Why Volvo Australia has jumped onboard GroupM's digital advertising decarbonisation program

Volvo Australia MD and GroupM A/NZ CEO discuss their Good-Loop carbon reporting partnerships and learnings so far on the state of emissions across Australia's digital advertising supply chain

Over the last two weeks, GroupM has debuted two steps in its quest to address digital advertising sustainability: A new partnership with B-Corp certified advertising platform, Good-Loop, and its first global carbon measurement framework.

The Good-Loop partner is designed to help clients measure, offset and reduce carbon emissions with the aim of decarbonising the programmatic media supply chain, and applies across GroupM as well as its agencies Mindshare, Wavemaker, MediaCom and Essence. It’s part of the holding company’s new sustainability strategy in Australia, focused on the next era of media for the next generation of consumers born before 2025 (Alpha), who are expected to be the largest generation ever.

The partnership sees Good-Loop’s Green Ad Tag being implemented in GroupM’s programmatic activities for display and online open source video to measure and offset the impact of these campaigns via carbon credits. In addition, clients can go a step further and support climate-friendly activities through two major partnerships with the Great Barrier Reef Foundation and National Reforestation program. Launch partners include Volvo, NAB and Foxtel. 

The Good-Loop partnership also complements GroupM’s announcement of a new global framework and calculator for measuring and reducing ad-based carbon emissions across all five stages of the advertising lifecycle in accordance with the Greenhouse Gas Protocol’s standards.

Hot on the heels of the announcements, CMO spoke with Volvo Car Australia MD, Stephen Connor, and GroupM Australia and New Zealand CEO, Aimee Buchanan, to discuss why the automotive brand was one of the first clients to sign up, and what learnings have been gleaned so far.

We also delve into the huge implications of the small steps being taken now to address the digital advertising ecosystem’s significant carbon footprint.

CMO: What prior steps had Volvo taken – if any – with regards to understanding the carbon footprint and environment impact of your marketing and advertising?

Stephen Connor, Volvo: With Mindshare, we work through and understand things like the bus shelter advertising needing solar power and try and work with suppliers who are green or have credits behind them. But it was not hard and fast, or a must to do this or that. We had a view that we should get better at this.

This project [with GroupM and Good-Loop] excites me as we’re now going to the next level. We’re not just trying anymore. By end of this year, we’ll have a measure on our wider climate footprint, so we can start to make some positive changes. We’re re-energised to bring this back to the top of the agenda.

Was this something GroupM clients have been actively asking for?

Aimee Buchanan, GroupM: WPP put a stake in the ground last year, stating that by 2030 we’d be net neutral and achieve 50 per cent in genuine carbon reductions. We’re also the only holding company to include Scope 3 contributions from the supply chain we book activity in on behalf of clients. GroupM contributes 55 per cent of the emissions of WPP. We knew the magnitude of the problem. Globally, the team has done an incredible job of how we go about measuring that.

Last week, we announced the carbon calculator standardisation methodology. We have open sourced that to industry as we don’t want the debate to be about which calculator is better, but just get into action.

It’s great we can measure and come to the Volvo team and say this is what your media plan can deliver. But really, we’re just handing over a problem at that point. It’s ultimately about how we can take active steps to help achieve a positive outcome.

The other thing I’d say is energy grids in Australia means a campaign here has more than three times the emissions than in Europe. What I didn’t realise is the magnitude of the problem in Australia, plus how little has been done towards rectifying that. At the same time, focus from our executive committee was on the fact nothing is perfect and that we want to start with something. It won’t be what we’re doing in three years’ time, but that’s ok, as we will have made a positive step in the right direction.

Read more: Demarketing: How marketers avoid becoming a sustainability problem

Was Volvo’s internal stakeholders, employees or customers agitating to better articulate and measure the carbon footprint and climate impact of marketing activities?

Stephen Connor: What we’re seeing through a study we’re conducting at the moment is the decision makers in the family aren’t mum and dad anymore; they’re the kids coming through. More and more, brands who will flourish in this new world will be those that appeal to these kids, who don’t want to be associated with people who don’t care, or don’t have authenticity or values.

There is always pressure from above, but we’re not doing this because the boss is telling us to. We’re doing it because we have a conscience. We have been part of the problem, now we want to be part of the solution. Volvo has an action plan in place to be climate neutral by 2040, and fully electric by 2030. These are stated targets, not nice to haves.

The biggest challenge is we have to measure our entire network – suppliers, dealers, how we make steel and where it comes from. We have been focusing on the dealers to get them to a level of sustainability and be carbon neutral. What this GroupM-Good-Loop work has done is allow us to focus on another part of the business.

We’ve seen brands pull advertising from a cultural or societal point of view in response to instances of negative commentary, actions or racism in media. Such efforts are usually of short duration and inevitably the advertising comes back. Is there a risk we could see the same here with sustainability of the advertising supply chain?

Aimee Buchanan: The difference is this is a unifying thing that impacts everyone equally. I don’t think there is a business out there that isn't talking about sustainability. Everyone is on a different journey, however. Our approach at GroupM is more about what is intent of the business and what are they doing to follow that intent. It’s not about saying this business has to have it all perfect. If we wait for perfect, there will be no one to advertise with.

