Damien Thomson is the CEO and co-founder of Net Zero Media, a technology company that has been purpose-built to effectively measure and analyse the emissions associated with all media and marketing activity.
While the President of the United States of America promises to “drill, baby, drill“ for oil and gas, the rest of the world is focusing on ways to transition to a sustainable energy model.
However, when discussing how to minimise the impact of the climate crisis, much of the conversation focuses on industries such as transport, construction, energy, and the more obvious greenhouse gas emitters. The role media and advertising play is often overlooked. Yet advertising produces more GHG emissions than the aviation industry.
Damien shares his perspective on carbon measurement’s current and future state in media and advertising and the role each of us must play.
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I don’t know if government should be too involved in the consumer side. I think consumers will ultimately vote with their feet when it comes to sustainability practices of brands.
Transcription:
Darren:
Hi, I’m Darren Woolley, founder and CEO of TrinityP3 Marketing Management Consultancy, and welcome to the new year, and to Managing Marketing. A weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners
If you enjoy the Managing Marketing Podcast, please either like, review, or share this episode to help spread the words and wisdom of our guests each week.
Now, while the president of the United States of America promises to drill baby drill for oil and gas, the rest of the world is focusing on ways to transition to a sustainable energy model. However, when discussing how to minimize the impact of climate change, much of the conversation focuses on industries such as transport, construction, energy, and the more obvious greenhouse gas emitters.
The role of media and advertising is often overlooked. To share their perspective on the current and future state of carbon measurement in media and advertising. Please welcome to the Managing Marketing Podcast, the CEO and co-founder of Net Zero Media, Damien Thomson. Welcome, Damien.
Damien:
Thanks for having me, Darren.
Darren:
It is true, isn’t it, that for a lot of people, they probably don’t think of advertising as any more polluting than just being ugly and filling up the public spaces, do they?
Damien:
Absolutely. I think it’s very much overlooked particularly by consumers in the general public. They see industries like mining, construction, even aviation as a larger emitter of greenhouse gas emissions. But the reality is you look at the advertising industry and digital alone contributes more to greenhouse gas emissions than aviation alone.
Darren:
And that’s the thing, isn’t it? That the move to digital, the move to electricity driven advertising ecosystem has actually had a huge impact because we are still quite slow in that transition to sustainable sources of energy, aren’t we?
Damien:
Absolutely. I mean, the digitization of the advertising industry has led to an acceleration in greenhouse gas emissions rather than the opposite. We’re trying to be more efficient and effective at what we’re doing and getting a message out to consumers in a more targetable, addressable way. The reality is that’s contributing to the problem in a faster rate.
Darren:
Now, you said that advertising in Australia is a bigger contributor to greenhouse gas than aviation. That’s pretty shocking for people. How’s that measured?
Damien:
Look, it’s being measured across a number of different ways from a global perspective. And each of those methods or approaches are different in the way that they’re looking at emissions in total and they’re not without their challenges and complexities.
One of the more common approaches used at the moment is by taking the amount of money that’s spent on media and advertising and applying a factor or a percentage to that spend to come up with a number in emissions.
Darren:
It’s quite convenient, isn’t it, to be able to take a dollar spend and then extrapolate a supposed number of tons of CO2, I guess.
Damien:
It is and from a lot of the research that we’ve done, it over exaggerates the extent of the problem. But it also doesn’t allow any change to be driven from the spend or from the advertising itself.
Darren:
Well, apart from reducing the total spend, it is the only way you can do it. You can’t get more efficient because the only way is to stop spending is the way to eliminate greenhouse gas.
Damien:
Exactly. And marketers aren’t looking to reduce the amount that they’re spending on advertising, they’re looking to sell more widgets rather than-
Darren:
Well, none that I’ve met anyway. I often say to people in 25 years of doing this, I’ve never met a marketer who’s told me that they have more than enough budget. They all want more money to spend, to get the job done. But, okay, so was it the identification of this issue that led to you guys forming Net Zero Media? Is that the problem that Net Zero Media is fulfilling?
Damien:
Well, it’s a problem that we’re solving in the more granular or effective measurement of carbon emissions and greenhouse gas emissions from advertising. But it wasn’t really the genesis of why we embarked on the project.
