Ahead of the environment, social, and governance (ESG) panel at ATS London 2022, Ryan Cochrane, COO at Good-Loop, discusses why industry-wide standards for measuring carbon dioxide emissions are critical in reducing the impact of advertising upon the atmosphere.

If you’ve been in the industry over the last 12 months, you’ll have noticed the inexorable rise of carbon calculators, sustainability groups, Net Zero commitments, and carbon reduction pledges. 

Climate change has become a clear priority within the industry – with vendors clamouring to be the ones to solve the problem. On the one hand, this is fantastic to see. Digital advertising has a significant carbon issue that can only be fixed through coordinated, industry-wide action. 

The internet accounts for around 4% of global carbon emissions – more than the pre-pandemic global airline industry – and is expected to double by 2025, with the digital advertising industry responsible for a sizeable chunk of this. Research carried out at Good-Loop suggests a typical online ad campaign emits 5.4 tonnes of carbon dioxide – half what an average UK consumer produces in a year. And that’s just the ads that are actually served. 

The more normalised the behaviour of measuring and reducing the carbon impact of advertising activity becomes, the faster we can solve the problem and drive our industry towards a clear Net Zero outcome. However, for us to get there, it’s time to agree on the rules of engagement and define a shared standard for measuring carbon in our industry. Otherwise, we very quickly run the risk of doing more harm than good. 

On the creative side, we’ve seen progress with the creation of a universal measurement standard for ad production. But on the media end, if today you use any of the publicly available carbon calculators from leading companies/projects in this space you’ll find you get multiple different answers to the same critical question: ‘How much carbon did this ad emit?’ 

This is to be expected, as work on this project has existed to date in siloes – with many reluctant to share methodology or working practices for fear of eroding competitive advantage. 

For example, some calculators will factor for the weight of the creative but won’t consider the programmatic supply chain. Others will look at all of that, but not the device type or whether the ad was eventually served. But none will factor for everything that the other does. 

This is because, as with any complex issue, there are a million ways to interpret the data. However, the danger here is when agencies and brands have Net Zero commitments to hit alongside traditional campaign goals, very quickly the vendor who reports the lowest emission figure and offset cost will become the one buyers choose. However, that doesn’t necessarily make it the right choice. 

Effectively, Net Zero goals without an independent/collective body to oversee them will risk falling victim to Goodhart’s Law – when a measure becomes a target, it ceases to be useful as a measure. We’ve seen this before in the sustainability space with the Volkswagen emissions scandal. By setting a nitrous oxide (NOx) output limit, the measure of NOx output became a target – the game became ‘get that number as low as possible’, at any cost. 

The more we incentivise or pressurise meeting a specific target, the more we don’t care about the resulting consequence of hitting it. Emissions generated through digital advertising are fine, as long as we’re honest about them, and take reasonable steps to reduce these. Setting Net Zero as an absolute goal, though, could lead to carnage. 

As such, what we need to normalise in this space is not reducing or offsetting our carbon, but simply measuring it – and to do that, we need to come together as a collective to establish what should and shouldn’t be included in the calculations. 

Otherwise, we’ll run into the exact same issue as VW. Sooner or later, we’ll start racing to the bottom just to be able to say ‘Net Zero’ by hook or by crook, instead of caring about how we actually get there. 

While owning and operating your own methodology does of course offer a short-term differentiator in an increasingly flooded marketplace, it in fact has the long-term effect of further undermining trust in an industry that already finds it hard to come by. As of 2021, we’ve returned to our natural place at the bottom of the veracity index. 

Being transparent about how calculations are achieved is a vital part of the process of restoring trust in what we do – especially in the digital ad business, where major concerns over programmatic ad fraud, missing ad spend, and brand safety continues to abate. 

Ryan Cochrane, COO, Good-Loop

It could be argued that shared methodologies eliminate competition, reducing the attractiveness of the market segment to businesses, and in turn removes the urgency to solve the problem. 

But vendors need to remember in a gold rush it’s often far better to sell shovels than go mining – measurement is just one part of the journey, and competing to win this point is in fact the worst fight you can pick. 

Net Zero inventory packages, carbon data visualisation, carbon path optimisation and real-time carbon offsetting – are just some of the suggestions we’ve heard. And any one of these could generate millions in revenue with strong execution. 

There’s no shortage of room in this market, but let’s compete in the right spaces, in the right way. Our industry has a surprisingly good track record for standardisation at a global level, with success stories such as IAB ad sizes and VAST. It’s time carbon measurement joined the list.

ATS London 2022 will take place on 14th and 15th June at Central Hall Westminster. Tickets and further information are available via the ATS London 2022 event hub.