Sustainability and the CMO: Driving Environmental Responsibility in Digital Advertising.
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Sustainability is a defining issue of our time for businesses worldwide. Here at Impact Plus we believe that first and foremost this is being driven by more organisations now realising that it’s time to act to mitigate the increasingly visible impacts of climate change.
However, another driver for those in marketing is the fact that consumer perceptions are changing. As consumers become more environmentally conscious, the marketing departments of organisations large and small must act if they want to stay relevant.
This has seen Chief Marketing Officers (CMOs) take on pivotal roles in driving sustainability initiatives. Customer loyalty and long-term success are on the line and doing real good (not ‘box-ticking’, greenwashing good) for the environment is no longer a nice-to-have.
This article explores the impact of digital advertising activities on the environment, the reasons why CMOs should prioritise sustainability, and actionable steps they can take to make their practices more sustainable
Fundamentally, the goal of advertising, and marketing more generally, is to create demand. The whole discipline is about tapping into our human desires, fears and dreams to make us feel we need whatever the company is selling.
It’s not hard to see that marketing and advertising, by definition, can create significant negative impacts on the environment. But like any other industry (transport, energy, construction, travel), this discipline, and the activities that accompany it, can be structured to support emissions reduction targets.
The good news is that today marketing has the tools it needs to be a real player in CSR strategies and make a difference by allowing CMOs to measure, monitor and reduce marketing and advertising’s carbon emissions.
Focusing on the medium of digital advertising, measuring environmental impact hasn’t been possible for very long. Often considered greener, the complexity of advertising distribution technologies has made it difficult to understand pollution mechanisms, and has thus reduced the ability of those within the industry to react and work together to reduce greenhouse gas emissions.
But now that it is possible to cut through this complexity and understand the environmental impacts of digital ad campaigns, thanks to tools like Impact Plus, CMOs are empowered to lead on sustainability initiatives within their organisations. They can now confidently partner with other leadership internally to drive cross-functional sustainability in their companies.
Since the early 2000s, digital advertising has grown at an unprecedented speed to become the world’s leading marketing medium in terms of investment and growth. eMarketer data suggests that the digital advertising industry has grown from $10B to $378B in 20 years. It’s the growth of this extremely dynamic and innovative industry that has skyrocketed its environmental impact.
In 2016, digital advertising accounted for the same levels of greenhouse gas emissions as 60 million return flights between Paris and New York. Put another way, the digital advertising industry’s emissions were roughly the same as the country of Ireland — the 23rd biggest greenhouse gas emitter in the world.
Seven years on, while technologies have progressed in terms of energy efficiency, global digital advertising budgets have doubled. The complexity of supply chains has also increased since then and programmatic ad buying now makes up a greater share of advertisers’ budgets. This ‘industrial’ approach to media buying and the addition of tools and complexity through the whole advertising tech stack has only increased energy consumption and emissions.
Consumer attitudes and preferences are evolving, with an increasing emphasis on sustainability. Surveys indicate that a majority of shoppers consider sustainability when making purchase decisions today, and the ovid-19 pandemic has further heightened awareness of environmental issues.
A 2021 study from Microsoft and Dentsu entitled ‘The Rise of Sustainable Media’ found that 87% of people surveyed globally say they want to do more to combat climate change. The same number also say they’d be willing to change which products and services they buy to do so.
Focusing on advertising practices, a large majority of respondents to the survey (84%) said they would be more likely to buy from a company that practices sustainable advertising.
Chief Marketing Officers, with their strategic hats and deep focus on their target markets, are well positioned to be leading catalysts for sustainability actions within their organisations.
In short, CMOs need to care about sustainability because climate change is our reality. First and foremost, we all need to care about sustainability and take action no matter our roles in society. It is becoming a human imperative.
And consumers’ desire for sustainability is only heading in one direction — upwards. By aligning their marketing strategies with sustainability goals, CMOs can do what’s right for the planet, while also building trust, enhancing brand reputation, and capturing the loyalty of environmentally conscious consumers. As such, sustainability is a business imperative too. Any business that doesn’t take action on the environment simply won’t last.
However, understanding there is something to be done is only the first step. According to IAB Europe’s 2023 ‘State of Readiness — Sustainability in Digital Advertising’ report, misalignment on actions required by the industry as a whole continues to limit progress. For example, 35% of respondents noted they think the industry should be measuring its CO2e impact, whereas 51% of companies do not currently measure the emissions produced by the delivery of digital ads.
A disconnect exists between what the industry feels should be done and what is, in reality, being implemented today.
Here are four areas we believe are most important for CMOs to focus on:
Sustainability has become a fundamental aspect of successful marketing strategies. CMOs have a unique opportunity to drive sustainability initiatives within their organisations and contribute to a more environmentally responsible future.
Ultimately, CMOs who prioritise sustainability will drive positive environmental change and also create long-term value for their businesses.