I mean, we’re the founders of the business, we’re all passionate about seeing solutions to the climate crisis that we’re experiencing globally. So, trying to help an industry that is contributing to that problem was really the driving motivation behind it.
We’ve gathered people who are experts in the areas of climate science, media and advertising and technology development to help deliver a solution that can more effectively measure and at a more granular level the emissions from media and advertising.
Darren:
So, the benefit of that, Damien, would be that if you know where your heavy load is coming from, you can look at ways of reducing that and possibly then investing in other areas which are much more efficient and produce less greenhouse gas. Is that the sort of thinking behind it?
Damien:
That’s absolutely the thinking. Being able to identify where there are lower emitting channels than higher emitting channels is very much a motivation from our perspective to drive change and to reduce the overall emissions from the entire industry.
It’s very difficult to just look at television or out of home or radio as holistic contributors. You need to be able to drill down into each of the sub channels and formats to be able to make changes within the mix. And obviously it’s impossible to look at performance without considering the actual impact on marketing and advertising dollars.
Darren:
Now, this is clearly a issue that has been around for a long time, but what is it that’s actually driving awareness now? What’s actually bringing about? Because we’ve seen in the last few months, 12 months, Ad Net Zero, which is a global group, I think they started out of the UK or Europe and now they’ve expanded to Australia. What’s their role in this? What are they doing that compliments what Net Zero Media’s doing?
Damien:
Ad Net Zero, not to be confused with Net Zero Media.
Darren:
Well, that’s why I raised it, because I’m thinking people are probably sitting there thinking, “I’ve heard of that.”
Damien:
Look, there are chapters of Ad Net Zero popping up all around the world, which is fantastic because it’s really increasing the awareness in local markets of the extent of the problem and providing those local markets with a voice in providing local solutions and identifying local obstacles that can be addressed at a global level.
But fundamentally the most important thing that Ad Net Zero are doing globally is helping standardize the way that the emissions from advertising are being measured by producing-
Darren:
That’s important, because you want to be able to compare like for like. And we’ve got to stop allowing people marking their own homework, don’t we?
Damien:
Well, marking their own homework doesn’t really lead to improvements and advances in what we’re trying to achieve. It just creates confusion, lack of transparency in the solution and people benefiting in ways that aren’t really aligned with what we’re trying to achieve.
So, certainly trying to create standardization is a big part of it and the global media, global sustainability and media framework goes a long way to helping achieve that. So, the development of guidelines and frameworks around how to calculate emissions across individual channels is a big component of that.
The other role that they fulfill is very much around education. So, helping provide resources and tools to local industries on how to understand the outputs from the measurements. So, what to do with the reports and analysis, how to make change at a local planning level with media and advertising.
Darren:
Now because your company is called Net Zero Media, does that mean you’re only focused on the media’s contribution? Because there’s another component of that, which is the content that goes into it, so is it very much media focused? Because I know Ad Net Zero do talk about it from a holistic approach, is that the same for you?
Damien:
We’re more focused on the advertising component of the overall media landscape. So, the advertising contribution to the greenhouse gas emissions. So, from an advertising perspective is really the we’re the lens that we are looking through.
And the reason that we do that is primarily the content side is within the bounds of scope one and scope two emissions for media owners. That’s their operations that they’re typically reviewing and looking at their emissions from an internal perspective and how they can solve the problem.
Darren:
So, the programming on a TV or a streaming channel is obviously their operational cost and therefore, as the media owner, they’re taking responsibility for that. But you are focusing on the bits that in some ways, the parts that are being rented by the advertiser, that’s what they’re responsible for.
Damien:
That’s exactly correct. So, when we look at or we talk about in advertisers emissions, similarly, their scope one and scope two emissions are being measured internally by them. And a lot of focus has gone into becoming more sustainable as a brand by reducing the amount of emissions through their operations or using more environmentally sustainable practices in their manufacturing.
But a big part of their overall emissions, which has largely gone unnoticed is the scope three which is classified as products and services that are procured external to the business. Advertising is one of those components and typically the largest component on a profit and loss statement relating to scope three emissions. So, we’re focused on providing insight and measurement around that advertising component.
