Table of Contents
- Introduction
- The Importance of Product-Level Programmatic Emissions
- Cedara's Research Insights
- Implications for the AdTech Industry
- Practical Steps for AdTech Platforms
- Conclusion
- FAQ
Introduction
In today's digital landscape, sustainability is becoming increasingly pivotal, particularly within sectors like digital marketing and advertising. One might wonder how environmental concerns intersect with realms driven by technology and data. This leads us to the concept of product-level programmatic emissions and their considerable footprint on the total greenhouse gas (GHG) emissions of AdTech platforms.
Recent conversations have highlighted the need for standardization in environmental performance estimations. For brands, a reliable framework for assessing the carbon footprint of their digital ads is not just beneficial—it's imperative for making eco-conscious decisions. But what does this entail for the broader AdTech ecosystem, and how do emissions at the product level fit into the larger picture?
In this blog post, we'll explore the significance of product-level programmatic emissions within the digital advertising supply chain, delve into the latest insights from Cedara's research, and discuss the industry’s response, particularly through initiatives by IAB Europe. By the end, you’ll gain a clear understanding of the current state of programmatic emissions, the insights from recent research, and the tangible steps being taken to mitigate environmental impact.
The Importance of Product-Level Programmatic Emissions
The Value Chain Perspective
Digital advertising operates on a complex value chain involving multiple stakeholders, from advertisers and publishers to technology providers and data managers. Programmatic advertising, which automates the buying and selling of ad space, has revolutionized this landscape. However, the automation process, including real-time bidding and ad serving, is energy-intensive, contributing to significant GHG emissions.
Brands are increasingly recognizing the need to streamline environmental performance estimations as a key component of reducing their carbon footprints. Accurate measurement of emissions at the product level allows brands to identify and mitigate the environmental impacts associated with specific ad campaigns.
The Need for Standardization
The quest for standardized emissions models stems from the current disparity between various estimations. Without a common basis, companies struggle to implement effective optimization strategies, leading to inefficiencies and heightened environmental impact. A unified model would enable solutions providers to focus on reducing carbon emissions with greater certainty and precision.
Cedara's Research Insights
Scope 1-3 Emissions Explained
Cedara’s recent report, "Scope 1-3 Emissions Measurement for Digital Media Businesses," sheds light on the intricate dynamics of programmatic emissions. According to the GHG Protocol, emissions are categorized into three scopes:
- Scope 1: Direct emissions from owned or controlled sources.
- Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company.
- Scope 3: All other indirect emissions that occur in a company's value chain, including ad delivery and network utilization.
The Findings
Cedara’s report underscores the significant role of scope 3 emissions within the digital advertising value chain. A large portion of programmatic ad platforms' total emissions fall under this category, driven primarily by ad delivery and network utilization.
The report advocates for a dual approach, combining product-level emissions estimation with broader enterprise-level insights. This holistic perspective not only highlights the larger, often overlooked, sources of emissions but also suggests paths for meaningful reductions.
Implications for the AdTech Industry
Embracing Standards
Adopting upcoming standards for GHG intensity assessments and harmonized modeling frameworks is critical. These standards will help clarify carbon footprints across the value chain and facilitate targeted action towards major sources of emissions.
By embracing such frameworks, AdTech platforms can align with voluntary reduction targets, like those set by the Science-Based Targets initiative. This alignment promotes transparency and collaboration, fostering an industry-wide movement towards sustainability.
Industry Collaboration and Transparency
Efforts to reduce the carbon footprint of digital advertising are not isolated to individual companies. Industry-wide collaboration, spearheaded by organizations like IAB Europe, plays a crucial role. Through committees and task forces focused on sustainability, IAB Europe drives initiatives that address emissions estimation, carbon footprint management, and voluntary reduction commitments.
Practical Steps for AdTech Platforms
Improving Measurement and Reporting
To combat the environmental impact of programmatic advertising, AdTech platforms must refine their measurement and reporting mechanisms. This involves adopting accurate and standardized methods for estimating GHG emissions, particularly focusing on the frequently underestimated scope 3 emissions.
Engaging in Industry Initiatives
Participating in industry-wide sustainability initiatives, like those promoted by IAB Europe, allows platforms to stay informed about best practices, emerging standards, and collaborative opportunities. Engaging in such initiatives ensures that platforms are not only compliant with evolving regulations but also proactive in their sustainability efforts.
Focusing on Supply Path Optimization
Supply path optimization (SPO) involves streamlining the supply chain to reduce inefficiencies and unnecessary intermediaries. By implementing effective SPO strategies, AdTech platforms can decrease the energy consumption associated with ad delivery, thereby reducing their carbon footprint.
Leveraging Technology
Technological advancements, such as artificial intelligence and machine learning, can enhance the efficiency of programmatic ad delivery. These technologies can predict optimal bidding strategies and ad placements, reducing unnecessary ad rotations and energy usage.
Conclusion
As digital advertising continues to evolve, the need for sustainability within the industry becomes increasingly pressing. Addressing the environmental impact of programmatic advertising through standardized emissions models, collaborative industry efforts, and technological innovations is essential.
Cedara’s research provides valuable insights into the complex dynamics of programmatic emissions, offering a path forward for more accurate and impactful reductions. By understanding and mitigating the carbon footprint of digital ads, the AdTech industry can take meaningful steps toward a more sustainable future.
FAQ
What are product-level programmatic emissions?
Product-level programmatic emissions refer to the greenhouse gas emissions generated by the automated processes involved in buying, selling, and delivering digital advertisements.
Why is standardization important in emissions estimation?
Standardization in emissions estimation ensures consistency and accuracy, enabling brands and solutions providers to make informed decisions and implement effective strategies to reduce the carbon footprint of digital advertising.
What is the role of IAB Europe in sustainability efforts?
IAB Europe facilitates industry-wide collaboration on sustainability initiatives, promoting best practices, emerging standards, and shared goals for reducing the environmental impact of digital advertising.
How can AdTech platforms reduce their carbon footprint?
AdTech platforms can reduce their carbon footprint by adopting accurate emissions measurement methods, engaging in sustainability initiatives, optimizing their supply chains, and leveraging advanced technologies to enhance ad delivery efficiency.