This isn’t new news; we have had these conversations as part of our Responsible Investment Framework for couple of years, where we have been asking people to input both their diversity and inclusion prioritisation and sustainability efforts.

But all brands will step towards this – or away from it – at different speeds. It reminds me of discussions around brand safety, which became brand suitability, then brand responsibility. I think we’re heading into an era of brand sustainability. But that will look different for every client. That gives us room to then understand the appetite to be with advertisers who are walking the walk.

How far from a brand perspective is Volvo willing to go?

Stephen Connor: To start to measure things going on in our media presence is great. The next part of the action isn’t just doing this, it’s taking a stand and asking to GroupM not to place money with X player as they don’t live and breathe our values or are thinking about the future.

We know not everyone loves Volvo. We’re not trying to appeal to 100 per cent of the marketplace, we’re trying to appeal to 2 per cent. So if people don’t like our values, I’m not going to try and convince them. What I will do is continue on the path because we are human-centric. We are on this journey, and we won’t waiver until we manage to make a difference. I can make that decision at a local level.

It’s important to understand this is a journey and path. What I do believe will happen is the minority will change and the majority will come in sooner or later, as you start to change people’s behaviour. It’s important to focus on your brand, not what everyone else is doing.

What have you learnt so far about the scale of digital advertising emissions?

Aimee Buchanan: We ran several tests across both online video and standard display, which we shared with Volvo. While emissions are not the same for every campaign or format, we can estimate 1 million impressions of a 15-second video ad run programmatically in Australia can emit above 3.5 tonnes of carbon. One million impressiones of an IAB standard ad unit run in Australia can emit over 0.45 tonnes of carbon. That was the moment we checked the numbers 15 times. And the results were very high compared to global, which reflects the energy grid element here in Australia.

The other thing about being a mature market is we use a lot of technology and data. That’s been a huge positive in getting to the right people at the right time with the right message. However, every tech and data overlay adds a signal that adds emissions. A lot of digital activity is programmatic, and it’s about 21 per cent of all digital for Volvo. Even an unsuccessful bid has a signal, which has a carbon emission.

This is not about saying digital is bad; it is easier to measure as a channel. When we took it to most clients, Volvo was more knowledgeable than many we talked to. There was a real confrontational moment, as many clients just hadn’t considered this part of the equation.

Stephen Connor: It has opened our eyes to something we hadn’t really considered. We sat around the table and went ‘blimey’.

We as Volvo want to be part of the sustainability leaders, not lag behind. GroupM has uncovered something that is a shock, but also somewhere we can start making positive changes. Now the pressure is on to do something about it. That’s exciting.

So what are the next couple of steps?

Aimee Buchanan: GroupM books 6.5 billion programmatic display impressions and 850 million video impressions on open source Web. We’ve offered this first phase with Good-Loop to all clients and at least 30 per cent have signed up to minimise offsetting approach, which is a massive first step.

We’re offsetting that with gold standards via carbon credits. That’s not the end game, but more the start of the finish. For clients interested in going a step above and getting to a climate positive position, we have an initiative for that. Volvo, for example, will be planting baby coral on the Great Barrier Reef with the Great Barrier Reef Foundation, which starts to pull down additional carbon for the lifespan of the coral. We are also working with the national reforestation program. A lot of clients have their own things underway too, and if they want to take the volume of emissions and do something positive elsewhere, they can. But we’re trying to go beyond offsetting – that’s the hygiene factor. Our aim is to get to a reduction and climate positive position.

The next reporting stage is how to measure closed wall video, programmatic out-of-home, social and CTV. If you add all that in – providing people open systems for us to do that – you’re looking at 50-60 per cent of the ad ecosystem. That’s huge.

The carbon calculator will then allow us to measure the entire plan, making decisions on carbon reductions and offsetting that in the planning phase. As we do that, there’s no reason we can’t offset all campaigns, and as we get to the vendor level, we can have pointier discussion about what they are doing to reduce carbon emissions. There is 2-3 years of work ahead of us.

Will we see the insights and framework change the types of channels, media providers and forms of advertising Volvo engages in long-term?

Stephen Connor: The important thing is firstly we have identified an area of opportunity; two, we have to take some actions. Volvo spends on average $30m per year advertising. I’m happy to put my money where our mouth is and not have a relationship with people who don’t live and breathe the same values as Volvo. If that means we move all our media away from one network to another, I’m happy to do that.

It’s really important what we give back doesn’t go back to a global fund either. This is work that needs to come back to sustainable projects that benefit this country as we’re doing the harm here.

Any final thoughts on what the industry can do more broadly to tackle climate change?

Stephen Connor: We have to realise every day in our lives one coffee cup will make the difference. It’s not about saving the world today; what we are doing is taking a small step to make a difference. There is so much more to go on in every space, not just media. Every industry has to start taking ownership of it.

Don’t miss out on the wealth of insight and content provided by CMO A/NZ and sign up to our weekly CMO Digest newsletters and information services here.  

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page       

 

 

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