Darren:
So, let’s just for everyone that’s not aware of this, there’s scope one, which is your operational contribution, then there’s scope two, which for me is largely your energy consumption, the power that drives your business, then scope three is all of the let’s call it upstream and downstream contributions outside of your business.
So, in an advertising agency that could be a media agency, it’s the media owners are upstream from you and … no, your clients are upstream, the media owners are downstream, aren’t they?
Damien:
That’s correct.
Darren:
But they definitely fall into scope three. Not to be confused with a company that stole the same name, Scope3 which-
Damien:
That was a very, very clever piece of marketing.
Darren:
Yeah. Which also operates in this space, don’t they?
Damien:
They do. And Scope3 operates almost exclusively within the digital channel of media and primarily looking at programmatic media, which is the somewhat dark art of-
Darren:
The dark art of digital media is programmatic, but it’s also interesting because that is a component that has huge energy consumption. I mean, we’re talking about massive data, storage, increasingly use of AI in the delivery systems, it’s a big contribution but to your point, it’s not the whole contribution, is it?
Damien:
No, it’s not the whole contribution, but it is a very large component. With programmatic digital media, you’re talking about moving packets of data across a very large number of links in a very long chain. And every time there is another call or another link in that chain, it’s incremental energy that’s being used to fuel that advertising to get it from one place to another.
Darren:
Okay, Damien, so let’s just look at then all of the different stakeholders that are involved in this. First of all, we’ve got the brands because the brands are the ones that basically are driving the need for advertising because they have products or services.
They then either themselves increasingly, or they use agencies of different types, digital agencies, media agencies, content creation agencies. Then we’ve got them, the channel owners, the media owners are providing these channels, that’s pretty much that core component of players in this. But then outside that, we’ve also got, consumers, customers, and government have all got roles to play as well, haven’t we?
Damien:
That’s exactly right and each one of those stakeholders has different vested interests in seeing change happen and how they can actually impact that change.
Darren:
So, there’s definitely been an awareness amongst consumers. It gets tracked that consumers are becoming more and more aware of the impact of the climate crisis, but many of them are feeling disempowered from being able to make any contribution themselves and they’re definitely looking for leadership and change to be driven by others, aren’t they?
Damien:
Absolutely. I mean, for a long time, you’ve seen brands now that are starting to promote what they do, what their offering is in terms of its sustainability credentials. So, brands like Ikea, Volvo, Adidas have been promoting how sustainable their operations are, how environmentally friendly their practices are.
But it’s very rare to look at those brands from an internal perspective and hear CMOs talking about the efficiencies or environmental practices of their advertising alone as a standalone channel.
Darren:
And you can see that because from a consumer’s point of view, they usually think of advertising in this topic as greenwashing where someone has gone to market, used mass media or advertising to portray that they’re somehow more efficient or making a contribution to addressing climate crisis.
Damien:
Sure. Like a mining company planting trees and promoting-
Darren:
Yeah, or petrochemical companies saying that they have no impact on the environment because they’ve offset it anyway.
Damien:
Net zero fuel.
Darren:
Yeah, net zero fuel. So, that’s usually where the consumer beginning and end is their concern around advertising and media. Yet you are saying the actual execution of that, even the greenwashing, is contributing to climate change collectively as much as aviation.
Damien:
Yeah, absolutely. I mean, there are lots of examples that are starting to come to light around how much or what extent advertising campaigns alone are contributing to greenhouse gas emissions.
Some examples, a large scale national print campaign for example, can contribute anywhere on average up to about 70 tons of greenhouse gas emissions, which is the equivalent of running your microwave continuously for 14 and a half years nonstop or out of home where you’ve got digital billboards that within a single year would produce the same greenhouse gas emissions is driving a standard car from here to Perth and back 40 times.
Darren:
And that’s one billboard.
Damien:
And that’s one billboard.
Darren:
Well, I was going to say, because a lot of people that I’ve had this conversation with think that print, which used a print example, would be much more polluting from carbon emissions than a digital would and yet that’s not necessarily the case, is it?
Damien:
It’s not. You have to look-
Darren:
Digital is not necessarily cleaner, in fact, in some cases it makes a bigger contribution depending on the source of the electricity.
