What you need to know:

• Brands are emitting circa 100 million metric tonnes of carbon per annum globally from their media and advertising, according to Scope3 CEO Brian O’Kelley’s estimates - the global aviation sector emits 900 million metric tonnes by comparison.
• “Programmatic has [a carbon footprint of] about 10 million metric tonnes just from the adtech side of the industry,” per O’Kelley, former founder and CEO of adtech firm AppNexus, subsequently sold to ATT&T, wrapped into Xandr and now under Microsoft ownership.
• O’Kelley started Scope 3 to decarbonise digital advertising – and then go deeper into broader business supply chains as governments commit to binding carbon targets (NSW and Victoria have committed to 50 per cent cuts by 2030, the Fed government to 43 per cent on 1990 levels).
• He says industry can’t wait until 2030 to figure out measurement or risk blowing those targets. So brands and the media supply chain need to go for big wins now – and culling adtech ticks more boxes than most.
• That’s because it cuts ad budget waste by stripping out the ads “no human” sees or pays any attention to, removes bad actors, reduces carbon emissions and gives publishers a better share of the spoils.
• O’Kelley says viewability metrics can be gamed and that optimising for attention stops brands spending money on ads that do little or nothing, while reducing emissions – because servers are not firing pointlessly.  
• He also says cutting out print advertising in pursuit of environmental gains is often misguided. Digital has a huge footprint. Meanwhile, he calls out News Corp – in a good way – though struggles to square its bona fide environmental credentials with its editorial stance.
• Suncorp CMO Mim Haysom, NAB’s Operations, Planning & Partnerships lead, Tom Dobson, and Australian Marketing Institute CEO, Bronwyn Powell joined Mi3 on the podcast mics to ask O’Kelley what brands do next – and how fast they can move.
• Get the bigger picture. Listen to the podcast here.

Me, I'm counting

Telstra’s Jeremy Nicholas warned last year that “if you haven't got emissions reductions baked into your business, we are not going to shortlist you as a supplier. It's just not going to happen.”

He’s not the only one sounding the alarm. GroupM’s outgoing investment chief Seb Rennie said in October that brands “will start to make serious investment decisions based on carbon footprint" within 12-24 months. Last week Lucy Formosa Morgan, MD of IPG investment unit Magna, said the same thing.

So what does that mean for marketing, media and advertising? Big change, according to Brian O’Kelley, former AppNexus founder turned Scope3 boss. He thinks the programmatic supply chain is the first place to start – and that marketers should lead the charge, because the rest of the supply chain always follows the money.

He sees a direct link between attention metrics and decarbonising digital media supply chains – and that viewability metrics are part of the problem. Australia could halve the carbon footprint from programmatic advertising within 12 months, he suggests, just by “cutting the crap” out of the system. If that happens, programmatic advertising will be worth it again. At the moment, he says, it’s $100bn brands are largely wasting.

Cut the crap

O’Kelley knows how wasteful the programmatic supply chain is – he helped start it 20 years ago with AppNexus, ultimately acquired by ATT for $1.7bn. Cutting out the bad actors globally that eat budget while delivering little or nothing would cut 5m metric tonnes of carbon a year from the programmatic adtech sector alone based on O'Kelley's sums – maybe more. Plus, it’s the easiest place to start.

“We are not going to get consumers to choose smaller TVs. We are not going to get telcos to change how they wire people’s houses. The things we can control are martech and adtech vendors,” says O’Kelley.

“We can demand shorter supply paths for programmatic. We can stop buying crappy inventory. We can stop buying on ‘made for advertising’ [sites]. If we all stop buying crappy outstream video, I'm pretty sure that would have a massive impact.”

How much of an impact?

“These are estimates … But I think 100 million metric tonnes a year is about the footprint of the global media and advertising space,” per O’Kelley. “To put that in context, the global aviation industry, both commercial and freight, is around 900 million metric tonnes.”

“I guarantee you that if you do any meaningful advertising, you're going to be above business travel [in terms of contribution to corporate carbon emissions]. Employee commuting, you're probably above that. If you look at those numbers, it's probable that media and advertising or marketing and advertising is a top ten category for almost every company in the world, except for the manufacturing sector, because they don't do that much advertising. Anybody in the consumer world has a big carbon footprint,” says O’Kelly.

“Programmatic has [a carbon footprint of] about 10 million metric tonnes just from the adtech side of the industry. Most of that is just waste because of inefficient processing and things like that. I'm not talking about streaming Youtube or BVOD. Those are harder to figure out. I'm talking purely about computers trying to figure out how to target you with an ad. That's a significant amount of carbon that we can address very quickly, which is why we focus on it.”

Cull the intermediaries

O’Kelley says there is no alternative to a major supply chain cull – “Carbon offsets are not going to get us there, inaccurate proxy metrics will not get us there” – but that even small changes can make a major impact. It’s on marketers to drive those changes.

“This has to be led by marketers. We can encourage and incentivise the leaders on the publisher, platform, ad tech side … everyone is just watching to see what you do. So [marketing] is where this starts and this is where it ends.”

Suncorp’s Mim Haysom and NAB’s Tom Dobson ask where to start – and what to do if they had a campaign going live next week.

“Ask your agency for two or three scenarios. What are my trade offs here? What could I do if I was willing to trade a little bit of reach for a little bit less carbon?"

Programmatic is where the easiest wins are to be found, he suggests. 

"Case after case, we've seen that by turning off five to seven per cent of inventory, you get a 29 or 30 per cent reduction in carbon. And so far, we've not seen any impact to performance,” says O’Kelley.

