Scope3 decarbonizes the digital advertising industry

Over the past 30 years, programmatic advertising, the automated buying and selling of digital ads, has come to represent over 50% of U.S. ad budgets, nearing $200B in 2022 alone. But the price of digital ads is not the only cost. Nearly 4% of global greenhouse gas (GHG) emissions, or 1.6 billion metric tons, are caused by the internet and its supporting systems. Compare this to the aviation industry which is responsible for 5%. Between the ad dollars that support everything from search engines to cooking blogs, digital advertising is responsible for a significant portion of that carbon footprint.

Scope3 was founded to make digital advertising sustainable. Started by a team of experts in digital advertising, Scope3 developed a methodology that measures end-to-end emissions of an ad’s delivery across the digital supply chain.

Digital advertising can generate emissions from creative production through to disposal. Scope3 focuses on distribution, which spans ad selection, media distribution, and creative distribution as part of the digital advertising supply chain. Source: Scope3.

One result of their analyses is the ratio of ads to metric tons, where one million advertising impressions are roughly equivalent to one metric ton of CO2e. With billions of ad impressions delivered on an annual basis comes millions of metric tons of CO2 from digital advertising alone. Digital advertising uses thousands of servers that bid to fill ad space in real-time, decide which ads to serve with machine learning, and load creative and publisher content. Those servers, in turn, use significant amounts of energy.

“Data centers and servers are the factories of the 21st century. We just can’t see the smoke,” says Anne Coghlan, Co-Founder and COO.

When Anne and her co-founders started Scope3, they knew that they needed to find the economic incentive for companies to reduce their emissions.

“Our theory,” says Anne, “is that if we get brands on the buy side to price carbon into decision-making, then that would incentivize the supply side to reduce their emissions. We didn’t have a solution for that until we worked with Carbon Direct.”

Compensating for carbon emissions with Carbon Direct

Scope3’s approach to carbon-neutral media, or Green Media Products (GMPs), is threefold: 1) quantify ad emissions; 2) include the price of offsetting those emissions in the real cost of digital advertising; 3) create a direct path to carbon removal purchasing and incentivize emission reduction.

Scope3 selected Carbon Direct to embed carbon compensation into their GMPs with a bespoke carbon removal portfolio. By purchasing a GMP, advertisers can automatically compensate for emissions from their advertising campaigns.

Scope3 intentionally created a portfolio with a price of $100 per tonne to meet the UN's recommendation of an internal price on carbon emissions, and to reflect the real cost of digital advertising. Source: Scope3.

The Scope3 Portfolio: High-quality carbon removal

Scope3 started their portfolio with an advance purchase of $1 million in carbon credits, which will be replenished over time to satisfy demand for emission compensation. The Scope3 Portfolio is a diversified pool of nature-based and hybrid credits that maximizes benefits across different sources of supply.

Diversifying a portfolio of carbon removal credits across nature-based and hybrid projects helps to not only mitigate the risk of re-releasing carbon into the atmosphere, but also deliver additional social and environmental benefits. Source: Carbon Direct.

Each purchase from the portfolio represents a proportional “slice” or fractional share across the mix of nature-based and hybrid credits. After their purchase, advertisers have full transparency into the portfolio with project-by-project reporting.

Looking ahead: catalyzing a carbon-efficient ecosystem

By working across the advertising ecosystem, serving brands, agencies, publishers, supply-side platforms, demand-side platforms, and more, Scope3 delivers far-reaching sustainable solutions.

In one partnership with Vox Media, Green Media was made available across the entire Concert Marketplace giving brands the opportunity to purchase carbon-neutral media at scale across dozens of premium publishers.

“Vox Media is setting a prime example for how publishers can be a catalyst for meaningful change in our industry,” says Harvin Gupta, Head of Commercial Partnerships at Scope3. “The easier it is for brands to factor carbon emissions into their campaign decisions and shift spend to more carbon-efficient supply paths, the faster digital advertising will make progress on its climate goals.”

Building on these partnerships, Scope3 will continue to onboard clients to buy and sell green media as well as educate the industry on the real carbon cost of digital advertising.

“Our mission from day one has been to provide actionable data that enables all actors in the advertising ecosystem to decarbonise,” says Anne. “That is our contribution to climate change mitigation. In Carbon Direct, we found a partner that shares our ethos.”

Looking ahead, Scope3 will evolve their current GMP offering to build emissions reduction into their GMPs. When compensation for unavoidable emissions is needed, Scope3 will automate carbon removal purchasing with Carbon Direct’s API.