François Polarczyk, Partnership & Sustainability Manager, Accedo
Advertising is a crucial source of revenue for video service providers. In 2023, global ad spend on TV and digital video is projected to reach $210.2 billion. Just as video providers look to increase advertising revenue, there is a simultaneous drive to achieve net zero carbon emissions by 2050. How does the TV and video industry’s drive for monetization, which so often includes advertising, square with the need to make video operations more sustainable? What responsibility do TV and video service providers have to reduce emissions from advertising that they show and how can positive change be achieved? Before answering these questions, we first need to better understand the relationship between advertising and emissions.
How advertising drives consumption
Lowering the carbon impact of streaming does not stop at the video service infrastructure but extends far beyond. Advertising contributes to the carbon problem in a number of ways. Yes, the resources that go into producing, delivering, and watching the ad all need to be considered, but the carbon impact of the ad does not stop there, in fact this is really just the tip of the iceberg. The nature of the ad content and the user behaviour after viewing the ad are the real concern, and it is this that must be considered and addressed if we are to achieve carbon neutrality in the industry.
Household consumption (i.e. the production and use of household goods and services) is reportedly responsible for 60% of global greenhouse gas (GHG) emissions. Put bluntly, the very act of advertising drives consumption, which in turn creates emissions. Once the ad is out in the world, it encourages viewers to purchase products, and it is this that leads to increased consumption. The GHG emissions that result from the uplift in sales generated by advertising are known as the ‘advertised emissions’.
Consumption is driving emissions, and if left unchecked, will deliver the human population into a full-blown catastrophe of which we are just starting to see glimpses of now. An ad’s purpose is, after all, to encourage people to buy products and services. Therefore, it stands to reason that the current model helps to create and enforce a materialistic mindset and a consumerist culture. If as an industry, we are to deliver sustainable streaming, we need to create a different model for ad monetization. But where do we start and what can video providers do to help to shift the current situation towards a more sustainable model?
Having organizations taking full responsibility for the content and services they choose to provide, and their impact, would be an ideal scenario for the future. But for this to take effect, supply chains need to be transparent, and sustainability KPIs need to be clearly defined. Transformation does not just involve change on the part of the video service providers. Viewers too need to be positively engaged in the process. In order to reach its sustainable goals, the industry needs both responsible content providers, as well as actively engaged viewers.
Leading change from the front
In order for video providers to reduce advertising emissions and serve more sustainable advertising to their customers, they first need to be able to measure said advertised emissions. To do this, there needs to be a universal and easily accessible framework measuring how sustainable the advertised content is, as well as its impact on viewers’ habits. Service providers need this information to make informed decisions about which advertisers to work with. Of course, this all needs to be carefully managed without risking financial stability, otherwise it will be difficult to engage stakeholders. We need transparency on the impact of our actions, and we also need industry-wide standardization over how we measure carbon footprint for all content and any company in the value chain.
When thinking about how the industry can balance monetization with sustainability, it’s not surprising that we’re coming up with more questions than answers. This is after all, relatively new ground. Even as recently as a few years ago, building a sustainable video service meant having a healthy and viable business model that enabled financial stability and security. It didn’t include a requirement to also be environmentally sustainable. As awareness around the need to address and reduce our carbon impact has grown, the need to move to more sustainable business models has become a higher priority.
In a search for answers to the many questions posed here, Accedo is leading an incredibly exciting experiment bringing together content owners and technology vendors. A working group has been established tasked with developing a prototype for what a sustainable monetization service could look like. To get to the proof-of-concept stage, we’ll carry out a range of prototyping activities, including brainstorming around scenarios with content owners, focus groups, and audience analysis relevant to a particular content owner. We plan to present a prototype at IBC later this year.
The video industry must confront the issue of advertised emissions if it is to become more sustainable. While advertising is a crucial source of revenue, it also contributes to increased consumption and a materialistic mindset that is detrimental to the planet. Video providers must take responsibility for the content and services they offer and actively engage viewers in the process of making choices that promote sustainability. Ultimately, it is the responsibility of all stakeholders in the TV and video industry to work together towards a more sustainable future, balancing monetization with sustainability obligations.