In this guest post June Cheung (lead image), JAPAC MD for Scope3, says that as more and more media push towards zero net emissions it creates a number of business opportunities for agencies and marketers…
Last year saw the Australian media industry gain a deeper understanding of how digital buying actions contribute to greenhouse gas emissions.
This is because whilemost media organisations aren’t directly running coal-fired power plants, they do generate Scope 3 emissions: indirect greenhouse gas emissions from the activity of their partners. For media this includes the energy used to power data centers that processes the billions of ad calls in a given minute. Given the huge scale that internet ads are served at, the CO2e generated through this activity is considerable and (surprisingly) comparable to the airline industry.
Now the problem has been highlighted, the next step will be for the industry to take action. A number of brands and agency holding groups have outline their approach to reducing the environmental impact of their digital advertising footprint and IAB Australia have stated that sustainability will be one of their core focus areas for this year.
Understandably, some publishers have expressed concerns that the push to decarbonise media could lead to the next wave of “tech tax” that could negatively impact them and be burdened by new forms of measurement and standards. However, the reality is, that for premium publishers, the move to decarbonise the digital media supply chain is much more of an opportunity than a ‘punish’.
And here’s why.
Quality content stands out with fewer carbon emissions
A recent study published by Scope3 and Ebiquity, which analysed $375 million of digital ad spend, found that 15.3 per cent of their advertising spend was wasted on inventory that generated no value for businesses but still generated excessive amounts of emissions.
Much of this inventory was on “Made For Advertising” (MFA) sites, many of which are high contributors to carbon emissions, generating 26 per cent more emissions than standard sites. By comparison, “Trusted News Websites” – those highly rated by the Global Disinformation Index – generate 52 per cent fewer carbon emissions than MFA sites.
This shows that measuring carbon emissions can help marketers identify waste in terms of low-value placements in their media buys.
Consider an agency and brand that are committed to achieving their net zero targets and are looking at ways to drive carbon reduction. They will evaluate the performance of their media on standard metrics such as reach, target audience and conversion, as well as carbon emissions. When they do, they are going to notice the MFA sites as an anomaly.
So, for their next media plan, they cut their spend on MFA sites and optimise towards premium publishers that not only deliver on standard performance metrics, but are lower carbon. Reallocating investment to high quality journalism is therefore boosting ad effectiveness and lowering emissions.
A shift towards premium publishers
Putting this into context, the IAB FY22 advertising expenditure report values Australia’s online advertising market valued at $13.9 billion, the shift of 15.3 per cent from MFA sites to quality sites is a potential $2 billion added as an opportunity to quality publishers.
As agencies and brands shift their media spend to green media, this will drive publishers and suppliers to evaluate their inventory from a carbon lens. Adtech leads on the publisher side will be asking: “do I really need the 100x duplication in every ad call across my supply chain?”
The end result is a reduction in wasted media spend for agencies and brands and an opportunity to invest in high quality news websites, delivering high ad effectiveness in a brand safe environment, whilst supporting quality journalism, and emitting less than half of the emissions.
Further, the removal of unnecessary ad tech intermediaries will improve the ecosystem overall. There will be more direct paths to premium publishers and a market behaviour shift to buy this way, and in turn more money in their pockets.
Good for the environment, good for business
Part of the reason for the accelerated push towards sustainability is that its not only the right thing to do but that it’s also good for business.
As McKinsey identified in a global survey on sustainability, around 40 per cent of respondents actually expect their companies to generate value from sustainability. The researchers consider that organisations should “approach sustainability issues as business opportunities” and seek impact through collaboration with other value-chain partners. Brands are listening and beginning to make big changes. For example, Mars Wrigley Australia has announced plans to begin wrapping its core range of Mars, Snickers and Milky Way bars in recyclable, paper-based packaging from April 2023.
So, there you have it. Is sustainability and opportunity or a carbon tax? My view is that premium publishers that see the opportunity in sustainability and embrace the shift to green media have more to gain from joining a cause that is good for the planet, profits and people.
I leave you with this recent quote from Unilever CEO Alan Jope during an interview at the World Economic Forum in Davos last month: “The business case is pretty clear– consumers are choosing sustainable brands at a preferred rate. We believe the investments take out costs. They don’t add cost to the business. It definitely lowers risk. And most of all, doing business on a sustainable platform is the magnet for young talent. So those are the reasons why we get into it. But it’s very commercially driven.”
