Why decentralisation is the key to decarbonisation in advertising
by Ben Putley, CEO and co-founder, Alkimi
The climate crisis is a global challenge like no other. While this statement is nothing ground-breaking in itself, it is always worth reiterating. Perhaps surprisingly, digital advertising produces 3.5% of greenhouse gases every year – or 5.4 tonnes of CO2 – yet the industry’s response to climate change has so far been slow.
During times of great adversity, human ingenuity and inventiveness have often provided a pathway to an effective solution. But for advertising it is more than just embracing the newest tech; there needs to be a focus on changing the underlying infrastructure and placing a greater emphasis on efficiency and transparency if a greener solution is to be effective.
While decentralisation most notably grabs headlines for its role as a core-component of Web3, it has a revolutionary role to play in reducing the emissions of the advertising industry. Already, other sectors are taking advantage of this game-changing tech to fuel decarbonisation efforts – the World Economic Forum, for example, has launched a Crypto Sustainability Coalition to tackle climate change via regenerative finance.
It’s time for blockchain technology to drive decarbonisation in the industry through the adoption of decentralised ad exchanges.
Spreading the burden
Before digging into how decentralisation can play a role in decarbonising advertising, let’s look at the basics. Traditionally, ad exchanges have been centralised entities, meaning power is held by a single authority – in this case exchange vendors. In the advertising landscape, Google’s DoubleClick has a market share of over two-thirds, further centralising power. Decentralised exchanges based on blockchain technology allow an exchange vendor to still be present, while allowing those using the exchange to become stakeholders, rewarding them for their participation.
Previously, the roadblock to the wider adoption of blockchain as a green alternative has been the perception – often correctly – of it being energy inefficient. While the emissions created by the ‘proof-of-work’ validation method have been widely documented, more efficient solutions have since emerged such as proof-of-stake, delegated proof-of-stake, proof of activity, or proof of reputable observation. These drastically reduce the amount of energy used to ratify each transaction on a blockchain – proof-of-stake, for example, uses 99.9% less energy than proof-of-work.
Sharing responsibility
Decentralised exchanges are, by design, focussed on transparency. With every transaction written onto an immutable public ledger, all stakeholders have an overview of their supply chain – viewing where spend is headed, where redundant links may be, and where efficiencies may be gained.
It is estimated that each digital ad that is served to a consumer uses 2.5 Watts. At the same time, it is estimated that $5.46 billion of digital ad spend was wasted last year. This represents a huge amount of wasted energy. Decentralised exchanges focus on bringing greater transparency to the ad buying process, allowing marketers to better track where their ads are served and therefore cut spend in ineffective environments. This not only ensures that marketers maximise their budgets, but it will drastically cut emissions.
Decentralised computational infrastructure cuts emissions further. By distributing the processing requirements of an exchange among decentralised nodes, power usage can be more effectively optimised to ensure maximum processing power in a scalable way, adapting for different projects and geographical locations.
Finally, decentralisation gives the advertising industry something it is lacking: accountability. With energy consumption notarised on a blockchain, organisations are allowing for their energy consumption to be transparent and auditable. This ensures that organisations continue to strive to hit their sustainability targets and walk the talk when it comes to energy efficiency.
With the advertising industry’s carbon footprint continuing to grow, and billions of ad dollars being lost every year through wastage the need for change is clear. If we are to truly decarbonise advertising, we need to embrace radical new tech solutions that prioritise transparency, accountability, optimisation, and sustainability.