TrinityP3 Webinar Series: The challenges for Marketers in a carbon constrained future
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http://www.trinityp3.com/product-category/webinars/ Managing marketing and your agency suppliers continues to become increasingly complex and time consuming. TrinityP3 Marketing Management Consultants are thought-leaders in all aspects of marketing management to improve marketing and agency performance and increase implementation efficiency. This series of webinars are your opportunity to hear the latest industry best trends and practices from the consultants working in this category on a daily basis regionally and globally. An interactive approach means you will be able to have your specific questions answered by industry leading practitioners. Topic: The challenges for Marketers in a carbon constrained future Date: Wednesday November 11Webinar-Icon Time: 13:00 – 14:00 AEST Presenter: Christopher Sewell Whether you believe that the environmental movement is just a leftist plot or you are a realist that can see the opportunities that await in a cleaner, leaner eco-friendly future, you need to understand what challenges lay ahead in a low carbon economy. This concise picture of the language, views and scenarios facing business today will help you plan your long term marketing in a sustainable manner.
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TrinityP3 Webinar Series: The challenges for Marketers in a carbon constrained future
- 1. marketing management consultantsmarketing management consultants The Challenges for Marketers in a Carbon Constrained Future Christopher Sewell TrinityP3
- 2. marketing management consultantsmarketing management consultants What we will discuss today • Crisis? What crisis? • Who’s responsible anyway and who’s taking action • Current Challenges for Marketers • Carbon impact by Media channel. • Benefits for marketers • Summary
- 3. marketing management consultantsmarketing management consultants A Carbon Constrained Future
- 4. marketing management consultantsmarketing management consultants $USD 600 billion eMarketer 2015 top 6 countries Paper making – 75 billion kwh Data centres & Servers – 61 billion kwh US Energy Information Administration
- 5. marketing management consultantsmarketing management consultants 300 million tonnes p.a. 230,000,000 average fuel efficient cars
- 6. marketing management consultantsmarketing management consultants Committed Leadership on Climate Action
- 7. marketing management consultantsmarketing management consultants Who is responsible for the carbon emissions caused by the addition of the advertising?
- 8. marketing management consultantsmarketing management consultants Print – Brochure, Leaflets, Direct Mail, OOH Newspapers & Magazine Radio, Cinema & Television Online & the InternetOnline & the Internet
- 9. marketing management consultantsmarketing management consultants The bad news about paper Carbon footprint of the Daily Mirror Grams of CO2 per final newspaper sold
- 10. marketing management consultantsmarketing management consultants Sixth largest commercial use of electricity Over 10% of total Total internet users over 7,250,000,000 Growth between 2000-15 is over 800%
- 11. marketing management consultantsmarketing management consultants BUYING EFFICIENCY Media • •
- 12. marketing management consultantsmarketing management consultants Reaching one million grocery buyers
- 13. marketing management consultantsmarketing management consultants Walker’s Case study Produced by The Carbon Trust
- 14. marketing management consultantsmarketing management consultants Case Study One Company: Major international Company. FMCG Issue: This Company was claiming to have measured then offset all the carbon emissions in the production and distribution of a new ‘Green’ product. Challenging Problem: Under the watchful eye of the ACCC (Australia’s consumer watchdog) there was a need to ensure all aspects of the product had been measured including the advertising. TrinityP3 Solution: We were able to assist by using our cost effective CO2counter measurement and assessment methodology and calculators to supply carbon emissions readings in all marketing channels.
- 15. marketing management consultantsmarketing management consultants Case Study One Process: We carried out a review of the media and production buy and applied the appropriate carbon readings and reports. An independent auditor who was helping the client comply with strict guidelines oversaw this. Timeline: The carbon assessments for both the production and media buy where completed within 48 hours. Result and feedback: TrinityP3’s unique carbon measurement system enabled the client to be able to comply with the legislative requirements in a cost effective and timely manner.
- 16. marketing management consultantsmarketing management consultants Case Study Two Company: Local Council. Government Issue: Environmental Legislation was demanding that all departments fully understand their carbon emissions. This included the marketing spend. Challenging Problem: With all other business divisions being able to measure their carbon footprint marketing were required to gain an understanding of their external advertising spend. TrinityP3 Solution: We were able to assist marketing by using our cost effective CO2counter measurement and assessment methodology and calculators to supply carbon emissions in all marketing channels.
