Media Agencies Increasingly Include Return on Carbon Along With ROI in Plans

In order to encourage clients to make more sustainable advertising decisions, agencies like Wavemaker, Havas Media Network U.K. and Omnicom Media Group are increasingly measuring the carbon impact of media plans alongside return on investment. This lets agencies find overlaps between sustainability and effectiveness without eliminating the nuance that exists between industries and media channels. "What's the best way to spend the money with the lowest CO2 impact that generates this outcome that I want to achieve?" asked Dominic Charles, managing director of audience intelligence and marketing science at GroupM-owned agency Wavemaker. "The answer to that varies a lot from client to client because it depends on what works in the sector and the audience." Advertising generates carbon emissions through the ways campaigns are created and produced and the channels they are served on. But for a media agency hired to place ads, advising clients to reduce emissions at the expense of sales isn't exactly an option. All Ads Have a Carbon Footprint. GroupM Wants to Standardize Its Measurement Faced with that reality, momentum is growing around strategies that measure the effectiveness in terms of the carbon generated by each piece of a plan. Using that measurement alongside ROI lets agencies make decisions on reducing climate impact without compromising unnecessarily on effectiveness. Still, as the industry continues to wait for standards on how to measure the carbon impact of media, and reporting requirements ramp up in the European Union, some agencies remain hesitant to codify measurement processes. Here's a primer on how this model has become more prevalent—and what's holding it back. What is return on carbon? Wavemaker calls its measurement return on carbon. Creating an overlapping graph that measures ROI alongside ROC lets the agency demonstrate to clients where the most efficient plans fall. ROC was coined by Angie Otteson Fairchild in a 2020 paper published by the Academy of Management Journal. It aims to "expand our perspective on the costs and benefits surrounding climate-disrupting greenhouse gas emissions and shift managers’ agenda to treating them as scarce and valuable inputs that have literal financial value—to be managed efficiently in order to generate profits." How are agencies using it? Wavemaker began considering ROC in its media mix modeling for all clients starting in 2022. Havas Media Network U.K. also has tools that measure ROC, including its carbon calculator and a tool called M4, which combines media spend, brand equity modeling, econometrics and emissions measurement related to the advertising life cycle. OMG's Omni Studio has a carbon scenario optimization tool that considers emissions alongside effectiveness to help clients lower the footprint of a buy without compromising on reach, a spokesperson told Adweek. "We’re committed to working with our clients and media partners to decarbonize media, and we’ve made significant headway and investment to translate this commitment into action," Patrick Affleck, CEO of Havas Media Network U.K. and Ireland, told Adweek. "Return on carbon is one such step." Ahead of Ad Net Zero’s US Launch, Clean Creatives Challenges the Group’s Stance on Fossil Fuels Wavemaker uses GroupM's global emissions measurement framework to estimate how much carbon is generated by each piece of a media buy based on which media channel is used and the size of the buy. For example, radio and streaming tend to be lower emitters per impression, while print and linear tend to be higher. By considering the effectiveness of each channel alongside its cost and carbon footprint, ROC can demonstrate where it might be more effective for some clients to include a small print buy into the mix, rather than overindexing on a less effective but lower carbon channel like social. For some of Wavemaker's clients—like Merlin Entertainments, Transport for London or Morrisons Supermarkets—lowering carbon fits into their measure of success. For others, it's not yet part of the equation. "If you have to go to a client and go, 'I need you to not hit your sales target this year because I want to reduce emissions by 10%,' ... you'd get shouted out and you'd probably get sacked," Charles said. "The beauty of ROC is you just [tell a client]: 'This plan does the thing you'd like to do. We've just found the lowest-carbon way of doing that.'" So ... why aren't all agencies doing this? While efforts to measure and reduce the climate impact of advertising have ramped up in recent years with the founding of groups like Ad Net Zero, activist group Clean Creatives and industry network Purpose Disruptors, there's disagreement as to where the industry's biggest impact sits and how to address it. Ad Net Zero and its member agencies are currently working with the Global Alliance for Responsible Media to establish standards around how the carbon impact of ad channels should be measured—slated to be released in the first quarter of 2024—which would let clients compare agency offerings against one another with more transparency. At the same time, regulations around emissions reporting could mean higher stakes for inconsistent or inaccurate measurement. The lack of standardization, combined with incoming regulations, seems to be creating something of a chilling effect among some agency players.

Sustainability News

Media Agencies Increasingly Include Return on Carbon Along With ROI in Plans

A primer on the models that measure effectiveness in terms of the carbon emissions generated

Kathryn Lundstrom

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Kathryn Lundstrom