We live on a rapidly warming planet. The implications of this are mind-boggling: millions of deaths, tens of millions of refugees, trillions of dollars of damage to the global economy, the extinction of countless species… the list goes on. As corporations try to take action - whether for altruistic reasons or due to pressure from governments, investors, employees, and consumers - they are confronted with a basic problem: they don’t know how to connect their corporate activities to the impact they will have on the planet. They are turning to each of their supply chains and asking them to 1) accurately measure their environmental impact and 2) make substantial reductions, fast.
While advertising may seem like an unlikely source of environmental issues, advertising powers the internet. The biggest tech companies - Google and Meta for sure, but increasingly Apple and Amazon - are advertising companies. Netflix has succumbed to ads as have retail giants like CVS, Walmart, and Marriott. Ads fund and fuel the global economy, and it follows that advertising has a substantial impact on the environment. But how do we measure it?
Over the past 18 months, a number of organizations have worked on frameworks to measure the environmental impact of media and advertising. SRI published a reference framework to calculate the carbon footprint of digital campaigns and are planning to open source their emissions factors in early 2023. DIMPACT recently published a methodology to estimate the carbon impact of serving digital media. GroupM and EY collaborated on “A Unified Methodology for Accelerated Media Decarbonization.”
In a normal situation it would take years for these frameworks to evolve, reconcile, and be turned into an industry standard. We don’t have years. We need to align these frameworks in the next six to nine months - no later than the end of 2023 - so we can incorporate them into the fabric of the industry and start driving substantial reduction.
Based on my personal experience working with brands, trade associations, agencies, platforms, publishers, and ad tech companies over the past 15 months, I believe there is a clear pathway to aligning on a single framework in this timeframe. Here’s what I think we need to do.
Step 1: Agree on the outcome we want to achieve
To me, the outcome is clear: have the least possible impact on the environment per unit of effective advertising.
Let’s unpack that backwards: What is “effective advertising?” It’s advertising that influences the target audience’s behavior. The next term, “per unit,” is important because it is not “per impression.” Lowering your cost per impression to buy a bunch of low-carbon, non-viewable ads makes no sense, environmental or otherwise. We need a different metric here, ideally as close to marketer revenue as possible: per click, per sale, per point of brand lift.
“Least possible impact” is also important for the same reason. Everything we do has some impact on the environment - even me writing this blog post on my laptop has something like 30W of energy use, plus I’m eating a bowl of cow yogurt with all of the methane and transport costs and… the point is, nobody’s saying I should starve myself or not write blogs. But I can try to do both of these things in the least impactful way (and if you know of a high-protein non-dairy yogurt, I would be thrilled!)
In summary, the most important idea here is that the point of advertising is to influence people, and our job is to have the highest return on carbon-adjusted ad spend as we possibly can.
Step 2: Understand the advertising lifecycle and agree on boundaries
To understand the environmental impact of any product, the first step is to perform a life-cycle assessment. This lifecycle starts with the raw materials that are extracted, transported, transformed into the product, and eventually disposed of by the consumer.
Here’s our current assessment of the lifecycle of an ad, mapped to the five GHG Protocol lifecycle stages. On the left, the creative is produced. This could be a highly professional car ad filmed on location on some windy road through a forest (lots of carbon!) or a text search ad that a small business owner made up at 2 in the morning (little carbon!) Similarly, the underlying media is produced: the TV show, news article, cat video, podcast, or video game. Next, the media is distributed to the consumer (streaming, loading, broadcasting, etc) and matched to an ad (this is where most of ad tech comes in, at least in the digital world). The product is “used” by the consumer when they consume the media and see or hear the creative: an impression is made! Finally, in the case of physical ads, the product is disposed - recycling a newspaper or magazine, or reusing the vinyl from an outdoor ad.
This lifecycle does not include “advertised emissions,” the environmental impact of changing consumer behavior based on their interaction with the ad. For instance, if I see that beautiful car ad and buy a new car, should the advertising ecosystem be accountable for the environmental impact of my purchase? What if that fancy new car was an EV? What if I charge my EV in New York where the electrical grid is not low-carbon?
The critical decision we need from an industry perspective is alignment on what’s in and what’s out when we measure the carbon footprint of a campaign. Some of the questions that we need to answer:
- Do we include emissions related to the consumer device (TV, phone, PC) during content consumption in the calculation of the footprint? 
- How do advertised emissions factor into the lifecycle? Should they be considered part of the disposal phase?
Step 3: Set guidelines for offsets and RECs
One of the biggest debates in the sustainability sector is how to account for carbon offsets. There are significant challenges to the "verified" offset markets, as this Guardian article explains. Buying voluntary carbon credits, even if carefully vetted, still significantly undercompensates for the social cost of carbon as explained in this FAQ by two Stanford professors. There are effective ways to invest in carbon removal that are real, valid, and verifiable. We need transparency and accountability for offsets that companies in the advertising supply purchase.
A similar issue exists with renewable energy credits, or RECs, which allow energy producers to transfer the credit for renewable power generation to the buyer. In concept these are a more direct way to counteract energy use as they apply on a watt-to-watt basis. However, as this article by WattCarbon points out, this offset needs to be purchased in the same market and in the same time period. Google takes this one step further by setting a standard 24/7 carbon-free energy.
