Over the past 10 years, marketers, agencies, publishers, and adtech vendors have had to deal with complex collective challenges around consumer privacy, misinformation, viewability, fraud, and diversity and inclusion. Over the next 10 years, the $600 billion advertising industry will have to play its part in fighting climate change. A February 2023 IAB Europe report showcased that sustainability is already among the top digital advertising challenges for marketers after cookieless targeting and measurement. A World Federation of Advertisers survey recently highlighted that sustainability will become the most important part of a CMO’s role in five years’ time.
Brands, agencies, media, and tech companies are acting to reduce the marketing and advertising industry’s carbon footprint. Doing so isn’t only the new industry challenge — it’s a way to differentiate. While defining standard data measurement and KPIs for digital and media decarbonation remains a work in progress, companies that tackle and anticipate the challenge now will gain a competitive advantage.
As you examine your carbon footprint, however, make sure that you consider more than just your own advertising and marketing investments because:
- The direct impact of your marketing investments is just the tip of the iceberg. Indeed, the carbon footprint of ads is a negligible part of the equation. Advertising and content production, distribution of online and offline marketing and ad assets, data consumption, and device usage represent the direct impact of your marketing investments. For many industries such as automotive, CPG, or telecom, marketing’s direct impact is negligible.
- The indirect impact of marketing contribution to sales is the elephant in the room. Product, packaging, and distribution play a much bigger role than marketing investments for most industries.
- The long-term impact is the most important but the hardest to measure. Beyond the direct and indirect impact of marketing investments, advertising and marketing play a huge role in shaping the collective culture and imagination. It’s the CMO’s responsibility to avoid reinforcing existing stereotypes about consumerism and to invent a positive way to highlight sustainable lifestyles.
While It’s Still Early Days, Marketing Must Make Strides Toward Measurement
Forrester could only find various estimates analyzing digital advertising’s carbon footprint, but there’s no recent, independent, and trustworthy assessment of the total carbon impact of offline and online marketing investments. CMOs should be aware, however, that different industry initiatives are making good progress. It’s also realistic to expect an agreement on sustainability data frameworks and standards in the next 12 to 18 months because:
- Offline advertising and marketing have a negative environmental impact, but online marketing damages the planet, too. While ads are only a subset of total internet activities, carbon emissions are massive due to the electricity used by the millions of servers that bid to fill ad space in real time, load creatives, and publish content, as well as the electronic devices used to consume it.
- CMOs can’t compare the carbon effects of different campaign strategies. If you’re launching a global multimedia campaign with several creative and media agencies, measuring carbon emissions across its entire lifecycle is a nightmare. At a country level, each firm has its own calculator, and there is little consensus on the exact scope of the data, framework, and methodology to use.
- The industry is starting to speak the same digital sustainability lingua franca. This is especially true with initiatives such as Ad Net Zero.
- The marketing community must coordinate faster to anticipate tighter regulation. France is leading the pack here, with stakeholders coordinating to launch an open source repository to harmonize a joint approach.
Take Six Steps To Reduce Your Marketing Function’s Carbon Footprint
The marketing community is waking up to the environmental crisis, but it must accelerate its efforts. CMOs can’t afford to wait to tackle this challenge. “We’re in an era of ‘Show me, don’t tell me,’ so the more you act, even in a small way, the better. Consumers want to know what you’re doing now, not in five years. That’s an important shift,” says Valérie Hernando-Presse, CMO at Danone.
To confront marketing’s wider environmental impact, Forrester recommends implementing a holistic environmental sustainability blueprint. The blueprint includes tactics to avoid greenwashing and outlines how teams must master six key levers: purpose, value proposition, ecodesign, cocreation, cognitive and behavioral sciences, and story-making. When it comes to reducing the carbon footprint of the marketing function itself, you can act now and:
- Expand your existing measurement approach and optimize beyond ROI.
- Showcase the marketing ROI of your sustainability efforts.
- Use marketing mix modeling to analyze how sustainability impacts results.
- Prioritize reducing your creative and production assets’ carbon footprint.
- Add sustainability criteria to your RFP process and challenge your partners.
- Educate and upskill your marketing, media, data, and communication teams.
You can access Forrester’s latest report on this topic.* Clients, feel free to set up a guidance session or an inquiry if you want to go into the details of what it means for you.
Hopefully, marketers, agencies, and technology players gathered for the Cannes Lions will not just be talking about the metaverse and generative AI but will also seriously tackle this industry challenge. It is time to be really creative.
*I’d like to take the time to thank the many individuals from the following organizations who generously gave their time during the research for this report: Ad Net Zero; Association of National Advertisers; BL évolution; Caisse des Dépôts; Coty; Diageo; Dentsu; Ebiquity; Ekimetrics; Fortuneo; GroupM; Guerlain; Heineken; IAB Europe; IMPACT+; Jacques-Olivier Barthes; Nestlé; Observatory International; Orange; Publicis France; Reckitt; Salesforce; SRI France; Scope3; Sidièse; Teads; Union des Marques; and World Federation of Advertisers.