Damien:
That’s exactly right. The source of the electricity is a big component in it. I mean, over the past certainly five years, possibly even longer, you’ve seen significant advancements in the traditional media channels getting more effective and more efficient in the use of energy and use of recycled products or more environmentally sustainable products, less carbon emitting products in the manufacture of the media assets or the advertising assets.
So, a traditional printed out of home billboard now might be made from skins that are fully recyclable, can be reused. So, the emissions from an out of home billboard is significantly less than a digital billboard of exactly the same size. Primarily because you have all of this electricity that is being used to power the billboards. It’s a very much a hidden cost.
You can be more efficient at getting the message out and updating the message and distributing it to consumers, rotating it so you have multiple advertisers running at the same time. But the underlying emissions that are generated from that same asset when you’re comparing like for like are two very different propositions.
Darren:
It really explains why it’s so important to have an agreed set of standards for how you measure this. Because I can imagine different industries with different sets of imperatives would be arguing, “No, no, we are more efficient. No, we’re a better way of doing this,” without that commonality.
How far and where are we at, at the moment with having a common set of standards for measurement? Is the catalog industry and they still do catalogs and distribute them into letter boxes, is that got a standard way of measuring their impact compared to, say, sending emails?
Because I remember it was a few years ago, quite a few years ago before COVID, that Kohl’s made the decision (Kohl’s supermarkets) not to have printed catalogs that everything was going to be opt in on a digital basis.
Damien:
Yeah, I think the best way of describing the stage that we’re in at the moment is one of transition. So-
Darren:
So, there’s no universal standard yet.
Damien:
Theres no universal standard yet. What we’ve seen is Ad Net Zero produce a framework that looks at the contributions or the measurement practices in each individual channel and in collaboration with organizations like Net Zero Media and media agencies, media owners, and climate scientists coming up with a standard way of measuring the emissions.
Now they’ve gone part of the way, the objective is to look at all channels but obviously that that takes time and requires input from all of those various stakeholders. They have released frameworks, methodology for television and digital and video, digital video.
So, we have a standard set of ways of measuring within those channels. Recently they’ve released guidance around print media and guidance around out of home, still got radio and cinema to go but we-
Darren:
So, they’re working through it, they’re working channel by channel. Because when you talk about scope three measurement, you can really go down a rabbit hole, and I remember talking about if I had a 32nd ad running on a TV’s network nationally, yes, there’s the cost of the CO2 emissions of producing the 32nd ad then there’s the power to broadcast it.
But then do I also include all the TV sets and the electricity that they’re going to use for the 30 seconds to actually be able to view the ad and do I have to also make an allowance for the building of those TV screens because that process also created CO2? I mean, at what point with scope three do you stop counting?
Damien:
That’s a really interesting point. And one that really depends on the context in which you’re looking at from my perspective. So, if we are looking at it from 30,000 feet at an industry level, creation-
Darren:
So, on one of Elon Musk’s low altitude satellites.
Damien:
That’s right. And one of the low altitude satellites or one-
Darren:
You’re looking at the industry-
Damien:
Of Jeff Bezos’s trips to space, we’re looking down at the industry as a whole and we’re looking at the contributions from three phases. We’re looking at the creation of the underlying asset or piece of advertising, we’re looking at the distribution of that asset. So, you’re taking it from the origination source to the consumer and then the final phase is the consumption of that piece of advertising, so three phases.
Darren:
So, the actual infrastructure is not necessarily part of that. The infrastructure in the first place does not necessarily get counted depending on the — because I can imagine if you had a channel that had to be built from scratch to deliver, then you would have to count it.
Damien:
That’s right. It does need to be counted from that 30,000-foot view. So, we look at end of life for specific assets. So, we’re looking at end of life when we’re talking about television of transmitters or switches or transcoding engines as part of that overall measurement.
What becomes really difficult is what the industry is trying to get to, which is campaign centric measurement of carbon emissions. So, that is taking the overall measurement and then being able to allocate that at a campaign level or attribute it at a campaign level for individual advertisers.