Our decision on these issues is hugely impactful. If we decide that we will count all “verified” offsets and RECs, most companies will purchase the cheapest compliant credits, stop only those activities which are more expensive to continue than the cost of these offsets, and everyone will pat themselves on the back and consider the issue closed. Having been through multiple cycles of similar short-sighted failures of self-regulation, I don’t think that we can make the same mistake again . From Bloomberg: “Without a change to accounting methods, 42% of pledged Scope 2 emission cuts will not reflect an actual reduction in atmospheric pollution.”
Climate is a fundamentally different topic for media and advertising companies than, say, privacy. In the case of privacy, this industry is the primary source of the problem and truly solving it would have massive impact on the way the internet (and big tech) is monetized. Since other industries aren’t as involved, there really wasn’t much exogenous pressure or input until governments decided they couldn’t trust or wait for self-regulation to work.
In the case of climate, media and advertising aren’t the biggest source of the problem, and we are late to the conversation. Investors, governments, and NGOs are setting standards that will apply to all industries and supply chains. Therefore, we need to set guidelines that are likely to align with all of these groups as well as with the underlying science. I believe these guidelines should include:
- Mandate to report on electricity use and emissions using a location-based (and ideally 24/7) approach
- Clear standards for the vintage and location of applicable RECs
- Required disclosure of all REC, offset, and carbon removal purchases if included in emissions reporting.
- Industry alignment on requirements for offsets, ideally that requires financial compensation at or above the social cost of carbon instead of a one-for-one approach to credits.
- Definition of requirements to market media products (or companies, or properties) as carbon-neutral and net-zero, or ban doing so , and require that offsets and credits be kept separate from emissions in reporting.
Step 4: Create granular and heuristic models for each lifecycle phase
More to unpack! First off, what does “model” mean here? We need, in effect, a mathematical representation of the value chain that we can use to calculate a carbon footprint. These usually start as spreadsheets where you can see all of the component activities, multiply them by an “emissions factor,” and get an estimate of the carbon footprint.
As an example, say we are shooting that car ad and we want to calculate the footprint of the production. AdGreen has a calculator that includes something like 200 different aspects to think about for the shoot. For instance, how many members of the crew drove a car to the set? And were those small, medium, or large cars, because each of those would have a different emissions factor? This is a granular model.
For sustainability purposes we need this level of detail and accuracy, but it’s not useful to make decisions. Imagine we are trying to decide whether to do this shoot on location or to do it virtually using VFX. We need a much simpler “heuristic” model that lets us enter some assumptions - number of days of the shoot, number of crew, how many helicopter hours - and get a reasonable estimate of the carbon we can expect. Then we can make a business decision, back to step 1, about whether the improvement in the creative from the on-location shoot is worth the significant increase in the carbon footprint.
In summary, both types of model are necessary. Most reduction opportunities happen before we spend money, and we need good heuristics to make that possible. We need to hold ourselves accountable for the actual environmental impact of our actions, and for that, we need a granular model. We need to be very clear when we talk about numbers whether we are estimating or calculating, and to ensure that all calculations are based on sufficiently granular data to be accurate.
Step 5: Formalize the standard and its governance
We’ve agreed on what we’re measuring; we’ve addressed the key scientific issues; we have a framework to estimate and calculate emissions. Now it’s time to put all of this in action.
We need all of the decisions from the steps above to be ratified, published, and maintained by the industry as a whole. We need marketers, agencies, publishers, platforms, and technology vendors involved. We need scientists and environmentalists to weigh in, and probably regulators too. We need the standard to evolve as we learn more about our impact on the environment and as the surface of media continues to change. The first version of the standard will probably not include advertised emissions. We need to address that. The first version won’t address our impact on water (used heavily to cool data centers). We need to add that, as well as potentially other environmental impacts from our value chain.
This week, we announced that Ad Net Zero and the IAB Tech Lab will collaborate to create an industry standard for sustainability in 2023. We need to set a clear agenda and timeline for how each group will debate and decide on the key issues I’ve laid out above. We need the right people and organizations around the table and we need to work quickly. It is a huge undertaking and an important one, and I ask for your support and input as we go through the process.
If you would like to be involved, whether as a participant or just to stay informed, please subscribe to BOKonAds! I will use this blog solely for the purpose of discussing this standardization effort until we’re done. In addition, please watch our Github where we will be assembling all of the data, research, math, and models as we work through this process (noting that this may move to a different repo as the various groups move through their work). Most importantly, this blog, like our progress as a civilization and an industry, is a work in progress. I’ll update this post as things evolve, and will include footnotes where there are opinions or data points that I think are relevant. Please keep the ideas and feedback coming!
- Great point from Benjamin Davy: The challenge is how to be fair between channels. For example DOOH and Print usually consider the lifecycle of the screen and printed paper in their calculations so it would be better to align to be fair. On the other hand, a PC is a multitasking tool, a smartphone rarely is, etc.
- Also from Benjamin: An offset [doesn’t have to] change the calculation, it could be treated as a separate and distinct/voluntary action. On one side, you estimate concrete and durable carbon emissions. And separately, you can document contributions that will have varying durability/credibility in terms of carbon removal/avoidance. But it should be transparent.
- Benjamin again: As regulation on the use of "Carbon Neutral" as a claim is likely coming in Europe (after France) we can acknowledge neutrality is far too strong of a statement already, especially considering all the limitations you mention about the tools used today to claim it (cheap RECs and Offsets).