- 17. marketing management consultantsmarketing management consultants Case Study Two Process: We carried out a year’s review of the media buy and applied the appropriate carbon readings and reports. Timeline: The carbon assessments where completed for each separate marketing campaign within 5 days. Result and feedback: This was only the first part of the process. The historic carbon benchmark now enables marketing to set carbon reduction targets for the future years.TrinityP3 worked with both the internal marketing department and their media and agency partners to understand and then adjust the carbon footprint while at the same time not adversely affecting the business strategy. Reducing waste saves money.
- 18. marketing management consultantsmarketing management consultants Case Study Three Company: US Pharmaceutical Issue: Looking for sustainable leadership in marketing. Challenging Problem: How to demonstrate that using targeted direct marketing via email is environmentally friendlier than traditional mail. TrinityP3 Solution: We were able to assist by using measurement and assessment methodology and calculators to supply carbon emissions readings in their various marketing channels.
- 19. marketing management consultantsmarketing management consultants Case Study Three Process: We applied the appropriate carbon readings for both their commercial printing items and the email marketing campaign. Timeline: The carbon assessments where completed within 48 hours. Result and feedback: TrinityP3’s unique independent CO2counter carbon measurement system has given the client confirmation, with 3rd party validation, that their environmental claim is valid enabling them to promote this campaign internally as well as enter into sustainability awards.
- 20. marketing management consultantsmarketing management consultants CO2counter • The CO2counter enables both historic and predictive measurement to be supplied in a cost effective way. This allows carbon to be used as another decision driver in the media planning process of marketing communications. • This knowledge will lead to carbon reduction planning. • Reductions in carbon in marketing spending are lock-in-step with waste reduction & targeting. • That means better-targeted messages to the right audience.
- 21. marketing management consultantsmarketing management consultants CO2counter “I know that half of my advertising budget is wasted, but I’m not sure which half.” Attributed to John Wanamaker • By focusing on the environmental aspects of advertising you could improve this percentage. • You are specialists that deliver well-planned strategies and cost effective ROI for business. With the CO2counter’s independent carbon measurement system both strategic and carbon reduction strategies can be implemented in a consistent and effective manner.
- 22. marketing management consultantsmarketing management consultants Benefits Brand Image and Reputation •This is the least tangible benefit. It is also the main reason why businesses have a sustainability programme. While a brand’s value does loom large on multinationals balance sheets, it is not until the company’s behavior is less than perfect that this is brought to light. The value placed on a brand is especially at risk for companies that are claiming the sustainability high ground. Keeping the Staff Happy •Like attracts like and this is never truer for companies that have a working sustainability policy in place. With recruitment costs continuing to rise having a reason to join and stay, especially when dealing with the younger more environmentally savvy workforce, requires a clear and well-communicated sustainability mandate can help reduce this business expense.
- 23. marketing management consultantsmarketing management consultants Benefits Standing out from the Crowd •Linking a genuine sustainability programme helps win and retain clients and customers. Having a carbon measurement, reduction and offsetting programme in place puts ‘meat on the bone’ when answering the CSR sections of formal contracts and informed customers. It also gives the sales & marketing teams another reason for their customers to buy when speaking to like-minded companies. Philanthropy and Future Proofing •An area that is difficult to quantify. Then again by it’s very nature it does not need justification. Believing that helping the environment is the right thing to do and having an expense item for voluntary offsets does set a high sustainability pass mark.
- 24. marketing management consultantsmarketing management consultants Summary • Business needs to grab the reins in the environmental area to ensure long-term survival. • Corporates that wish to be competitive in 10-15 years time have to have a robust sustainability plan. That includes bringing their long-term business partners along with them. • The longer one procrastinates the higher the cost to play catch up becomes.
