Going green: It’s time the programmatic supply chain cleaned up its act

Alba Marco
By Alba Marco | 30 January 2024
Alba Marco.

A poorly run display advertising campaign can cause the same carbon emissions as a one-way flight between Paris and New York. If adland wants to get serious about cutting its carbon emissions, streamlining programmatic supply chains and practices can help slash emissions, while dialling up performance, argues Alba Marco, Head of Supply Partnerships for Yahoo AUSEA.

World leaders recently descended upon Dubai for the UN’s COP28 climate summit, with King Charles III opening the conference by warning that we are “dreadfully far off track” in cutting down carbon emissions.

The urgency of his message and delivery was palpable, and got me thinking: what can adland do to get its own house in order?

As the world hurtles towards catastrophic global warming, with climate scientists predicting we will exceed a target rise of 1.5 degrees Celsius by 2030, it is clear that urgent action is needed.

So many businesses espouse their green credentials in their marketing, but how many understand the contribution to the problem their advertising could be contributing? According to the consultancy Fifty-Five, the digital ecosystem is responsible for about 3.5% of global carbon emissions and is growing its carbon footprint at a faster rate than the aviation sector.

Scope3, which measures the carbon footprint of digital advertising, calculates that each year display and streaming advertising emits 7.2 million metric tonnes of CO2 globally, which is the equivalent of the electricity usage for 1.4 million homes.

By country, Australia’s annual digital advertising contribution is 199,000 metric tonnes, well below the heaviest emitter, the US (2.9 million), but greater than many other countries Scope3 assessed.

Digital display advertising contributes more than half of these emissions (3.8 million metric tonnes). For display web advertising, three quarters of its emissions come from the ad selection process, which includes ad tech vendors such as ad servers, DSPs, SSPs, verification firms, programmatic trading exchanges and cloud-based platforms. (Scope 3 State of Sustainable Advertising Report)

Publishers that sell ad inventory are under growing pressure to reduce carbon emissions by advertisers and media buying groups, such as WPP’s GroupM, which plans to decarbonise its media supply chain by 2030. In fact, GroupM is already advising clients on low carbon emitting channels and I have heard there has been a rise in the number of media buying briefs that now consider low carbon media as a KPI.

Other media buying holding companies (Omnicom, Publicis Groupe, IPG Mediabrands and Dentsu) are also placing low carbon media high up their agendas due to client demand.

Doing better isn’t actually that hard
The programmatic supply chain is one area in which adland can make a serious impact in reducing carbon emissions by adopting best practices - and the good news is it isn’t difficult and should even make your advertising more efficient.
In recent years, header bidding and private marketplaces have helped improve the efficiency of programmatic trading, but there are still cases where the tech is opaque and being misused.

The next evolution will see more direct programmatic trading that cuts down some of the intermediaries and bad actors clogging up and polluting the programmatic supply chain.

Demand Side Platforms (DSPs) – such as our own Yahoo Advertising – offer more choice for advertisers as they’re given the option of either accessing more direct paths to supply via direct-to-publisher solutions like Yahoo Backstage or through more traditional supply paths, using Supply Side Platforms (SSPs).

Direct-to-publisher means that there are far fewer adtech players sitting in between the inventory publishers want to sell and the advertisers who want to buy it, which can reduce carbon emissions throughout the process because there is simply less needless computing power being drained.

The New York Times, which is ranked by Scope3 as among the top 10 publishers when it comes to low web display carbon emissions, produces about 13g CO2 ePM (grams of carbon dioxide equivalent per 1000 impressions). The Scope3 benchmark for ad selection emissions across display advertising is around 255g CO2ePM, while an example of poor (and sadly not entirely uncommon) practices can burn 970g CO2ePM.

An advertising campaign that employs bad programmatic supply chain practices and sells one million impressions online produces the same emissions as one passenger would in a one-way flight between Paris and New York.

The difference between good and bad is stark, hugely damaging, but not complicated.

Best practices include limiting the number of partners plugged into the supply chain, not authorising any reselling of inventory, grouping ad units per request and throttling low win rates demand paths.

A win-win
The good news is that going green doesn’t hinder the performance of display advertising, in fact it can often produce better results for advertisers and publishers.

On the buying side a sustainable supply path can simplify and improve transparency, which helps drive media buying efficiencies and allows advertisers to curate a premium marketplace.

This year, healthcare and pharma giant Sanofi worked with Scope3 to reduce its media carbon emissions by identifying and reducing high carbon inventory, implementing exclusion lists (such as Made For Advertising websites) for campaigns and inclusion lists that reward low carbon high performing publishers.

In the UK, this led to a 56% reduction in campaign carbon emissions without any material impact on performance. In Spain the reduction was 30% and the activity is going to be rolled out across more than 50 markets.

For media owners, providing low carbon inventory and programmatic pathways will be critical for those that want to attract larger advertising budgets from brands and media agency groups.

Cutting media emissions across the supply chain is not just the right thing to do, it’s good for business and the long-term sustainability of the industry.

So let’s make 2024 the year we clear up the supply chain, it makes complete sense.

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