Are you using the right KPIs to reduce your digital advertising emissions?
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Picture this: you’re running digital advertising campaigns, and you’re aware of their environmental impact in terms of greenhouse gas emissions.
As a responsible advertiser, agency or adtech company, you’ve taken action by tracking sustainability KPIs for your ads and using them to guide your decisions.
However, lately, you’ve been puzzled by something.
You have two digital ad campaigns running, let’s call them Campaign A and Campaign B. Both have the same budget of $100k. Campaign A features eco-friendly banner ad formats with relatively small file sizes, while Campaign B features videos with high production values and large file sizes. In both campaigns, you’ve focused on optimising for CO₂eq per 1000 impressions.
Based on the formats themselves, you’d expect the banner ads to generate about 2g of CO₂eq per 1000 impressions, whereas the video ads should generate around 10 times that.
After a few weeks of running and optimising these campaigns, and having spent the full budget on each campaign, you sit back to take stock.
Looking at the campaigns more holistically, you’re surprised to see that another metric, ‘total campaign emissions’ is telling a different story.
While the CO₂eq per 1000 impressions metric is as expected (Campaign A is lower than Campaign B), the total emissions are inverse — Campaign A’s total emissions are higher than those of Campaign B.
Campaign A’s total emissions (measured in kilograms of CO₂eq emitted) is at 200 kg, whereas Campaign B has emitted 166 kg of CO₂eq.
How could this be? Shouldn’t Campaign B, with its video formats and larger file sizes, be the higher emitter overall? Are the eco-conscious ad formats in Campaign A just not working correctly?
Ensure you’re tracking the right sustainability KPI
In the example above, the higher total emissions from Campaign A are a result of its lower CPM meaning more impressions were delivered than Campaign B, for the same budget spent.
Campaign B had less impressions than Campaign A which meant that, even though its video formats emitted more for each individual impression, the total emissions were lower.
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Making digital advertising sustainable: Measuring the right thing
So, you’re committed to doing what’s right for the environment, but you now understand that measuring digital advertising sustainability is not as simple as first thought.
Here are two key considerations to ensure you genuinely reduce the environmental impact of your ads:
- Focus on the crucial metric: CO₂eq per 1000€/$/£ spent. Often, there’s a tendency to concentrate on CO₂eq per 1000 impressions in discussions around sustainability. However, as explained earlier, this can be misleading. For a variety of factors around formats, performance, optimisation, timing, and more, lower CPMs cause total emissions to be driven higher. By prioritising and remaining vigilant on the GHG emissions per 1000€/$/£ spent metric for each campaign, you can effectively reduce emissions related to your ads.
- Monitor total GHG emissions across all ad campaigns diligently: To ensure your digital ads are genuinely contributing to climate change mitigation, it’s essential to measure reductions across all your campaigns. Celebrating a significant reduction in GHG emissions in one campaign becomes irrelevant if you have several others causing emissions to rise. It is therefore important to measure all campaigns from year to year to measure and reduce the total emissions of your communications. Viewing and measuring your digital ad campaigns as a whole is critical to ensuring your efforts to reduce emissions are not in vain.
Introducing the Rebound Effect
Going further with this concept, the rebound effect is a phenomenon observed in various industries as technology advances. It has also been called the Jevons Paradox, after 19th century economist William Stanley Jevons.
He noted in a seminal book, The Coal Question (1865), that efficiency improvements in the use of coal in Scotland between 1830 and 1863 led to an increase in its demand, not a decrease as might have been thought.
Let’s take another example to illustrate the concept: home insulation. As insulation technology improves, homeowners may opt for better insulation or more efficient heating boilers. In theory, this should result in lower heating costs.
However, if homeowners respond by keeping their homes at higher temperatures or extending heating periods, the energy savings may be nullified or diminished.
There’s also the possibility of an ‘indirect’ rebound effect. For instance, if homeowners save on their heating bills due to better insulation technology, they might decide to spend the saved money on a holiday involving air travel. As air travel is energy-intensive, the energy savings from heating would be offset by increased energy consumption of a different kind.
The same principles apply to digital advertising
In the example with Campaign A and Campaign B above, a direct rebound effect may occur if the advertiser were to optimise Campaign A by progressively shifting budget to the best supply websites. This improved targeting could result in better delivery and reach, meaning a lower CPM. If budget remains the same, this also means more impressions and higher CO₂eq emissions.
An indirect rebound effect could occur if the advertiser, for example, reduced their spend on Campaign A to mitigate its higher number of impressions, but then invested that extra budget in new high-quality video creative that required crews to be flown in for the shoot.
Both direct and indirect rebound effects can occur in digital advertising, requiring advertisers to ensure their optimisation efforts truly make a difference in mitigating climate change.
In conclusion, understanding and addressing the rebound effect is crucial for advertisers aiming to reduce the environmental impact of their digital advertising campaigns.
By focusing on the right metrics, namely CO₂eq per 1000€/$/£ spent, and closely monitoring total emissions across all campaigns, you can make informed decisions that contribute to mitigating climate change.