3 ways to boost digital marketing ROI while reducing carbon footprint

As businesses grapple with reducing their carbon footprint, optimizing digital marketing is an unexpected solution that can also drive better ROI — a true win-win scenario.

The carbon cost of clicks

In 2022, fifty-five published a study (registration required) showing that the average media campaign generates 70 tons of CO2 emissions, or the equivalent of seven people’s carbon outputs in an average year. Reducing carbon emissions can come at a hefty cost to businesses, but doing nothing is not an option. Therefore, it’s a balancing act of sustainability versus profit.

The study broke down the components of a digital marketing campaign and calculated the CO2 equivalence for different scenarios. Aligning these outcomes to favorable business outcomes lets marketers demonstrate they can improve ROI while providing a sustained reduction in carbon emissions.

Almost two-thirds of the money spent on programmatic advertising was wasted because ads were shown to the wrong target audience, according to the ANA’s recent report. Furthermore, many ads wind up on made-for-advertising sites that are typically fraud, click-bait or offer low-value inventory. These sites are also the ones with the biggest carbon footprints. The result wastes staggering amounts of labor, money and electricity. So, optimizing campaigns based on performance not only increases ROI, it also reduces organizations’ carbon footprints.

Dig deeper: The role of modern marketing in carbon reduction

Aligning business and environmental goals

Advertisers must identify areas that contribute the most to an increased carbon footprint and hone in on specific business goals, one at a time, to help reduce this overall impact. 

The first step is setting tangible goals. Measuring the carbon footprint of digital campaigns is a new thing that people are just beginning to understand. Fortunately, the number of tools and amount of research for carbon footprint reporting is increasing. The Bilan Carbone method is just one tool a digital business can utilize to measure digital footprints. It is one way to demonstrate how positive business outcomes can come with reduced carbon footprints.

The second step is to set a strategy as a business to improve digital campaigns and decrease carbon emissions. This will turn your smart insights and measurements into better outputs, reducing your overall carbon footprint. Below are three key areas to include when building a coherent strategy.

1. Audience targeting

Digital activities account for 4% of the global carbon footprint, with energy consumption increasing annually by 9%, The Shift Project reports. Given the growing impact of online activities, it’s clear that optimally targeting the correct audience is key to the success of any campaign — both from a revenue and an environmental perspective. The natural first step is to:

• Assess how often your audience is exposed to your activity.
• Determine when the user begins to lose interest. 

With a data clean room, you can analyze very granular data to understand people’s behavior across multiple campaigns to find the optimal frequency cap. This can ensure a campaign is seen at fewer, but more effective times — reducing how often devices are used to display your ads. 

The clean room also lets you see whether people exposed to your campaigns behave as expected. You may find that the campaigns optimizing toward conversions could effectively be refined or even reduced to improve efficiency. This benefits the business while reducing the environmental impact of data processing, server usage and digital ad delivery.

Dig deeper: How reducing your carbon footprint can save you money and increase ad impact

2. Ad creative efficiency

One of the most important parts of campaign creation is analyzing and optimizing creative assets for better performance. However, manually analyzing hundreds of different creatives for what is and isn’t working is incredibly time-consuming.

You may want to use a centralized creative analytics suite that leverages AI and machine learning tools to do this at scale. Having a solid understanding of what works best with consumers reduces the overall number of creatives being served and the number of creatives needed, minimizing your carbon footprint significantly before and after the campaign goes live.

However, use AI as sparingly as possible — its efficiencies come at an enormous environmental cost. In 2022, data centers used 460 terawatt-hours 2% of all global electricity usage, mostly driven by data centers and data center cooling, according to a new report from the International Energy Agency. AI and crypto mining are expected to double that consumption by 2026.

3. Real-time bid optimization 

Value-based bidding (VBB) is an effective way of minimizing your carbon footprint. It identifies the value an impression will bring before bidding on any inventory. By defining your key success metrics and utilizing the appropriate attribution model to assign credit to each touchpoint, you can effectively pair VBB with machine learning models to enable robust and dynamic bidding strategies.

Dig deeper: How advertisers can take the lead in reducing carbon emissions

These are examples of areas within the digital advertising industry that contribute significantly to companies’ carbon emissions. Enhancing a business’s performance in these areas would significantly reduce its carbon footprint.