“The reason is because there's so many intermediaries, there's so much money going to non-working media in programmatic that you're actually squeezing out the non working part and your media is actually working better for you.”

“Even by indicating that you want to look at this, we've seen publishers preemptively change their behaviour overnight,” says O’Kelley.”

Acting now is imperative, he says, “because if we want to reduce our emissions by 50 per cent by 2030 [as both Victoria and NSW governments have committed to do] we can’t wait until 2030 to figure it out.”

NAB's Dobson asks how far Australia could decarbonise in the next year, given sufficient collective will. 

"Realistically, we could decarbonise programmatic at least 50 per cent in twelve months. And in a market like Australia, more," says O'Kelley. "There's nothing stopping us except the desire and using a little bit of your heft as marketers to get everyone to go a little bit faster."

Only buy the good stuff

Marketers can forward their own agendas as well as help to deliver board ESG agendas by cleaning up digital ad supply chains, says O’Kelley. The trick is to reframe the debate away from intangibles.

“If I say, ‘You're literally buying things that aren't real [i.e. ads that no human is watching], and if you stop, we will save the environment’, that's a different conversation.

“The real world impact is thousands of servers get turned off. Huge amounts of electricity aren't used, millions of tons of carbon leave the [advertising] environment. So you can actually shut off servers by not buying inefficient supply paths and crap.”

“We can't change Meta, but we can make Meta very uncomfortable. We can't change Google, but we can make Google uncomfortable,” as well as all other players in the chain, says O’Kelley.

In the simplest of terms, ‘crap-free inventory’ is the definition of a ‘green media product’, or GMP, the latest acronym in digital advertising.

“If you're buying from ad exchanges or from any kind of adtech company, tell them you only want their good stuff,” says O’Kelley.

“A green media product is basically saying ‘I don't want the bad carbon players, I don't want made for advertising [sites], I don't want climate disinformation content - just give me the good stuff.' And I think that's broadly my advice to everybody, give me the good stuff.”

Outstream bad, print good?

Just as News Corp has surprisingly robust ESG credentials, given its anti-woke editorial stance, O’Kelley says print advertising can actually be less carbon-intensive than the same ad running on digital news media.

“So by moving away from print, you're actually hurting your emissions,” he says, suggesting that the physical emissions from paper production, print and distribution are outweighed by the power and cooling requirements of data centres (200 terawatt hours globally in 2022, almost as much as Australia’s annual power consumption).

“There are billions of dollars being invested in these servers,” he says. “The digital supply chain is deeply physical, but we don’t experience it.”

But he thinks outstream video running on publisher sites, news included, is one of the worst offenders when it comes to wasted carbon.

“Outstream video is when you're on a website and there's a video in line with the content, often in a spot where you'd usually see a banner. Some of that is integrated with the content. So you're scrolling and a video appears and you keep scrolling, it goes away. Some of that is those annoying sticky ads that run videos on the side of the screen. No human has ever looked at those videos,” suggests O’Kelley.

“They sell them as in-stream … because they run some content and then the video in the content. That is false, that is not real. And the problem is now you're streaming all of this video down to the computer. You're actually causing a lot of bandwidth and a lot of CPU usage.”

Pay attention, not viewability

While outstream ads are one of the things marketers and their agencies should immediately cut, O'Kelley says the same applies to all questionable formats and properties.

“Anything that gets no attention or low attention, stop buying. Anything that's not where your eyeballs are is waste, both from a marketing perspective and from a carbon perspective. That is very simple hygiene.”

Hence he’s a big fan of Karen Nelson Field’s work around attention metrics, while nodding to rival Playground XYZ’s recent report (based on Scope 3 data) that suggests almost two thirds of carbon emissions from digital ads can be culled by optimising for attention.

For the same reason, O’Kelley thinks viewability metrics are a part of the carbon problem. He urges marketers not to look at cost per impression increases when they stop “buying low CPM crap”, but at the higher effectiveness as a result.

“That's the biggest challenge for procurement teams who don't quite understand that dynamic. [The reason those ads are] very viewable is because you literally can't get it out of view, it follows you around. But that's why viewability is a terrible proxy… any ad tech metric like that is going to get gamed,” says O’Kelley.

“All of that goes back to basic good marketing: Buying real content, good ad placements. There is no magic, but it seems very difficult for the adtech and programmatic industry to actually deliver on basic marketing principles.”

Good publishers win?

AMI chief Bronwyn Powell fears that smaller local brands without global resource may ultimately be left with disproportionate costs, if publishers ultimately pass on the bill for decarbonisation.

But O’Kelley suggests that publishers will see more cents in the dollar from hacking back a bloated supply chain that delivers little or no value. It's not publishers that will be picking up the tab

"If $100 billion of our investment is going to programmatic and programmatic is no longer working, we have a problem. If we fix that …. It's not going to cost you anything else. Every time I talk to big publishers, they say, 'I know that people are taking my money. I know that the low quality crap and adtech vendors are taking this money from me. I don't know how to get it back'. I keep saying to them the best way to get it back is to get the buy side – the agencies and the advertisers and brands – to see how much better you are. And right now, they can’t,” says O’Kelley.

“So this is not a financial problem, this is not a technological problem. This is a problem of a status quo … All we have to do is ask a few hard questions and push a few buttons," he suggests.

“I think programmatic advertising will be cost effective for the first time in a long time once we do this work. The last few years, I don't think it's been actually worth the investment. It will be once we're done.”

Get the bigger picture. Listen to the podcast here.