With COP28 beginning in the UAE it would be an appropriate time to reflect on the advertising industry’s impact on the environment, as concerns have been growing about the digital advertising industry’s carbon footprint for some time.

According emarketer, the 2023 global ad spend is estimated to be $930BN, with $620BN expected to be digital ad spend. That is an increase of 6-8% year on year, with the majority of this growth expected to be in Digital ad spend (Traditional media ad spend expected to grow less than 1%). Approximately 60% of this digital media will be bought via programmatic platforms.

So what are the environmental impacts of this?

In the 1970’s it is estimated consumers saw approximately 500-1000 ads/day. Today however it is estimated consumers see anywhere between 6000-10,000. Whether it be digital billboards at the bus stop, banner ads in webpages, Youtube, or in-feed on social channels, the opportunities are numerous.

Asset Creation

To get an understanding of the environmental impact we must start at the beginning –  the creation of ads themselves. The competition for consumer attention and improvement in technology means that the complexity of ads has also increased. Advertisers demanding high production value and choosing photography and video shoots on location does not come without the carbon footprint of travel of people and resources.

Additionally with so many different types of ad inventory there are more opportunities to push the boundaries of creativity. The more complex an ad is, the more energy is required to render the ad – we’ve all seen the attention-grabbing 3D digital billboards. 

To put this in perspective a double-sided digital billboard screen at a bus stop consumes four times more electricity than the average British home. On a larger scale, the energy needed to power Times Square in New York has been estimated as enough to power around 160,000 homes (earth.org).

So advertisers need to consider what campaigns they need to run, which creative assets they need to develop and the complexity when trying to limit their carbon footprint.

Media placement

Secondly with two thirds of global advertising spend being on digital media channels, websites, social media, digital out of home or connected TV; 000’s of digital intermediaries are used such as DSP’s, SSP’s, ad exchanges, ad servers – running trillions of real time auctions as we sleep or go about our business. These activities generate approximately 3.5% of global greenhouse gases. A study by ‘Purpose disruptors’ estimated the CO2 emissions produced by the uptake of sales generated advertising in the UK rose by 11% from 2019 to 2022, producing 208 million tonnes of CO2e emissions. This is the equivalent of adding an extra 28% to the carbon footprint of every UK citizen annually.

According to a study we did at Ebiquity with Scope 3, a single digital ad campaign delivering 1 million impressions emits the same carbon footprint as a round-trip flight from Boston to London. To visualise this, if carbon emissions were cigarette smoke they would release a puff of carbon dioxide largest enough to see every time an ad is shown!

Cost

With 000’s of intermediaries involved in creating, placing, buying/selling, optimising where ads land each one has a cost that nibbles away at advertisers budget. The World Federation of Advertiser estimated 60% of each dollar spent is eaten up by intermediaries, that’s taking into account ads landing on pages with non human traffic / ad fraud (10%) and off target or outside the target geography wasting another 10-15% of advertisers budgets. This in turn means advertisers spend more money, buying ads, meaning more energy is used to hit their marketing KPI’s.

Advertisers should audit their digital supply chains to understand who are the intermediaries, what they cost them with a view to improving efficiency and reducing their carbon footprint.

Effectiveness

It is important that advertising campaigns are effective whilst minimising their environmental impact. Digital ad fraud such as advertising on websites no one visits, clickjacking, the use of bots and other fraudulent activities that exist for the sole purpose of obtaining money, is a $50BN/ year industry and also contributes to the environmental impact.

Ads must also be viewable, not multi stacked or hidden off the webpage. One of the main protagonists in ineffectiveness is ‘Made for advertising’ sites which are low cost but feature low quality content and crowd the screen with ads. A study we conducted with scope 3 examined 116 billion display ad impressions from 43 advertisers in 11 countries and ‘Made for advertising’ sites accounted for 15% of digital ad spend. Greenhouse gas emissions are 52% lower per 1000 impression on news sites deemed “trusted” by the Global Disinformation Index.

It is also important that advertisers display on sites that align with their brand values or are ‘brand safe’ to avoid inadvertently funneling money to hate speech, disinformation and sites with questionable credibility such as conspiracy sites.

What can advertisers do to help manage their environmental impact?

  • Measure and benchmark the carbon cost of your campaigns to set a baseline. There are a number of industry tools e.g. ‘ Ad green carbon calculator’. 
  • Manage your assets – the more complex your creative is the more energy is used to render your campaign. 
  • Identify who are the partners in the digital media supply chain – How many intermediaries are used DSP’/SSP’s, Ad exchanges and so on. Ensure your media contracts demand full disclosure of all intermediaries and their costs and audit them to ensure they align to your ESG strategy.
  • Innovate intelligently – consider whether it is worth pursuing the latest innovation such as the metaverse.

Stewart Morrison is the Managing Director of FirmDecisions / Ebiquity, the worlds leading independent media consultancy providing media investment analysis helping over 70 of the top 100 of world’s largest brands, optimise their media effectiveness and auditing their agencies to ensure transparency.