Ad Tech And ESG: Leading Or Lagging?

As an industry that relies heavily on the Internet and digital technology, ad tech is closely associated with a large carbon footprint. The Lean ICT Towards Digital Sobriety report by The Shift Project, a Paris-based “research center on the energy transition”, found that the production and use of digital devices (such as smartphones, TVs and computers) would generate 8%. greenhouse gases in the world. By 2025, reports indicate that individual electronic billboards in Manchester, England will consume more than 11,000 kWh per year, which is more electricity than three households combined.

With research showing that consumers in the UK , US , Europe , Asia Pacific and Australia increasingly prioritize sustainability in their lives and expect the same from the brands they support , staying away from ESG will only hurt business success. With research showing that socially responsible advertising increases brand awareness and return on investment , companies that make an honest effort and aim to prioritize ESG in their operations stand to gain.

While the ESG conversation has grown in recent months, the debate over whether ad tech can actually accept its responsibility to address its environmental impact remains inconclusive. So is ad tech meeting rising consumer expectations and making a big difference, or is ESG still lagging behind? We asked the industry this question to find out.

Businesses must develop sustainable and achievable plans

It is now important for companies to consider ESG in their strategic plans and we have seen a growing movement towards social responsibility in the ad tech industry. In terms of environmental sustainability, several industry players, including Sharethrough, have turned to Green Media Products to play a role in slowing global warming. It's also interesting to see more ad tech companies implementing DEI programs to build stronger, more cohesive teams.

For the world to see ad tech as an ESG-focused industry, it's important that companies develop actionable and achievable plans, deliver on commitments, and engage all employees to achieve these goals. Since ESG is still a new concept to our industry, we are still defining what ESG actually is.

Stacy Parkinson, Vice President, People and Culture, Sharethrough

Brands and agencies can no longer ignore sustainability

As digital content consumption increases and digital advertising delivers better results for advertisers, the size and reach of the Internet is growing. Globally, internet use accounts for 3.7% of global emissions , which is equal to all the airlines in the world. Data processing devices and networks account for the majority of the environmental impact of digital advertising and are expected to grow at a rate of 40% per year, a 40-fold increase by 2030.

A decade ago it was common to see questions about paper recycling initiatives in the media or in technology RFIs - today the questions go much deeper. Brands want to know that the partners they work with not only have the best technology platforms for multimedia enhancements, but also have tangible evidence of how they can reduce their environmental impact.

Brands and agencies can no longer ignore sustainability. As a result, companies will emerge that can at least demonstrate that they have begun to address the problem and are taking significant steps to address its impact.

Maria Chiglakova, Pubmatic

Media spend should be aligned with ESG initiatives

While there have been some great initiatives to integrate ESG into the industry, I think the relationship between advertising and malicious content is still not being taken seriously enough in terms of company reputation. Not only does advertising fund a $2.6bn (£2.3bn) disinformation economy every year ( Newsguard and Comscore ), but this content is directly responsible for the hatred that fuels insurgency, climate change resistance and trade. The environment of the company, the current value of their shares.

Not only that, but many spend their advertising budgets in ways that are directly at odds with their ESG efforts. For example, we regularly find companies with excellent sustainability records for climate-denying content or large pharmaceutical companies appearing on broadcast channels that block anti-purification content. This should be taken more seriously. On the other hand, we see that 70% of Safe Climate's content cannot be monetized by advertising ( Cheq and Media Bounty ), which means that we have public discourse with little financial incentive to create content.

We need media to align with company values ​​and ESG initiatives. The data-aware ad network creates a clear action plan for agencies and brands to follow to help them stop the funding of hate and misinformation.

Harriet Kanjabi, The Conscious Ad Network

This is an important point for ad tech

Many members of our industry come together to explore the supply chain; Lower our carbon footprint and reduce computing power by more effectively matching shoppers with the right experience. Organizations like Scope3 are leading this effort, enabling us all to better understand the impact of ad technology on the environment and how we can move towards more sustainable action.

We are at a tipping point where we all need to do our part to reduce our impact on the planet. An element that is often overlooked in any digital business is the amount of energy used in computing power, thereby increasing carbon emissions. In automated ads, we can do more to reduce repeated ad requests by optimizing the display path, thereby reducing the energy consumed to serve a single ad.

Kurt Donnell, President and CEO of Freestar

Brands can play a big role in getting agencies to take action

I'm a judge on a lot of award shows and when I see the submissions, that's my performance. Once you pull back the curtains, you'll see that it doesn't have much of an effect. It's "cheap" at best. The numbers don't lie. Evaluating different award ceremonies and what other agencies do has made me more critical of our team's work.

Brands can play a big role in getting agencies to take action. When a big brand like Meta asks all of their agency partners to complete a DEI survey to study their team line and suppliers, it shows that diversity and sustainability are important to the company and that they will hold their agencies accountable. take these problems seriously. We need more than that. We need all brands for this . 92% of S&P 500 companies publish sustainability reports. I'd like to see more agencies take an interest in their clients' ESG goals, which will drive agencies to create more focused work to help clients achieve those goals.

Baina Black, R/GA

Read the exclusive interview here .

In order not to fall into green fishing, the business must be perfect

Today's companies need to be very smart about how they communicate about ESG. Many brands will launch 30-second commercials to talk about what they are doing to solve environmental and social problems, but in reality they have created chaos. They use a lot of energy to run technology and store data, and consumers are becoming increasingly aware of this. So to avoid getting caught up in green issues, brands need to engage in ESG conversations in smarter and more sophisticated ways. Instead of talking about brand ambitions, companies should put themselves in the shoes of ordinary people and think about how their technology will add value to them. How does their technology give consumers more choice? So how do you get people on the plane? It is very important that brands consider and take this issue seriously.

Thomas Colster, Goodvertising

Sunlight is the best disinfectant

Its importance among advertisers is growing. In the past year, many of our clients have shown interest in more sustainable media, particularly in reducing the carbon footprint of digital advertising campaigns.

Earlier this year, we partnered with Scope3 to conduct a study comparing emissions from media optimized for attention and exposure. Tests show that improved mitigation media provide 14% less total emissions.

Attention metrics encourage advertisers to buy fewer high-quality impressions, and in general, high-quality media tends to flow through cleaner channels, meaning less waste along the delivery path.

Sunlight is the best disinfectant. The more transparent about emissions, the better advertisers can do.

Transparency and independent verification are essential

Although some progress has been made, the ad tech industry has not prioritized environmental, social and institutional governance. It's important to note that ESG conversations are becoming more frequent and deeper, and companies like OpenX are taking steps to lead by example.

As these conversations become broader and more companies announce their efforts, it is imperative that we demand transparency and independent verification. We need to make sure that the claims are true and have actually contributed to the cause. The only way to do this is to create industry standards that we all adhere to and regularly require that every claim be verified by independent third-party verification.

Priya Bhatia, Vice President of Business Development, SEA | OpenX

Nizar Na Lag Jayi with lyrics | Street | Rajkumar Rao, Shraddha Kapoor | The King of Ashes and Sachin Jigar