The advertising industry started paying attention to sustainability in 2022.
“Some switch flipped,” said Brian O’Kelley, an ad tech OG and co-founder of sustainability startup Scope3.
Interest in going green really picked up during the second half of 2022.
There was “a big uptick, almost from 0 to 60,” said Curt Larson, chief product officer at ad exchange Sharethrough, which partnered with Scope3 earlier this year to launch private marketplaces for green inventory.
At the same time, multiple agency holding companies have set mandates tied to sustainability goals for 2023.
The specific catalyst for this industrywide embrace of all things green now is unclear. It’s not as if the climate only just started warming up in 2022.
But Johanna Bauman, CMO of PubMatic, has a theory as to why the times they are a-changin’: consumer behavior.
As consumers increasingly prioritized sustainability, brands and agencies followed suit, which “snowballed” into the rest of the industry, Bauman said. “[Money] is a forcing function of moving forward.”
This momentum will only grow in 2023 now that “the foundation is laid,” said Kieley Taylor, global head of partnerships at WPP-owned GroupM.
But there are challenges. Decarbonization remains “a multiyear journey,” particularly given the challenging macroeconomic environment, and companies are still figuring out how to balance “between efficacy today and making the right choice for tomorrow,” said Taylor, who also sits on the 4A’s Sustainability Task Force.
Pledging allegiance to the planet
In one sign of ad land’s sustainability surge, agency pledges have proliferated.
For instance, WPP announced a net-zero carbon emissions commitment on Earth Day 2021. The Planet Pledge group, initiated in 2021 within the World Federation of Advertisers, now has dozens of signatories and partners. GroupM, PubMatic, Publicis, Havas, Dentsu and consumer goods brand Reckitt are among the more than 80 companies that joined climate action initiative Ad Net Zero’s global group in 2022.
In November, GroupM formed a media decarbonization coalition to develop consistent industrywide measurement standards for ad-based carbon emissions.
And thousands of organizations have signed on to the Science Based Targets initiative’s (SBTi) commitment to curb greenhouse gas emissions. Dentsu hatched a plan with SBTi to hit a net zero target by 2040.
“This type of change does not happen overnight, but we are committed to do the hard work and to bring our clients with us on this journey,” said Anna Lungley, chief sustainability officer at Dentsu International.
Shoring up standards
The pledges may be pouring in, but there hasn’t been a lot of concrete action yet.
“In the last six months, we’ve seen so much activity, but we still haven’t seen a major company start using carbon data to rapidly decarbonize their supply chain,” Scope3’s O’Kelley said. “There’s a lot of folks who’ve said, ‘We’re going to.’”
The lack of universal standards for measuring carbon emissions is one major obstacle to achieving net zero across the ad industry. It’s hard to reduce something you can’t accurately quantify and hard to set shared goals if you can’t agree on what sustainability means.
“Where do you start, and where do you reasonably end?” said GroupM’s Taylor.
Unsurprisingly, greenwashing continues to be an issue. For example, to make their numbers look good, media agencies might selectively minimize their Scope 3 contributions or quietly leave media purchasing out of their sustainability metrics.
Word choice can also deceive. To put the kibosh on misleading environmental marketing claims, the FTC is now “seeking public comment” on a forthcoming edition of its Green Guides, last updated in 2012.
And carbon offsets pose problems of their own because they’re difficult to audit, Sharethrough’s Larson said.
Since offsets are hard to measure, the industry should use them as a “last resort” and focus on cutting emissions instead, O’Kelley said.
“Planting trees isn’t going to cut it – we need more permanent ways of removing carbon,” he said. “Anybody who says ‘I offset’ … I’m extremely concerned about how they did it. Who are they using to monitor it?”
While “sexy” technologies such as direct air capture and biomass burial have gained traction, “nothing is really at scale,” O’Kelley said. “And what’s the incentive for companies to do the right thing and really invest ahead of technology here?”
So, what’s a brand that wants to go green – and hold itself accountable – to do? Set sustainability KPIs and reporting goals, according to Bauman.
PubMatic is modeling its sustainability strategy after its approach to DE&I. The company concentrated on internal learning and benchmarking in 2022 but will soon turn its attention to setting quantifiable goals. PubMatic also plans to publicly share data tied to its efforts.
“2023 is going to be the year that we really set the course for change,” Bauman said.
Keep your circle tight
But there are also changes that ad tech companies, advertisers and publishers can make today.
Given the opacity of the programmatic supply chain and all the middlemen that get their cut, transparency around fees, operations, relationships and data sharing will help create more efficient supply paths, according to Bauman.
A more direct and transparent supply chain is better for the environment and can also be better for business.
Buyers can also reduce their carbon footprint by consolidating their partnerships.
“Most buyers, particularly scaled buyers, are really focused on consolidating the downstream technology partners that they work with,” said Sean Buckley, chief revenue officer at Magnite.
Over the past six to 12 months, Buckley said he’s seen more clients vetting and winnowing their partners to a smaller set.
Not perfect. Progress.
But the status quo can be hard to shake. Real-time bidding was developed to generate revenue, not protect the environment.
As a foundational figure in RTB, O’Kelley has said he is keenly aware of the environmental fallout from the industry he helped bring to life.
These days, he spends much of his time making the “business case” for decarbonization. More than 30 agencies, publishers, advertisers and ad tech companies have integrated Scope3’s data into their work.
I think the industry is ready – now we just have to go do what we’ve all said we’re going to do,” O’Kelley said. “I’m not asking for perfect. I’m asking for progress.”