- 25. marketing management consultantsmarketing management consultants TrinityP3 Webinar Series November 25: Super charge your agency with incentive based remuneration For more information go to: http://www.trinityp3.com/product-category/webinars/
- 26. marketing management consultantsmarketing management consultants For more information contact: TrinityP3 Pty Ltd Sydney +612 9964 9900 Melbourne +613 9682 6800 Hong Kong +852 3478 3982 Singapore +65 6631 2861 people@trinityp3.com www.trinityp3.com Trinityp3.com/blog/ @TrinityP3 TrinityP3 TrinityP3.StrategicMarketingConsultants
Editor's Notes
- There is much media coverage and industry discussion on the need to address the issue of global warming and for the reduction in carbon dioxide emission. But one of the areas currently overlooked is the contribution marketing and advertising has.
- For many, their first response, is what emission? But according to the media analyst firm, Veronis Suhler Stevenson (VSS), communication media expenditures for advertising, marketing, publishing and entertainment represented close to 950 billion dollars in economic activity in the U.S. during 2007, which is roughly seven percent of the U.S. Gross Domestic Product. This is hundreds of billions of dollars in economic activity, hundreds of gigawatts of energy, hundreds of millions of tons of greenhouse gas emissions and tens of millions of jobs. Lets look at print and digital media. Both require flows of information, energy and materials. According to the U.S. Energy Information Administration the papermaking industry consumed 75 billion kilowatt hours of electricity in 2006, and data centers and servers consumed 61 billion kilowatt hours of electricity. While these are only a small part of the total footprint of communication media they represent the fourth and sixth largest industrial uses of electricity. With energy production one of the major contributors to emissions, associated increases in direct energy costs, and the indirect energy costs passed on by suppliers, will obviously impact business. This, along with existing and planned legislation, which penalizes high-energy consumption and rewards emissions reductions places advertising and media supply chains in the path of a rapidly growing wave of change emanating from the boardrooms of the largest corporations and investment funds in the world. It is not a question of if, but of when communication carbon footprints and other aspects will come under the same scrutiny.
- Currently, the auditing practices for calculating carbon emissions from marketing spend takes a broad approach based on total spend. Based on this methodology, marketing communication globally is responsible for over 500 million tonnes of CO2 per year and is forecast to grow by over 5 percent every year thereafter. To put this into some prospective, this is the equivalent amount of CO2 generated in the same period by over 380,000,000 average fuel-efficient cars, This is more than half the total number of cars on the road today! But isn’t the point of measurement in business to gain knowledge then do something about it. Carbon emissions are the same. Measure it then find ways of reducing it. The problems with the current methodology for measuring carbon emissions due to marketing is that it is based solely on total spend. The only strategy for reducing the carbon footprint of marketing here is by spending less, with no guidance or direction where. While this may appeal to the CFO, it has little or no value to marketing or the company and so marketing is placed in the too hard basket and ignored or simply offset.
- CDP
- Television, radio, press, magazines, cinema and the online are primarily designed for education, information and entertainment. Therefore does the marketer have any environmental responsibility for their use of these media? Should the marketer consider the carbon emissions associated with their advertising appearing in this space? Advertisers should take responsibility for the amount of space they are taking up in the publication from a carbon measurement viewpoint. After all, the magazine or newspaper would be that much smaller if the ad was not there. The concept of advertising is a commercially driven process of selling ‘space’ or advertising within this content. People engage with these various mediums to access the content. Contrary to what the media sales people may say, the ‘advertising’ is not the reason the audience engages with the medium. Therefore within these media channels the carbon calculations are made on the advertising or marketing interactions component only, not on the total media business itself. Therefore the costs of building and operating say a TV station are not included. These should be measured, reduced and offset where possible by the media proprietor themselves. The same concept applies to an advertisement in a newspaper or magazine as it does to a spot on television or radio. In one the calculation is based on physical size of the advertising and for the other duration of the advertising. The concept is the same. This is perhaps why the industry uses the term advertising space to cover all dimensions? Because on-line the measure is both size and duration. Therefore in each case, the responsibility of the advertiser is the impact their advertising is having on the environment and not the impact of the media channel generally. In print media such as newspapers and magazines it is the additional emissions due to the extra pages needed to accommodate the advertising. In television it is about the consumption of power by the equipment, such as power hungry as the big plasmas in televisions for the duration of the commercials. In the case of radio, the carbon footprint is relatively small. And at the cinema, we need to measure is the time our ads are on for across the number of screens, because the carbon emissions are the same whether there is one or 1000 people munching on their popcorn. Remember we are not measuring the impact of the movies, just the ads.
