Big advertisers are discovering their digital-advertising campaigns carry a big carbon tax

• A typical digital-ad campaign for a single brand can produce hundreds of tons of carbon dioxide.
• Brands like Heineken, Nestlé, and Toyota are figuring out how to reduce those emissions.
• This article is part of the "Making Net Zero Possible" series, uncovering forward-thinking solutions that can make a net-zero future a reality.

Many of the world's largest brands want you to feel good about their pledges to reach net-zero emissions. But the digital ads bragging about these promises come with their own costs to the planet.

Of the $500 billion marketers spend on advertising each year, nearly three-quarters of this year's total is going to digital advertising. And with digital, or programmatic advertising, powering everything from connected-TV platforms, retail media, and outdoor advertising, the industry's carbon emissions are only likely to grow in 2022 and beyond.

According to a recent estimate from Fifty-Five, a marketing agency, a typical digital-ad campaign — consisting of shooting, editing, serving, and measuring video, social, display, and search ads — for a single advertiser produces 323 tons of carbon dioxide, or the equivalent of 160 round-trip flights between Paris and New York. 

In the milliseconds it takes for an ad to load on a webpage, dozens of companies from ad agencies, data-management platforms, ad exchanges, ad servers, and brand-safety vendors take part in a competitive-bidding process to win the auction that serves an ad to a particular type of consumer. 

In the process, thousands of servers spring into action, requiring electricity to power each ad call. "It's the hidden cost of advertising that needs to be unveiled," Ruben Schreurs, the chief product officer at Ebiquity, a marketing-and-media consultancy, said. 

A handful of big-brand advertisers — including Nestlé, HP, Toyota, Heineken, and the British supermarket chain Tesco — are examining how they can reduce their digital-advertising footprint. But experts say the convoluted nature of the online-ad ecosystem and its many energy-guzzling middlemen makes the task daunting. 

Other marketers are hesitant to add another audit to their growing lists of responsibilities — especially one that isn't likely to translate into immediate sales growth when high inflation could push some consumers to pull back on spending.

Carbon calculators and vendors help track, reduce, and offset digital ads' emissions

Last year, Nestlé's began tracking the emissions tied to its digital ads in Europe. Nescafé in France worked with Impact+, an adtech company, to halve the energy an online video-ad campaign produces. 

Nescafé France also used a tool from Publicis Groupe, another ad agency, to calculate the price of offsetting the carbon emissions of a campaign for KitKat candy in the UK. It came to just £460, or $547 — a small fraction of the £1.6 million, or $1.9 million, campaign.

Tina Beuchler, the global head of media and partnerships at Nestlé, told Insider there have been encouraging signs from these early tests that greener digital-ad buying efforts can boost sales and other business metrics.

"It's not a cost driver per se," she said. The fact that companies don't have to choose between green ad-buying and holding down costs is a benefit, Beuchler added.

Tesco is applying its strategy for cutting plastic waste to the company's media plans. Last year, the supermarket chain began using a carbon calculator from its media agency, MediaCom, to measure emissions across Tesco's marketing channels, and has turned to vendors like Mobsta to weed out wasted ad impressions.

Toyota is working with The&Partnership, a media agency, and SeenThis, a Swedish tech company, to reduce the load times of its digital ads and thereby reduce its campaigns' data usage. Both HP and Heineken are also in the early stages of determining the environmental impact of their digital spending.

Who should reduce the digital-ad industry's emissions? 

Some experts think the marketing industry has a long way to go in quantifying and reducing its carbon footprint.

Mikko Kotila, the CTO at Cavai — an adtech firm — and author of the research paper "Environmental impact assessment of online advertising," said advertising companies tend to focus on reducing their direct emissions, yet the biggest source of emissions is the consumer after they purchase an advertised product.

Scope3, a startup that measures the carbon footprint of digital ads, said The Trade Desk, an adtech giant, eliminated nearly 5,400 tons of carbon a year by shutting off Google's Open Bidding ad-auction platform. Scope3 calculated that if every ad company stopped buying ads using Open Bidding, it would save 100,000 metric tons of carbon a year — the same as taking 20,000 cars off the road. Google didn't respond to Insider's requests for comment.

"I'm not optimistic. But at the same time, we have some very proactive things," Kotila said. He pointed to The Trade Desk pulling out of Google's Open Bidding tool, saying the move decreased inefficiencies in the bidding process for advertisers — even though sustainability might not have been its original goal. 

Other industry experts say marketers should ultimately shoulder the responsibility for cleaning up the digital-advertising industry's emissions.

Yet there aren't many global benchmarks and standards for marketers to follow, and others aren't keen to go public with their own numbers first. 

Another key challenge for marketers is to prove the return on investment of their sustainability efforts to the rest of the C-suite.

"We just have to be very serious about putting the responsibility where it belongs, which is on the vendors," Kotila said.