Advertising technology veteran Brian O'Kelley is returning to the industry with a venture that wants to help reduce the environmental impact of digital ads.
From energy use on devices, to the transmission of data through network equipment, and the servers and cloud infrastructure that support every vendor in the digital ad supply chain — trading desks, demand-side platforms, advertising exchanges, ad servers, analytics platforms, and more — the placement of digital ads requires a vast amount of electricity, which in turn produces tons of carbon emissions.
Coming out of stealth on Wednesday, public-benefit corporation Scope3 is offering a service to help the players in that chain — which also includes advertisers, agencies, and publishers — to measure the carbon impact of their digital advertising output. "Scope3" refers to Scope 3 emissions, which represent emissions that are not generated by a company itself, but the vendors it uses in its supply chain.
"If you think about how concentrated advertising is, it wouldn't surprise me if the top 50 advertisers have more emissions from advertising than they do from travel," O'Kelley told Insider.
"I'd like to see digital advertising be the first carbon neutral, or even regenerative industry."
Scope3 intends to license its emissions data as a "universal currency" to advertisers, agencies, and adtech companies but will offer the service for free for publishers, partly so it can get more information about how the different pieces of the adtech system connect to one another. The dataset is built through a mixture of numbers from cloud providers, public data about electricity use, surveying companies, and some predictive modeling, O'Kelley said. Scope3 later plans to offer its services across other verticals, such as enterprise software.
Scope3's launch comes as big advertisers like Unilever and Chanel are increasingly asking ad agencies to provide their sustainability metrics when pitching for their business, as Insider's Patrick Coffee reported last year. Experts have predicted that carbon emissions are set to play a bigger role in ad-buying decisions as more organizations pledge to achieve net-zero carbon emissions in the coming decades.
"You only need to look at the world's leading tech companies and Fortune 100 firms as to how serious they take this topic," said Greg Paull, principal ad marketing consultancy R3. "Nike, for example, have a more than 120-page report on how they are tackling it. It's time for the agencies and adtech to respond."
O'Kelley began work on Scope3 last spring as a side project at around the same time his other company Waybridge, a supply-chain platform that tracks the movement of raw materials, raised a $30 million Series B funding round from Rucker Park Capital, Craft Ventures, and Venrock Partners. Waybridge essentially returned some of the funding to the same investors, which in turn reinvested a $20 million seed round in Scope3.
Rucker Park Capital General Partner Marissa Campise and Venrock Partner Mike Tyrrell are joining O'Kelley on the Scope3 board. O'Kelley stepped down as Waybridge CEO earlier this month to run Scope3 full-time. He was replaced at Waybridge by Scott Evans, the company's cofounder.
Sometimes dubbed "the Godfather of adtech" by the advertising trade press, O'Kelley is best-known as the founder of AppNexus, once the largest independent adtech company, which sold to AT&T for $1.6 billion in 2018. AT&T sold Xandr, the advertising and analytics division that contained AppNexus, to Microsoft for an undisclosed amount late last year. Scope3's current team of six contains five former AppNexus and Waybridge employees.
O'Kelley is also known as the inventor of the online ad exchange, technology he built in the early 2000s in his role as chief technology officer of Right Media, an adtech firm that sold to Yahoo for $680 million in 2007.