- TrinityP3 and our partner Gaia, have developed a methodology to calculate the carbon emissions associated with both the production, media and execution across the major advertising disciplines including: Print including brochures, leaflets, direct mail, out of home Newspapers and magazine Radio, television and cinema Online and the internet The first group are marketing channels that have a chain of events that are all designed solely to convey a marketing message. Lets review the major issues with each of these marketing channels. When people think about the impact of marketing on the environment, the most often think of printing. The idea of felling trees and clearing forests is an anathema to many, not just environmentalists. But the printing industry has been addressing the issue of environmental sustainability for many years with sustainable and renewable plantation programs, recycling programs and biodegradable inks. In calculating the carbon emissions for printing, from the growing of the trees to making the pulp for paper, to the printing of the leaflet or brochure, you are consuming infrastructure and commodities that are only being used for this end purpose. Therefore the total CO2 from the entire process is included. As with all other carbon emitting processes the more wasteful it is the worse it is for the environment. But the reverse is also true. In direct mail and in all marketing, the more targeted the communication, the better the carbon footprint. Waste has the biggest impact and therefore is the biggest opportunity for reducing your carbon footprint. Another printing media is out of home. The purported reach from this medium means you can achieve a significant reach without many actual sites. This is good from a carbon footprint standing but may not work for the product or service strategically. Outdoor is also an area that is changing rapidly. If you consider electricity use, as you should in calculating carbon emissions, look at the supersites that are flood-lit all night? All those rotating spinning signs? Or the increasing number of digital posters? And out of home is not just about the paper. Vinyl is another story as it is not bio-degradable. So your brand will stay around in that landfill for a long time. All of these media channels are designed purely to convey your marketing message. But what about those media channels that are not necessarily set up exclusively to deliver a marketing message?
- Issues with reduction strategies for Newspapers. They influence but do not control supply of paper The way to reduce emissions is to reduce volume of paper (as it has the highest footprint) Newsprint uses less energy than glossy magazine
- And of course, there is on-line advertising and the internet. As we stated up front, the U.S. Energy Information Administration calculated that in 2006, data centers and servers consumed 61 billion kilowatt hours of electricity in the U.S. alone making it the sixth largest commercial use of electricity. So contrary to popular belief and what the internet content providers tell us, the internet has a huge carbon footprint. One problem is the proliferation of high volume search portals with their associated relatively low cost advertising sales. The problem is that while they offer marketers a low financial cost way of reaching a huge audience, the same huge reach can represent a huge waste and a huge carbon footprint and so they should be considered closely. In contrast, buying in the long tail or using the good targeting available in the ever-increasing social network sites can reduce this wastage. With sites like Facebook and Myspace offering the increasing ability to segment their users into communities or groups they offer an efficient way of targeting, with the effect of keeping carbon emissions down. It could be argued that a well-targeted and relevant paper based communication, delivered through the post, is far more environmentally friendly than a multi-million view banner campaign that gets to the audience by sheer weight of number.
- In number one place for emissions was the internet at 42% because the internet is an incredibly wasteful media for building mass reach against this audience. While it has low financial costs, the number of page views to deliver this audience means the carbon cost is high. Television is next at 32% followed by magazines at 13% and newspapers at 12%. Then way behind is radio, cinema and outdoor at less than 1%. So what do you do with this information? Well this is not to suggest that you should plan your media based on optimising your green house gas emissions. It is however, another factor to consider along with your other strategic marketing considerations when you are planning a campaign. You see, to date, marketing has been largely overlooked in the business of environmental strategy and yet ironically it is the way most companies and organisations go about informing the public on their environmental achievements. This may have been due to the fact that until now, the measure or marketing carbon emissions was based on spend alone and not the mix of the marketing activity. With this measure, the only way to optimise your carbon footprint was to either do no marketing or to offset the cost, neither an optimal option.
- 9,200 tonnes CO2 and £1.2 million per annum by changing the way that potatoes are traded.