Now, once you get down to that level of granularity, the materiality of end of life of some of these components becomes so small that it’s negligible in the overall supply. So, we’re spending a lot of time coming up with ways of trying to calculate and measurement that we’re almost missing the point of the overall emissions. And that’s being able to relate it back to advertisers in a way, or to media agencies in a way that they’re able to affect change.
Darren:
In many ways, what you’re really wanting to achieve is awaiting in a way that allows you to balance effectiveness of media, of channel selection with the cost or consequence of it, so that people can make more informed decisions about the consequences of those choices rather than just the effectiveness of those choices.
Damien:
Exactly. That’s the holy grail, isn’t it? Being able to get to the combination or a combination of advertising performance with environmental impact and being able to look at those two often very distinct metrics and come up with a solution that allows to optimize to both those objectives. And unfortunately, at the moment it’s very difficult to get there because of the quantum of data.
And I think as we start to touch on the future of where the measurement of carbon emissions in the advertising industry is going that will be a role that AI and machine-based learning will be able to assist with being able to combine those two data sets into something that will be able to be actionable.
Darren:
Well, because traditionally media has been planned only around two variables, one is your audience delivery, and the other is cost. And so, bring those two together and you get media efficiency, which is lowest CPMs or lowest cost per impression.
What we’re talking about here is adding a third leg to that measurement, which is then environmental impact, so that you’re balancing the three legs there, audience, delivery, hard cost.
But also, on the environmental level, we’re starting to see now with mandatory reporting, and the government in Australia has introduced mandatory climate reporting as from January 1st, 2025, that that’s going to head down that path of being another cost, isn’t it?
Damien:
Yeah. So, the main-
Darren:
I mean, they haven’t put carbon tax on the table, again because that went so badly last time, but that is where we’re going when we’re asking companies from a financial point of view to report the greenhouse gas emissions.
Damien:
Well, it’s interesting, they’re looking at … so that’s correct. The changes came in from 1st of January and they’re being applied in a phased approach. So, being phased in as mandatory overtime. So, there’s two different standards. One is a mandatory set of standards; one is a voluntary set of standards that are gradually being adopted by organizations depending on the size of those organizations. And what-
Darren:
Sorry, just to clarify that size being their turnover, 1number of employees, there’s a couple of different measures.
Damien:
There’s thresholds that are being used to determine whether or not-
Darren:
It’s not for small to medium businesses at this stage.
Damien:
It’s not at this stage. And what those set of standards are looking at is, first of all, being able to quantify in a reliable fashion the amount of emissions and this is all included in a new format sustainability report that will accompany the published set of financial reports.
So, quantify the extent of the emissions and then asking the companies to quantify the risk that’s associated with changes to those emissions and coming up with risk mitigation strategies.
So, if for example a price was placed on carbon, how would an organization be able to reduce the emissions, to reduce the risk to investors, the detrimental risk to investors around that cost that would then hit the bottom line or identify opportunities to grow the top line as a result of those risks that have been identified.
Darren:
And that’s the great irony in a way, because none of this was actually introduced on the basis of reducing greenhouse gas emissions. It was actually to fulfill a need investors have to be able to identify risk associated with investing in companies that are carrying a potential huge debt or risk down the track by continuing-
Damien:
That’s very correct.
Darren:
Well, because I think one of the interesting things that was made part of the accounting standards rather than being over here as a separate environmental issue, it was built into the accounting standards.
Damien:
Exactly. Which is a lot of the accountants are the ones that are looking at the problem, they’re the ones that say, “Okay, well as an organization, this is how much it’s costing us to achieve net zero status either through carbon offsets or wrecks.”
If we’re all of a sudden having to report on scope three emissions, which we don’t currently have to do, it’s only a scope one and scope two, if they’re being brought into the mix, well, all of a sudden there could be a very material cost that is associated with our business for doing so.
If you look at brands that are contributing hundreds of thousands of tons of CO2 in just their advertising alone that can outweigh the amount by a factor to their current scope one and scope two emissions.
So, all of a sudden, I might be having to spend millions of dollars more to achieve net zero status if that’s brought into the fold. So, it’s important from a financial governance perspective.
