net-zero carbon emissions?

Incentivized Carbon Reduction

Even with a growing number of brands, agencies and adtech companies making commitments to reduce carbon emissions, it will take more than relying on the virtues of every digital company to reach net-zero carbon emissions for the whole industry by 2030. Similar to challenges in any industry trying to enforce new sustainability initiatives, driving mass adoption requires incentives. Sometimes that incentive can be as simple as becoming more sustainable is better for business. For instance, with gas prices increasing, electricity is the more cost-effective alternative, so many consumers are switching to electric vehicles, which further incentivizes car manufacturers like GM to commit to switching their whole fleet to electric vehicles. 

In the digital advertising world, the incentives depend on what part of the supply chain a company sits on. Advertisers, for instance, will be more incentivized to purchase ads with less or net-zero carbon emissions if the performance and reach of those ads are equal to or better than their regular ads. One way to maintain performance is to ensure the price to compensate for carbon emissions is not prohibitively high. This would require the industry to standardize and enforce a sort of carbon tax that fluctuates depending on the emissions by the partner. Doing so would incentivize everyone from ad servers, DSPs, SSPs, and DMPs to publishers to reduce their carbon footprint or risk losing out on revenue from advertisers that need to bid higher to win more carbon-heavy impressions.

Such standardization and enforcement sound difficult, but it is possible, and the process has started. For instance, a trade group with backing from most major holding companies and adtech companies that has taken the lead on developing standards and helping the industry move towards net-zero emissions.

See More: How OOH Is Reclaiming Its Seat in Advertising

Can Sustainable Ads Outperform Standard Ads?

The matching performance of standard ads is great but what would really catalyze the advertisers to adopt sustainable ads is if they outperform standard ads. Is this possible? For two main reasons, the answer is not just “maybe” but “most likely yes.” 

The first reason is because of improved supply path optimization (SPO). SPO is the practice of finding the most direct and cost-effective route to access ad supply on a publisher’s site or app. Often, removing any middlemen or resellers of that inventory is the quickest way to find the most efficient path. Doing so also happens to naturally reduce carbon emissions since each hop in a supply path requires additional energy and carbon emissions. So when advertisers run on more direct supply paths in combination with solutions that either compensate or reduce carbon emissions (more on that below), then the cost efficiency of those paths should further improve the return on ad spend of those ads. 

The second is a green icon, similar to the Adchoices icon, that can label and educate consumers on why the ad they’re seeing has net-zero carbon emissions. ResearchOpens a new window shows that consumers are 80% more likely to support brands that reduce their carbon footprint. So such a label could help to improve attention and, therefore, the performance of these green ads. 

Reducing Programmatic Emissions

So how do we lower carbon emissions throughout the programmatic supply chain? The first step is understanding the sources of those emissions. In adtech, carbon waste is generated from the data transmission and servers that send the ad campaigns between advertisers and consumers. A few new companies are tackling this carbon measurement problem, such as Brian O’Kelley’s Scope3, which helps advertisers, publishers and adtech companies measure the carbon emissions required to deliver digital ads.

Once each company in the digital supply chain can understand the quantity and sources of where their emissions are coming from, there are two main ways they can reduce those emissions: compensation and reduction.

Compensating for the exact amount of carbon emitted is the fastest way advertisers can make an impact. Science-backed calculations exist to help any company invest in carbon removal projects – such as carbon soil capture, reforestation or direct air capture – that remove the exact amount of carbon that was emitted from the delivery of those ads. A few supply-side platforms have started developing turnkey solutions for this called Green Media Products (GMP).

See More: How Brands Can Use Voice Technology To Advertise in the Metaverse

The other way, which can be done in conjunction with compensation, is for companies to understand their emissions’ full scope and then work to reduce them. Most often, this is done by switching to fully relying on renewable energy. Luckily, as the cost of renewable energy has, in many cases, become cheaper than non-renewable energy sources, more companies are further incentivized to make this switch.

For publishers, reducing emissions can also come from reducing the weight of data and code on their page required to load ads. A few companies have built solutions to help publishers do exactly that, which in turn leads to faster loading sites and lower emissions. 

Don’t Wait. Act Now

Every industry has to start doing its part to reduce its carbon footprint, or we risk a catastrophic impact on our earth. Now that the digital advertising industry is aware of its impact, every company needs to develop a plan to reduce emissions and hopefully commit to net-zero emissions by or before 2030. Luckily, it is easier than it has ever been to develop such plans, and the incentives to decarbonize should even improve the bottom line of those that make an effort.

Tell us about your efforts to reach the net-zero by 2030 goal on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to know all about it!

MORE ON REDUCING CARBON EMISSIONS

Frank Maguire
Frank Maguire

Vice President of Insights and Strategy, Sharethrough

Frank Maguire is the Vice President of Insights and Strategy at Sharethrough, one of the largest independent ad exchanges. A digital advertising industry veteran, Frank has spent over a decade at Sharethrough conducting research studies to better understand how humans respond to advertising and sharing strategies, insights and best practices that help brands and agencies adapt their unique advertising challenges to ever-evolving media consumption behaviors.
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