The internet has become central to human existence in the past two decades. It has enabled new ways of entertaining, communicating, finding inspiration, and navigating our world. Tools like Google Maps, Facebook, Snapchat, or Youtube that do these jobs would not be possible without advertising. Just as we have become dependent on the web, the web has become dependent on the ads served to us.
The codependence between the internet, users, and advertising is not possible without energy 🔋
- Every view, message, share, and bid is work done by data centers or personal devices 💻
- All computers run on electricity 🔌
- 63% of power generation is driven by high carbon sources like coal or natural gas 🏭
- This ultimately leads to the internet driving 3.7% of all global carbon emissions, comparable to the entire airline industry 💨
Digital advertising is a key contributor to these emissions. This is clear when looking at revenue sources for the largest tech companies and total digital marketing ad spend.
Big Tech’s Dependency on Ad Revenue
Of the top 5 global internet companies by market cap, 4 list advertising services as a unique business segment in their public filings. Meta and Google depend on advertising for more than 80% of their revenue.
| Rank (Mkt Cap) | Company | 2021 Ad Rev | % of Total |
|---|---|---|---|
| 1 | Alphabet (Google) | $209B | 81% |
| 2 | Amazon | $31B | 7% |
| 3 | Tencent | $106B | 22% |
| 4 | Meta Platforms (Facebook) | $115B | 98% |
| 5 | Alibaba | Undisclosed |
This similar dependency is present in many other consumer web and mobile companies like ByteDance (TikTok), Snap (Snapchat), Tencent (WeChat), and Twitter.
Growing Digital Ad Spend
Digital marketing spend makes up 63% of all global advertising spend and is forecast to grow to 72% by 2025. Although ad costs are likely to increase in the coming years, there will still be more clicks, bids, and ad listings. Similarly, with the growth of more data-intensive ad formats like programmatic video and connected tv (CTV) in the coming years, the overall carbon impact of these digital ad dollars is likely to increase.
To better understand the true impact of digital marketing on the environment, let’s dig into the underlying processes behind this ecosystem.
Digital Marketing Ecosystem
🔍 Search Engine Marketing (SEM):
Pay to to increase visibility on search engine result pages on Google, Bing, etc. This type of paid marketing, also called PPC (Pay Per Click) is dependent on an ad auction model where advertisers bid to compete for real estate on search engine result pages for essential keywords. This algorithmically driven bidding machine is constantly running awarding bidders’ placements 24/7.
💬 Social Media Marketing:
Paid social media marketing leverages rich content and data exchanged between third parties and the social media site to target customers at the right time. As video content plays an even bigger role in this channel, more energy will be needed to serve ads. A single video campaign with 1M impressions is equivalent to driving ~7K miles.
✉️ Email Marketing:
Large brands often send daily marketing emails to audiences exceeding 1M people. That one email to ~1M people has equivalent carbon emissions to driving a car for 12K miles. Building and sending emails is also not possible without cloud-based marketing platforms that have to host rich data sets about consumers and exchange data with other systems to keep that information up to date.
🤖 Programmatic Advertising:
Programmatic advertising is used across video, display, and other marketing channels. It is a tool that lets advertisers automate the purchase of their ads based on a bidding model similar to Search Engine Marketing and have those ads served across multiple publishers while easily measuring results. This complex network of advertisers, publishers, and bidding requires a large amount of computing power.
🖥️ Connected TV Advertising:
As the wirecutter movement picks up speed, more people are shifting from traditional TV to streaming services. This is driving an increased shift of advertisers to CTV (connected tv). Along with being able to serve highly targeted ads to individuals vs. buying spots on shows, this channel offers increased measurement.
You get the point. Online Advertising is getting more and more complex every year as advertisers and publishers seek more efficient, intelligent, and measurable solutions. I haven’t even mentioned mobile advertising, affiliate advertising, data brokers, proprietary ad networks on sites like Amazon, etc.
Carbon Emissions of Digital Marketing
The energy-hungry digital marketing ecosystem is heavily dependent on carbon. The majority of global energy is generated using fossil fuels like coal, natural gas, and oil. Most of big tech is working to confront this problem through carbon offsets or moving to renewables. Carbon offsets are hard to make perfect and even when data centers can leverage green energy sources there are still users who doom scroll on devices that are largely powered by dino juice.
With the entirety of the internet driving roughly 3.7% of all global carbon emissions in 2019, what is the overall carbon impact of online advertising and how will it increase in coming years?
In 2018, a team of European researchers estimated that Online Advertising consumed 282.75 TWh of energy and emited up to 159.93 million tons of CO2 emissions. Although the ranges provided in the “Environmental impact assessment of online advertising” were broad, this is a good basis for estimating growth in coming years.
| Year | Est. Energy (TWh) | Est. Carbon (Million Tons CO2) |
|---|---|---|
| 2018 | 283 | 37 |
| 2019 | 324 | 42 |
| 2020 | 380 | 49 |
| 2021 | 491 | 64 |
| 2022 | 570 | 74 |
| 2023 | 647 | 84 |
| 2024 | 716 | 93 |
| 2025 | 783 | 102 |
I take 2018 energy and carbon impact estimates from the previously mentioned study and apply expected global digital marketing spend historicals and estimates through 2025.
In 2025 we could see online advertising consuming 783 TWh of energy and 102 million tons of CO2. That is comparable to the energy consumption of Brazil in 2019.
These targets use the high-end defined in previous studies, but could end up being conservative as video makes up a larger portion of ad spend and the complexity of ad targeting increases. Some research estimates that the internet as a whole could grow from 3.7% of all global emissions to 14%. This is no surprise with the growth of cryptocurrencies and other blockchain applications. Online advertising may only make up somewhere between 2-4% of total internet emissions1, but is an important place to start solving the problem.
Addressing the Carbon Impact of Digital Marketing
With such a big energy consumption big tech and others in the online advertising industry are working to find ways to offset their impact. These approaches fall into two categories; carbon offsets and renewable energy sources.
- Carbon Offsets/Optimization
- Good-Loop is a new start-up that offers a tag that measures how the carbon impact of digital ad campaigns and a programmatic video ad pre-roll that allows consumers to donate to a charity for engaging with the ad. The company recently closed a $6 million Series A funding round and has raised more than $5 million dollars for charities.
- Scope3 offers solutions for publishers, ad-tech companies, brands, and ad networks to estimate the carbon impact of different types of advertising. This allows organizations to make decisions on how to offset this impact.
- Easy wins are available for publishers and advertisers to optimize the overall carbon impact:
- Advertisers can buy low-carbon creative like standard IAB display units.
- Publishers can limit ad density and reduce refresh rates
- Timing of ad campaign can also be considered
- Renewable Energy Sources
- Google is on the pathway to being completely carbon-free across its organization by 2030. They are currently carbon neutral but are striving to remove all carbon emissions from their operations including using renewables to power ad operations.
- Meta, Amazon, and many others are also working to address carbon emissions from data centers and servers by moving to renewables.
All of these efforts are a cause for hope, but marketers should be conscious of the impact every ad buy and email campaign has on our environment. We should reward our partners who strive to offset that impact.
1. The estimated percentage of total internet emissions is based on my own calculations and estimates provided by Good-Loop here.