Climate change is the most pressing issue of our times and the advertising sector has an important role to play when it comes to reducing carbon emissions through the impact of its activities on consumers, the market and, ultimately, the environment
The advertising industry is aware of its capacity to reach consumers and thus its ability to influence perceptions and practices. With this important ability comes also the responsibility to be part of the solution and to thrive for more sustainable market practices. This is exactly the case with the Ad Net Zero programme, which was launched in the UK in November 2020 by the Advertising Association, ISBA and the IPA, and which includes in its membership over 100 advertisers, agencies, commercial media owners and production companies. The year 2022 will be remembered as the year in which the Ad Net Zero programme’s target to reduce the emissions of advertising operations to net zero by 2030 was rolled out globally.
“The objective is to have a global ambition regarding the programme and to implement the Ad Net Zero Action plan as broadly as possible, and this is where we are currently working to develop the programme with local chapters within EU Member States and beyond,” explains EACA CEO Tamara Daltroff.
The Ad Net Zero 5-point Action Plan pledges to reduce carbon emissions from advertising operations to net zero by 2030, with businesses committing to robust, verified plans to reduce their emissions. The action plan thus lays out solutions to reduce advertising businesses’ own operations, production, media choice and awards, as well as leveraging the positive influence advertising can have on changing consumer habits.
In this context, the Ad Net Zero programme also pledges to use the power of advertising to accelerate the transition to more sustainable products and services for consumers.
“The programme provides a roadmap for development in other markets, with the flexibility to adapt and develop market specific solutions. It offers tools that are readily available internationally, like the AdGreen carbon calculator to help to measure and reduce emissions from advertising production,” explains our interlocutor.
And yet, at the same time, the marketing industry has often been seen as creating media strategies in defence of the largest polluters and promoters of overconsumption. Under such circumstances, how can advertising drive an unambiguous positive social impact?
Advertising is to a large extent a reflection of economic activity taking place within a market and is designed to appeal to consumer expectations. When the expectations of consumers change, advertising will ultimately need to change too. However, as an industry, and more specifically talking on behalf of the EACA, we do not see ourselves as passively contemplating the change, but rather we want to be leaders of this change, as we are convinced that the advertising industry has a vital role to play in shifting market practices to align with consumer expectations. We aspire to be part of the solution, not the problem. And those actors that have been identified as being part of the problem today will possibly (and hopefully) be part of the solution tomorrow too. Take for instance the energy sector, which, while being a major polluter, is highly likely part of the solution to producing more sustainable energy tomorrow.
From an advertising point of view, we are fully supportive of the objectives of the Green Deal of the European Commission, which are directly of concern to us. For instance, there is currently a proposal on the table on the substantiation of Green Claims to avoid Greenwashing. We had very productive exchanges with the European Commission over the course of 2022 and are fully committed to contributing to setting high standards in terms of Green Claims that advertisers and agencies can comply with, since we believe that this is an issue of major societal importance to which we want to contribute positively.
We want to persuade the entire advertising ecosystem, and not only the major players, to adopt high sustainability standards and thus shift practices before that is embraced from a regulatory perspective
However, it is true that the advertising sector is often perceived by the public as promoting interests that have negative impacts on the environment. It is definitely an important factor in reducing the attractiveness of the communications sector when it comes recruiting talent. Many agencies struggle to attract young communications professionals and this trend has been increasing over the past several years.
To address the talent crisis in the industry, EACA recently launched – in collaboration with the European Institute for Commercial Communications Education (edcom) – two surveys in Europe aimed at final-year advertising students and agency recruiters in our sector. The main objective was to identify the mismatch between the talent and the industry. The results show that, even though 40% of students have completed an internship at creative, media or digital agencies, there are almost 70% that have considered alternative career paths. These students often consider that the advertising industry will not allow them to be an actor of positive change, which they nonetheless aspire to be.
One of the major challenges we are thus facing is to promote jobs in the advertising industry by demonstrating the undeniable societal impact that advertising has, as well as the ability to be an actor of positive change within our sector. That is something that we can, want and will improve in the years to come.
The 30th Anniversary Declaration of the EASA promotes strong self-regulation, which ensures a high-level of consumer protection and justifies trust in advertising. How truly committed is industry to adhering to this document?
EACA is a founding member of EASA and we truly believe in the power of self-regulation, which serves two main purposes. The first one is that self-regulation allows the advertising industry to apply responsible advertising standards before the legislator can do so. As an industry, we know the market practices and tendencies in advertising and can adapt to them swiftly. Since regulation is a complex process in which many different stakeholders intervene, it often lags behind ever-changing market practices. This is where self-regulation is so powerful, as it allows the industry to act quickly and efficiently to promote responsible advertising practices. This is not a perfect system, but the achievements of self-regulatory bodies across Europe show that it is an important system, both for the industry and for society. Take for instance topics like influencer marketing; self-regulatory bodies have the possibility to quickly set specific standards that they require influencers to comply with if they want to work with certain clients. Legislation is often much slower to react.
