Advertisers must adopt a “lean” mindset as the demand for net zero media plans grows

The advertising industry needs to have a proper debate about how media can be made more sustainable, argues Rich Kirk, chief strategy officer, Zenith UK.

There is a largely-unspoken challenge facing adland today: To achieve net zero, advertisers appear to have two choices: 1) accept new costs associated with carbon offsetting; or 2) find a way to make advertising work that runs counter to established marketing science.

This challenge is rooted in the following (relatively) uncontroversial statements:

1. By 2030, UK firms (especially those large enough to be national advertisers) will probably be required by law to publish and follow a plan to reach net zero.¹
2. Advertising delivery produces carbon emissions which can be quantified. These emissions are a drag on any firm’s net zero plan.
3. Carbon offsetting will be widely used to eliminate advertising-related emissions.
4. Carbon offsetting quality & price varies wildly, but will likely be dragged into line via regulation or market forces. Costs will rise as legal standards and demand increase.²
5. Carbon offsetting vs advertising emissions is a new cost for most major advertisers.

Call me a cynic, but when a new cost centre (offsetting) emerges in business, which department’s budget is first on the chopping block to fund said cost?

Advertising is already widely viewed by CEOs and CFOs as a cost to be controlled. It’s reputation may take another hit when firms realise ads are a drag on the net zero plan.

Even a relatively small TV, press & social campaign of under £1.5m we investigated had the equivalent carbon cost of flying 12 people from London to New York and back again.

It is hard to see how the drive for net zero (laudable as it is) can be viewed as anything other than an emerging obstacle to advertising investment, which should give us all pause for thought.

Adland is yet to have a proper debate about how media can be made sustainable

Media planning is balancing the cost, reach, accuracy and quality of advertising in different environs to deliver a successful campaign vs goal.

Minimising emissions will likely become a fifth factor to balance in this highly complex equation.

This is seismic for media, necessitating large-scale rebuilding of the tools and data we use to do our jobs.

The launch of carbon calculators in 2021 by The IPA and several HoldCos was an extremely important step forward. Kudos to those involved, you have given us the first tools to help navigate a new media age.

What these calculators reveal is a huge question: How do you square the need to minimise advertising emissions with what we know makes for an effective campaign?

The most influential book of our era on effective advertising is HBG by Prof Sharp, backed by the EBI’s research. Messrs Sutherland and Shotton have transformed marketers thinking by popularising signalling theory. And Binet & Field have advocated powerfully that broad-based ‘brand’ advertising should represent the bulk of a firm’s media investment.

What unites all these highly respected approaches?

They are wasteful by design.

You would struggle to come up with a more carbon inefficient approach if you tried.

I love Ambler’s famous phrase “The ‘waste’ in advertising is the part that works” because it neatly encapsulates these approaches. But we must acknowledge that if net zero is the aim, then Ambler may now be wrong.

Adapting advertising to fit the constraints of net zero

In every moment upheaval there is significant upside on offer to those who lean into the issue.

In Terry Leahy’s time at Tesco, he saw the oncoming “green agenda” and recognised the huge impact it would have on your grocery shop.

But Leahy didn’t panic. Instead he took the need to “go green” as a prompt to build a leaner, more profitable business.

Advertisers should adopt the same “lean” mindset as the demand for net zero media plans grows.

Lean thinking can minimise emissions, but to be successful improving the accuracy of advertising delivery will be key.

If you can target advertising more accurately at scale, you can reduce frequency of delivery outside the target audience and reinvest that money in building reach amongst your target audience. This has a double whammy affect on campaign return, both in terms of profit and reducing emissions.

In a recent campaign where we tested this approach with a provably more accurate identity map (Epsilon), we saved 75% of the CO2 emissions on £100K of display advertising, whilst delivering 9000 more transactions vs a prior campaign of similar size.

However, the building blocks of identity online are broadly disliked by consumers and are under threat. Will our desire for privacy have to be traded against our determination to achieve net zero?

The delivery mechanics of channels will also require more attention from planners. Take AV and OOH; both offer rapid reach build. But OOH requires one poster to deliver thousands of impacts, whilst TV requires the energy to power thousands of screens for 30’. OOH investment also funds bus stops, bike parks etc – which means offsetting is built into the investment rather than being an additional hard cost. Could this mean more advertisers planning OOH as the lead media with AV as support, rather than the current orthodoxy for brand campaigns of AV first?

Similar opportunities for reducing emissions exist when you consider delivery to mobile screens vs 60 inch plasmas, or the energy required to deliver advertising via streaming or linear.

But some existing advertising orthodoxies won’t be challenged by net zero; Brands with highly distinctive assets, that can generate recall in an instant will continue to benefit – a 10’ ad costs much less to offset than a 30’. Net Zero is another reason to resist the urge to change brand assets for change’s sake.

Who will be planning’s net zero hero?

Somewhat disappointingly, “Measure and offset” appears to be the most nuanced approach we have to net zero.

Whilst offsetting costs are currently marginal and paid only out of a sense of obligation, change is coming. Costs will rise and better answers will be required.

The net zero agenda could have a bigger impact on our industry than channel fragmentation, digital ad fraud or the disruption of tracking infrastructure.

This is a huge opportunity for a new generation of planners to build campaigns that are effective within a whole new set of constraints. It will be fascinating to see the work that this planning produces.

References

1. https://www.bbc.co.uk/news/business-59136214

2. https://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2019/05/GRI_POLICY-REPORT_How-to-price-carbon-to-reach-net-zero-emissions-in-the-UK.pdf - pg 16