Darren:
Coming back to the marketer though, if they’re in a large organization who’s now required to mandatory report their CO2 emissions as part of this, if their current budget is just converted then into tons of CO2, they’ve got no opportunity to reduce that at all on that balance sheet unless they start measuring what it actually is other than just getting a blanket conversion rate.
Damien:
That’s correct. So, if they’re using the current methodology, the standard methodology at the moment where they take a percentage of their spend and work out the amount of carbon based on that, there’s no way for them at the moment to dive into ways of reducing the spend.
It’s really only when you start to look at the individual channels and sub channels that you’re able to make empirical decisions around how I can reduce the amount of emissions from my advertising, which is what we are doing at Net Zero Media to help drive that change.
We’re looking at the individual sub channels and even a layer down that the ad formats or ad products that are contributing to that overall mix and helping the industry come up with comparisons comparative metrics between channels to really drive those education or drive the education and the changes that can impact better practice.
Darren:
So, Damien, that pretty much from my perspective, feels like a good, where are we now? What are we seeing, or what are you seeing emerging in the way of improvements or innovations in this space?
Damien:
Well, very much you’re seeing the regulatory changes that are coming into effect, which is a good way of forcing advertisers and brands to become more transparent in the way that they’re emitting carbon or greenhouse gas emissions as part of their overall advertising activities.
So, check, we’ve got the regulatory regime that’s starting to come into effect, we’re seeing the advertising industry as a whole take more notice and start to work together to overcome the challenge or the problem of emissions. And then we’re seeing the individual stakeholders within the sector take on their share of responsibility to solving the problem.
Darren:
So, individual stakeholders, what are the media owners doing, where are they at and what are going to be their sort of role in the next 12 months, two years?
Damien:
So, our view is that media owners have the greatest ability to actually solve the problem. They’re the ones that have access to all of the underlying data around the production of the assets, the creation of the assets, the distribution of the assets and the ultimate consumption of the advertising assets as part of that supply chain.
They’re the ones that control the choice of vendors that they’re working with. So, if I’m a TV broadcaster and I have a transcoding partner who is incredibly inefficient in the way that I’m transcoding my media assets, I have the ability to change transcoding partners to a partner that is more energy efficient.
If I have data storage practices that suggest that at the moment, I’m storing creative assets on my servers for three years because it’s convenient for running subsequent campaigns, then I might change those practices or policies to say, “Well, actually I’m only going to store them for one year because my advertiser has also stored them for three years,” and if I need to reuse them again.
Darren:
Yeah. A lot of this feels like just common sense business.
Damien:
There is a lot of common sense business but you are talking about lots of different actors in the overall chain that haven’t been talking about this issue in the past. So, it’s only that it’s now coming to light that there is the opportunity to have those discussions and reflect on what we’re doing as an industry to improve and reduce the overall emission.
So, media owners have a big role to play in impacting the way that they can deliver more sustainable solutions. The other thing that-
Darren:
What role can agencies have? Because in some ways they’re Mr. in between, between the brands and the media owners.
Damien:
The very definition of the word agency reflects that they are supposed to be working as an agent of their customers, which is the clients.
Darren:
Or the media owners in some cases, depending where the money’s coming from. But yes, an agent is acting on behalf of a principal.
Damien:
Exactly. Putting the money to one side, the role of an agency is really to help their clients, being the advertisers achieve the most efficient use of their budget. And when we’re talking about efficient use of budget, increasingly that will get looked at through the two lenses, one is the performance, the other is the environmental impact.
So, when we’re talking about environmental impact there is a definite role for media agencies in recommending independent solutions to their brands to help them measure that impact.
The role of the agency isn’t to come up with the solutions themselves or to come up with the measurement, because I believe there’s a conflict of interest between the role that they play as custodians of the budget and being remunerated by the media for allocating that budget. So, the lines can be there can be a bias that exists there.
Whereas if you are working with transparent, independent solutions that are geared around providing that measurement it’s a better outcome for the advertisers. I also don’t think the agencies at this point in time have the right people in-house to be making those decisions.
You look at the operating model of a traditional media agency, you have largely young staff who are working on optimizing media plans, working in Excel, producing, reporting, coming up with strategy. You don’t have access to a breadth of experienced climate sustainability people who understand how to measure and implement that change.
