Ad Tech and the Environment: The Move to Go Green

When it comes to scrutiny around sustainability and climate change, the digital advertising sector has—until recently—flown under the radar. It’s even been hailed by some as a low-carbon alternative to traditional print media. But is it really that simple?

The online world continues to burgeon, with people around the world glued to their electronic screens, creating endless opportunities for energy-consuming ads. This is exacerbated by the automated buying and selling of inventory enabled by programmatic trading, which sees trillions of auctions take place every day without an ad being served. In other words, carbon emissions are high without anything being delivered. 

It’s estimated that the internet produces about 4% of the total greenhouse gas emissions worldwide—double that of the global aviation industry (calculated to be 2%). Digital advertising is a major factor within that, with GoodLoop research indicating that at 5.4 tonnes, a typical online ad campaign emits almost half the carbon dioxide produced by the average UK consumer in a year. 

By COP26, held in Glasgow in 2021, it was hard to ignore these facts and the clamor of voices accompanying them. It was widely recognized that the digital ad industry had to take action to mitigate its significant contribution to global warming. 

Environmental sustainability has only become more pressing in that time and the advertising industry has responded with the rapid development of some clever and innovative solutions. But for all the headlines and good intentions, it can be hard to gauge where the ad tech industry is now in terms of concrete actions.  

To find out, we undertook some research. 

By the numbers 

The good news is that in our survey of the BidSwitch customer base of top global ad tech platforms across supply and demand, 82% of respondents have launched at least some kind of environmental sustainability initiative.  

Not only that, but 68% report that the primary driver for their activities is to reduce environmental damage and support the transition to a low-carbon economy, thereby creating a more sustainable future for the planet and its inhabitants. 

More than that, the importance of being able to work from a baseline provided by actionable data is understood, with the majority (70%) of ad tech companies already measuring their carbon emissions annually or planning to do so (22% and 48% respectively). 

Going green is good for business 

With the growing volume of public discourse about tackling climate change, it's increasingly recognized that policies to reduce carbon emissions are not just desirable, but necessary to be competitive, as people require their suppliers to be ‘green’. 

So, while the biggest primary driver for sustainability initiatives is to reduce environmental impact, respondents are also pragmatic. More than half (54%) say green schemes are motivated by engaging clients and consumers to drive business growth, 43% list meeting the green and sustainability requirements of their clients and stakeholders, and 52% want to enhance their reputation, mitigate risk and drive sustainability innovation. 

Greening the supply chain 

The powerful impact that the supply chain has on carbon emissions is taken into account when looking at ways to make a difference—probably unsurprisingly, given the interconnected nature of the industry. 

84% of people responding to the survey say learning more about CO2 emissions related to their partner’s trading activities would be valuable in supporting their own sustainability initiatives. 

And 29% list moving to a more direct supply-sourcing strategy when asked about adopting green media trading initiatives. Similarly, when identifying the sustainability practices in which their company engaged, 28% of respondents cite reducing the number of ad tech partners they work with and 15% are re-assessing partner relationships based on their sustainability practices. 

Carbon cutting across the organization 

Ad tech companies are also using a variety of tools to support their sustainability objectives. 

The most popular action of 77% of the respondents is the optimization of infrastructure to reduce the emissions related to processing. The sheer size and scale of the bidstream was also recognized as a contributory factor, with 67% of respondents reducing the volume of bid requests distributed or received and 28% minimizing the volume of data passed into the bidstream; data’s contribution to carbon emissions was also noted, with 19% of respondents minimizes the data they use to execute campaigns. 

Other sustainable media trading initiatives included 29% buying or selling via green private marketplaces (PMPs) and 12% blocking websites deemed to be carbon offenders. 

But some activities transcend digital advertising—corporate office and travel policies are being evaluated by 46% for example, clearly in recognition of the major impact these activities have on the environment. 26% report that they are offsetting carbon emissions through various carbon capture initiatives, and 25% are setting carbon reduction targets over a given timeline. 

Cause for concern? 

Although significant progress has been made over the past two years, not least in the belief that action needs to be taken and there is no time to lose, our research revealed areas that are potentially worrying. 

Nearly a fifth (18%) of respondents are not pursuing any environment sustainability initiatives for example, and 7% do not plan to adopt green media trading initiatives. Questions also arise around the 30% that are not currently measuring their carbon emissions annually, which will make it very difficult to determine what, if any, progress is made. 

The big picture is complicated 

Our study also resulted in some contradictions.  

For example, despite most respondents wanting to know more about their partners’ carbon emissions to assist with their own green initiatives, only 15% report re-assessing these relationships based on sustainability practices. 

Buy and sell side also differ in their activities. 23% of SSPs are currently undertaking environmental sustainability or green initiatives, compared to 9% of DSPs, and 11% that are both DSPs and SSPs. 

The explanation for such discrepancies probably lies in it being hard to know where to start—perhaps indicated by the 30% of people saying that although they are looking into green media trading initiatives, they haven’t yet adopted this practice. 

The concept of net-zero digital advertising and how to get there is new, highly complex, and fast-paced, and the recognition that there is no time to lose has resulted in a broad range of solutions being brought to the sustainability table. However, this and the fact that the thinking behind many schemes evolves rapidly, can make it tempting to wait until the next ‘better’ option comes along - something ‘right’ today may end up being viewed as counterproductive in a few months’ time. 

Decarbonizing the digital advertising industry is down to all of the many and varied participants that make up the ecosystem. Although the picture is still unclear in places, and there are areas where far more needs to happen, the BidSwitch state-of-the-industry report would indicate that we are moving collectively in the right direction. 

For the complete picture of sustainability and green media trading across the digital advertising ecosystem, download the full report Going Green: How Ad Tech is Approaching Environmental Sustainability.