What does the establishment of a responsible digital advertising supply chain and ecosystem really mean? And how can we get started in a real, measurable way? Asks Nishant Khatri, SVP, Product Management, at PubMatic.
When an industry as complex as ours is dealing with a topic as complex as this, it’s easy to get stuck in a state of wheel-spinning, with various players looking to foist responsibility on others. This is a temptation we must resist. There’s plenty of responsibility to go around, and we need to identify the areas where meaningful progress can begin while we sort out the more complicated elements.
It’s time for the digital advertising ecosystem to embrace progress in place of perfection. Here’s what that can look like in concrete terms.
Reduction Where It Matters Most
When we talk about environmental sustainability, we’re really looking at ways to reduce the carbon footprint of our industry. In this regard, there are a number of places where advertisers, publishers and ad tech providers can do better—the power consumption of our offices, the food we stock in our break rooms, the airlines we fly to business events. But if we’re talking about focusing our efforts somewhere really meaningful, one potential area for reduction overshadows the others many times over: data centres.
Within the ad tech supply chain, there are concentrated areas—ad servers, SSPs, DSPs, measurement and data partners, and other nodes—where a tremendous amount of power is being consumed. In fact, at PubMatic, based on an analysis of our UK operations, we estimate that nearly 98 per cent of our electricity usage happens in the data centres used to process ad impressions. Everything else is minimal by comparison.
Of course, the vital role that data centres play in our industry isn’t going away. Quite the contrary—their importance to delivering relevant, impactful digital ad experiences grows daily. Likewise, the way in which today’s publishers make their inventory available to ad buyers—a process that is drawing criticism in sustainability conversations for its duplication of bid requests and, thus, power consumption—is not going to change overnight. The supply path has been built to drive monetisation benefits for publishers. While it makes sense to streamline the path by removing partners that don’t add value, such selection should reflect factors directly related to carbon emissions.
In other words, reducing duplication isn’t where our industry has a chance to make huge gains in sustainability in the near term. Where it does have an opportunity to make huge gains is in prioritising and incentivising those data centres that employ renewable sources of energy versus fossil fuels. In this way, our industry can continue to grow and refine its practices while simultaneously reducing its carbon footprint in the area where the greatest energy consumption is occurring.
Reporting to Improve Accountability
If our industry can collectively agree that moving to renewable sources of energy to power our data centres is a logical place to focus our sustainability effort, then the next step is a bit more complicated—but doable. We need to put a reliable reporting mechanism into place so companies can indicate the amount of renewable energy that’s powering their operations. That way, when advertisers look to understand their carbon impact, they’ll be able to draw their partners’ renewable energy profiles into their measurement solution via API in order to stitch the data together and understand their own footprints.
Each tech vendor can expose their energy footprint for every advertising channel at the required level of granularity for their preferred carbon calculator to consume. This can include SSPs, DSPs, data vendors, verification providers, and others. The total energy consumed, along with renewable energy share, can be calculated. With this level of transparency, buyers can make buying and optimisation decisions by putting renewable energy data side by side with the other KPIs they look at today.
This focus on renewable energy usage in data centres and reporting obligations represents our industry’s fastest, most accountable path toward a meaningful near-term reduction of our overall carbon footprint, as well as the beginning of our path to longer-term sustainability and environmental responsibility. To bring this to fruition, advertisers need to challenge those who contend calculating emissions is too complex a challenge within our industry. We need to embrace simplicity in our approach—progress, not perfection.
Industry organisations Ad Net Zero and IAB Tech Lab have both taken note of the magnitude of data centre energy intensity and, as a result, the criticality of the attention to this area. As these major industry bodies look to continue to energise our industry’s progress against sustainability goals, we should be sure to include renewable energy in our carbon reporting calculations.
From a publisher standpoint, this focus shouldn’t serve as a free pass to continue down the path of unnecessary supply chain complexity and duplication of bid requests. Now is the time for publishers to pivot to models and partners that are embracing innovative and more efficient technologies that reduce hops within the supply chain and deliver added value. Publishers’ sustainability initiatives should move on a parallel path with broader industry reduction efforts.
Sustainability isn’t an insurmountable challenge for our industry. It’s just one where we’re having trouble agreeing on a starting place. But focusing our collective efforts on the area where we can deliver the greatest impact in the shortest amount of time, we’ll set the tone and build the momentum we need to tackle other more complicated initiatives.
The hard work starts now.
