Why media buyers are asking more questions about the sustainability impact of their ad campaigns

climate change revenue

Publishers claim that advertisers are spending more money on sustainability-related content, but brands and their ad agencies are now asking more frequently about how much carbon is being created from those ads themselves — as well as their digital ad campaigns holistically.

That growing interest is putting pressure on publishers to start measuring their carbon emissions with more intentionality, if not begin decreasing the size of their carbon footprints altogether.

The issue isn’t yet a dealbreaker for these campaigns, but it’s giving agencies a baseline for who to work with down the line, according to three agencies that spoke with Digiday. So far, that’s translated into agencies asking for carbon emissions ratings in their request for proposals (RFPs) to publishers.

“Brands are [now] aware that they were mis-sold this idea that digital [advertising] is in the cloud and [it] doesn’t have a real physical impact. They’re now realizing that digital actually just means warehouses and warehouses of servers plugged into national grids, and that’s just an insane amount of computing power that goes into running the [advertising] ecosystem,” said Anne Coghlan, COO of Scope3, a carbon emission measurement firm that works with digital media players like Insider, Vox Media and DoubleVerify.

Some publishers and agencies have begun practicing supply-path optimization —  spending fewer ad dollars on high carbon emitting supply paths — as well as reducing the number of sell-side platforms (SSPs) and demand-side platforms (DSPs) that publishers and media buyers transact in altogether.

Is carbon calling the shots?

No, not yet. Many ad agencies are in the process of setting up benchmarks or thresholds for themselves and their clients regarding how much carbon they will allow their ad campaigns to create.

“Every client we’ve discussed this with has approached green media as a nice option to have, but generally opt for performance over pursuit of specific vendor initiatives,” said Seth Hargrave, CEO of media buying agency Media Two Interactive.

During a town hall at Digiday’s Future of TV event at the end of April, one media buying agency executive said under Chatham House rules that their clients have asked more about sustainability this year and estimated that over 50% of their clients have wanted to make their ads more environmentally friendly.

“[Sustainability] certainly [won’t be] the only decision making tool by any stretch, but as part of the media plan, [clients] get expected reach, expected attention, but then also expected carbon footprint tied to those media buys,” they said.

Another media buying executive, however, responded during the town hall that they don’t have any clients asking to make their ad campaigns more environmentally friendly. “Sustainability certainly is a topic that we have clients talking about, but in terms of tying it back to the media, that topic isn’t really coming up, so we’re not really exploring it that much,” they said.

And while carbon emissions are not sealing deals, several of the people Digiday spoke with for this story said that oftentimes the most environmentally friendly option is also the most financially friendly.

Financial incentives to sustainability 

An early study conducted by MAGNA and ad-filtering technology company Eyeo showed that lower-carbon producing ad slots are more likely to perform better in brand lift studies. Ads placed on a low-clutter page experienced an 82% increase in aided ad recall and a 62% increase in unaided ad recall, compared to ads on high clutter pages, according to the research.

“That is a classic win-win-win situation,” said Kris Doerfler, director of innovation at CMI Media Group, which is part of WPP, who shared and analyzed the study for Digiday. And while those low-clutter ad slots might not be the cheapest option to buy, they are more likely to hit the advertiser’s campaign goals, he said, making them a better return on investment.

The more ad dollars that go to high-value ad slots could incentivize publishers that aren’t yet selling that type of ad inventory to rethink their ad offerings.

When an advertiser buys from a publisher, “the complexity, particularly in programmatic, of the ad selection process is a significant factor in the carbon emissions and the difference in carbon emissions between different publishers,” said Coghlan. Meaning, a publisher that has 18 ad slots on a page that refreshes every 30 seconds and uses 50 SSPs to sell those ad spots is going to have a significantly higher carbon footprint than a publisher that limits the number of ad slots on a page and primarily sells their ads directly to the advertiser.

Buyers should also cut out made-for-advertising sites that are often operated as content farms, have high ad refresh rates, bad user experience, but somehow get prioritized in the algorithms as highly viewable content, said Kieley Taylor, the global head of partnerships and managing partner at GroupM.

“You tend to see that you’re not hurting your overall performance if you’re carving out that made-for-advertising, kind of junky content,” said Taylor.

At this stage, agencies and advertisers have the most sway orchestrating changes in the digital advertising ecosystem, starting with buyers analyzing which ads they’re putting their clients’ money behind, according to Chris Kane, founder of programmatic supply chain management company Jounce Media.

A high concentration of the problem is caused by a “handful” of these made-for-advertising sites, Kane continued. The top 10 to 20 biggest offenders in the publishing realm over-index on the number of programmatic auctions used per user session by up to 220 times, he said.

“It’s a crazy amount of auctions that come from a small number of publishers that operate really low-quality supply that most brands and agencies don’t want to buy in the first place,” Kane said. He declined to publicly name the publishers that fall in this category. 

And while only about 15-20% of DSP ad dollars go to these made-for-advertising companies, per Kane, they make up as much as half of the overall programmatic bidstream, producing significantly more carbon than most other publishers.

The biggest immediate impact that brands and agencies can have right now is to “just entirely block publishers that are the most egregious sources of carbon emissions,” Kane continued. But the longer term impact that they can have is to stop bidding in most of the programmatic exchanges that exist today.  

“If agencies start to starve certain exchanges of demand, then publishers won’t have incentives to [be there]. And that’s a pretty ruthless, Darwinian kind of thing, [but] that is what needs to happen,” Kane said.

‘Perfect is the enemy of good’

Part of the reason why carbon emissions aren’t a required metric within RFPs for CMI Media Group at this stage is because “we don’t want the perfect be the enemy of the good,” said Doerfler.

There is a fear that setting and holding strict thresholds around carbon emissions at this early stage will create negative connotations around sustainability for publishers that are otherwise willing to try to reduce their carbon output. “We are looking a little bit more at the carrot rather than the stick so far,” Doerfler said.

CMI Media Group is building a threshold model, where media partners eventually will be put on notice for not meeting or falling below a certain threshold for carbon emissions, but could not provide an exact timeline on when it will be rolled out.

As buyers, “we need to make it so whenever [publishers] are reducing or improving their system or are having the high-value inventory, that is what we are going after. We need to reward them for [those sustainable actions],” continued Doerfler.

https://staging.digiday.com/?p=503040

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