However, we should not oppose both (regulation and self-regulation) and this is the second reason that we truly believe in the power of self-regulation. At the European level, and through our membership in EASA, we see that regulators often seek and rely on expertise from self-regulatory bodies whenever they are drafting a regulatory proposal. This is another topic where we are also striving to be part of the solution in helping the legislators where we can in order to contribute to creating a responsible advertising ecosystem. And this is exactly the aim of EASA’s 30th Anniversary Declaration.
Turning to more practical issues, how would you assess the impact of the global economic crises of 2022 on the global advertising industry?
The year 2022 was a highly eventful one, with many challenges to overcome. Firstly, the Russian invasion of Ukraine led regulators, but also advertisers and agencies, to closely scrutinise monetary sources of disinformation and implement additional safeguards to ensure the viable monetisation of legitimate advertising content. EACA is a signatory of the European Commission’s Revised Code of Practice on Disinformation and thus commits, alongside more than 30 other signatories in the advertising industry, to act and report on progress to demonetise the dissemination of disinformation. In this context, and in order to help agencies navigate Brand Safety issues in times of crisis, EACA has issued specific industry guidelines with best practices to adopt to ensure the demonetisation of disinformation content.
Likewise, inflation has posed serious challenges to agencies in the context of crisis. Many companies tend to cut marketing spending as one of the first cuts, and in appearance rather simple measures taken to tackle budgetary issues. However, this not only has negative consequences on the activities of agencies, but also on clients, as brand building efforts within a given market can only be viable by engaging in long-term marketing strategies. Several stakeholders within the advertising industry have published extensive evidence on the negative longterm consequences of cutting advertising spending and more generally on how to seize the opportunities that periods of crisis can generate, rather than only looking at it from a problem side.
How will the rest of 2023 look?
Hopefully, 2023 will allow for more predictability than 2022 in terms of events that have a global impact on the economy and, more specifically, on the advertising industry. In these fast-paced times in which we live, this still seems more like wishful thinking than anything else.
From a macroeconomic point of view, it seems that we are only slowly recovering from the cuts in international value chains caused by the pandemic and concentrated on energy and other strategic raw materials. The consequences of the pandemic, in terms of declining economic activity, as well as the war in Ukraine, resulting in exploding energy costs, have caused a crisis of demand, adding to the supply shortages that ultimately led to the recession-like period we are currently facing. However, there seems to be light at the end of the tunnel, as economic activity is predicted to slowly pick up again this year and high inflation should progressively fall in the coming months.
From a more industry-specific point of view, enforcing transparency in digital advertising will play a major role in 2023. With the adoption of the Digital Services Act, online platforms will have to disclose who is behind an ad, who finances and ad, on which parameters a user is targeted, and to ultimately provide the means to change those parameters. Likewise, bans on targeting minors and users based on special categories of data, as encompassed by article 9 of the GDPR (sensitive data), have been adopted and will hopefully enhance consumer trust in digital advertising.
One of the major challenges we face is to promote jobs in the advertising industry by demonstrating the undeniable societal impact that advertising has, as well as the ability to be an actor of positive change within our sector
Additionally, the EU legislator is preparing a second piece of legislation regarding transparency more specifically tailored to political advertising, which pursues the same objective of engaging in consumer trust and guaranteeing the integrity of electoral processes within the EU.
EACA welcomes the increase in the transparency of advertising. From the operational side of things, it will be paramount for agencies to assess, as quickly as possible, what consequences these changes have on daily business activities and to adapt and comply efficiently in cooperation with clients.
Finally, sustainability reporting plays a major role too, with the entry into force of the Corporate Sustainability Reporting Directive (CSRD) and compliance obligations starting in 2024. The European Commission will disclose the related cross-cutting standards and standards for all sustainability topics by 30th June 2023 and EACA will accompany agencies as much as we can in their efforts to comply with the upcoming obligations, alongside helping smaller agencies that do not fall under the CSRD to follow the sustainability reporting scheme of the Ad Net Zero programme.
We will try throughout the year to show as much support to our members as we can. Let’s then see in 2024 to what extent we have managed to live up to the challenges brought to us by this current year.
The advertising industry can be a driver of the major societal changes that are taking place within society and has a role to play in contributing to the progression to a more sustainable economy
To help agencies navigate Brand Safety issues in times of crisis, EACA has issued specific industry guidelines with best practices to adopt that ensure the demonetisation of disinformation content
We are currently facing a recession-like period. However, there seems to be light at the end of the tunnel, with economic activity predicted to slowly pick up again during this year