Darren:
Though we are seeing an increased investment in machine learning AI that will be able to take all of those, all those data points. So, to what you were saying before, once you get to a set of agreed measures across all channels, there’s then an opportunity to be able to optimize against those three things rather than just the two things because at the moment it’s very much driven by cost and audience delivery.
Damien:
Yeah. But even machine learning and AI if there is an underlying bias in the data, it’s going to extrapolate that bias through the AI. So, we have to be careful about ensuring that there is no underlying bias to begin with and we do that by working with independent partners to actually come up with those numbers.
And there are a significant, well-growing number of companies like Net Zero Nedia and Scope3 who are offering those independent solutions. From an advertiser’s perspective as well, if I have my media agency calculating my emissions, and this is under the construct of the regulatory framework now.
If I move media agencies then how do I ensure that the same consistent practices are being utilized from one media agency to the next. And yes, there are standardized frameworks, but there are still differences in the way that those frameworks can be implemented.
Darren:
So, what do you see as the opportunities for each of these groups? What should marketers and advertisers be thinking about if they’re already going to be held accountable for their contribution under the mandatory reporting, beyond not greenwashing, which should be a base foundation.
How do they go about making sure, or starting to get a handle on, are they optimizing their media investment against not just cost and audience delivery, but also environmental impact?
Damien:
Well, I think the big thing is that as a marketer, you don’t know what you don’t know. So, the first thing you need to do is establish a baseline of where you are at, at the moment.
So, what I expect will happen over the coming months and years, is an increasing number of brands moving away from your traditional percentage of media spend approach to measuring or evaluating the amount of carbon as part of my scope three emissions to more intrinsic models or methods or technologies that can help quantify that at a more granular level.
So, we can take a baseline of where we’re at. And from that you can then start to work with the media agencies on behalf of the advertisers and certain cases, brands in general to help them evaluate the decisions that they’re making in the context of sustainability initiatives rather than just performance.
So, for example looking at moving from one sub-channel to another to achieve the same level of reach but a lower carbon footprint would be a pretty straightforward approach.
Darren:
Now we’ve talked about media owners, but there’s also the tech platforms as well. I mean, it’s interesting because while they don’t classify themselves as media owners, they’re definitely generating most of their income from advertising, what should they be doing?
Damien:
Well, there’s an opportunity for tech companies to continue to innovate, to help solve the problem rather than just become another tax on the industry. So, by further burdening the industry with more solutions, more buttons to push, more levers to pull what I see is the role of the tech companies is becoming more integrated into the landscape to ultimately become more invisible.
The same way that we see when I’m booking a flight, the option of offsetting my carbon emissions I see a future whereby on every media proposal that goes out from a media owner having a statement around the amount of emissions that are involved in each line of item of that plan for a media agency being able to see how many or what quantity of emissions are included on their media plan, by which channel, and being able to automatically optimize based on that.
Now that’s going to require integration of systems, cooperation between different platforms but that’s very much the role of technology to lead that change.
Darren:
And then obviously government has introduced mandatory reporting but what else, what more could they do? Because we have seen the government in Australia try to address particularly the social media and tech platforms, but being U.S. based organizations, they have very little authority over them.
Damien:
They do and I guess that’s one of the advantages of being in Australia where we’re an Australian company, and then when we have vested interests in driving the initiatives of the Australian marketplace. Similarly, Europe has much more progressive legislation and regulations around sustainability reporting and the implications of that.
I’d like to see government continue to establish proper boundaries for which brands should disclose and be responsible for those disclosures as part of their investment or investor reporting. I don’t know if government should be too involved in the consumer side.
I think consumers will ultimately vote with their feet when it comes to sustainability practices of brands. But I think they’ll become more educated over time so there’s potentially a role for government in educating and increasing awareness.
Darren:
Well, look great conversation Damien, thank you so much for coming and sharing the state of where we’re at as far as measurement in media and advertising. Damien Thomson, who’s the CEO and co-founder of Net Zero Media, thanks very much.
Damien:
Thanks for having me, Darren.
Darren:
And one last question before you go, and that is, when you’ve looked at all of these studies you’ve done and the measurements, are there any channels that marketers should stay right away from?