In this exclusive interview, Thomas Kolster, author of Goodvertising: Creative Advertising that Cares and The Hero Trap: How to Win in a Post-Purpose Market by Putting People in Charge, discusses how conversations around environmental, social and governance in ad tech have evolved over the last ten years and how companies can keep pace with their customers’ developing needs and expectations.
It's been a decade since your book Goodvertising: Creative Advertising that Cares published? How do you think ad tech’s approach to ESG has changed over this time?
I think that, in 2012, ad tech was predominantly focused on engagement and becoming smarter at driving up engagement rates. Nowadays, I think we’re seeing a plethora of other themes emerge as priorities. Privacy is a major one, particularly after Apple introduced Do Not Track. I also think we’re starting to see exciting tech ventures beginning to emerge. For example, in the media space, talk around climate emissions is increasing, not only in regards to the production of media, but also the consumption of media. Right now, we are only really scratching the surface of what’s to come, particularly with regards to ESG.
I also think that a broader shift in advertising is also on the horizon. The classic view of advertising is that it is something that predominantly interrupts people, but in fact it can be a really useful tool to engage, inform, and empower. A decade ago, we saw some early attempts from brands to connect with consumers, and this is becoming more and more prevalent. So I think there's lots of exciting things happening.
So whenever discussions of ESG arise, the term greenwashing usually isn't too far behind. But what does greenwashing look like and how can brands avoid falling into it?
I think the greenwashing discussion has reemerged, but with a vengeance - it’s now a much more forceful conversation. When I wrote my first book, there were conversations around greenwashing, but they didn't really pick up as much speed as one might have thought. I think today, greenwashing is very much the centre of discussions within ad tech and this means businesses have to be very smart about how they communicate with regards to ESG.
A lot of brands will run 30-second commercials to talk about what they’re doing to fix environmental and social issues, but essentially, they made a mess in the first place. They're the ones using a lot of energy to run their technology and store data, and consumers are becoming much more aware of this. So, to avoid falling into greenwashing, brands must engage in conversations around ESG in a much more clever and sophisticated way. Instead of talking about the brand’s ambitions, businesses should put themselves in ordinary people's shoes and think about how their technology generates value for them. How does their technology give consumers more choice? And how do they invite people on board? It is pivotal for brands to consider these questions and take them seriously.
How can brands successfully balance making their products and services as sustainable as they are appealing to consumers?
A decade or so ago, it was much easier for brands to utilise ESG issues to differentiate themselves and their products. As we’ve discussed, the industry has changed significantly since then and so brands need to adapt to keep up. In my more recent book, The Hero Trap: How to Win in a Post-Purpose Market by Putting People in Charge, I discuss approaching this “post-purpose market”, in which brands cannot expect to sell themselves on their values, as every business claims to have elevated their values and visions and commitments. Instead, brands need to ask themselves how they can make a meaningful difference in their customers’ lives. How can they take their customers on a journey to becoming more sustainable, healthier, less biased, etc.? A good example of this is IKEA as, although it’s still a fast furniture provider, it has committed to helping one billion people to live more sustainable lives by teaching consumers how to repair furniture and even offering meat-free alternatives in their stores’ canteens. How to offer customers, not just a product, but an experience that will improve their lives is something brands need to consider to keep pace in this changing market.
How do you predict the changing economic landscape and anticipated recession is going to impact ESG?
I think this is the first time in my living memory where we’ve seen big brands having to adjust to unrest going on outside of the industry. However, I think a recession would present a real opportunity for businesses to make strides towards sustainability. The real price of energy has never really been paid, as it has always been subsidised, but now that brands have to cut back on costs, one of the most effective ways to do this is to cut back on waste. When you have very little, you have to embrace smarter thinking and be clever with your resources.
The concern here is that, as we sometimes see in times of crisis, some brands will cut whatever doesn’t contribute to their bottom lines. Unfortunately, it’s very possible that we will see some companies who have paid lip service to discussions around purpose cut down on their sustainability efforts. What these companies fail to realise, however, is that investing in sustainability is critical to securing the longevity of their business.
Research has indicated that consumers are increasingly prioritising sustainability in their lives, and they expect the same from their brands. How can brands keep pace with consumers, increasing expectations, while also making impactful and meaningful change?
It’s vital for brands to remember that no social issues are ever at a standstill. With climate change, for example, one moment the conversation was all about net positivity and now it’s progressed to regeneration, i.e., lowering your carbon footprint whilst also cleaning up the mess you’ve already made. Expectations are rising every day and that’s why companies need to be at the forefront of these conversations by engaging with consumers.
Businesses can be involved by mirroring what's already happening in the marketplace, but it's better and much more interesting when they take on the role of moving the conversation. By connecting with consumers with a curious and open-minded approach, businesses can become integrated into conversations around social issues and remain in touch with what their customers expect from them.