The Outcomes Era Isn't Going Anywhere
In November, I argued digital advertising is in an Outcomes Era in which virtually every media seller, adtech company, and media buying partner is held to the standard of driving measurable outcomes for advertisers. Incremental sales are the ultimate outcome advertising exists to drive. The closer you can get to proof of driving incremental sales, the better off you are.
The Outcomes Era was a focal point of LiveRamp CEO Scott Howe’s remarks in the company’s early February earnings call. “There's been a lot of talk in our industry recently about marketing entering the Outcomes Era, a period in which all advertising is data-driven, accountable, and achieves measurable results,” Howe said. “This trend benefits LiveRamp as our network enables a personalized customer experience at scale across all touch points with the ability to measure and optimize outcomes for better performance.”
The thesis was also the subject of an AdExchanger byline by adtech influencer and product guy Erez Levin, with whom I’ve been having a debate publicly and privately about whether we’re in the Outcomes or Quality Era. “We have been in the Outcomes Era for over a decade,” Levin argued. “It is high time we exit it and embrace our entry into the Quality Era.” Erez came on my and Eric Franchi’s podcast, Open Market, yesterday to debate the topic.
When discussing whether we’re still in the Outcomes Era (and whether we should be), I think it’s worth revisiting the logic of the Outcomes Era thesis. Then, I want to address some objections to the thesis and explain why it matters whether we’re in the Outcomes or Quality Era.
The Brief Case for the Outcomes Era
Google and Meta have built the dominant businesses of the Outcomes Era and set the agenda for it. Due to their technology, data, scale, and dominance across the media supply chain, they are best positioned to claim, “Give us a dollar, and we will give you back sales.” AI is only exacerbating this dynamic. Performance Max and Advantage+ are the apotheosis of the Outcomes Era in advertising product form. The message is, “Don’t worry about what media you’re buying. Don’t even worry about how we’re buying it. Just tell us what outcomes you want, and we’ll deliver them as efficiently as possible.” Every adtech company and publisher is held to this standard, which is one way to explain why the hierarchy of digital advertising looks like it does.
But it’s not just the walled gardens that suggest we’re in an Outcomes Era. The two fastest-growing channels in advertising are commerce media and CTV. The commerce media phenomenon is fundamentally about outcomes; the media owners are closest to end customers and can use transaction data to ... drive transactions. This is why traditional media publishers continue their decades-long struggle to compete with the walled gardens, whereas commerce media has quickly become a robust business. (Think about Uber hitting a $1B advertising run rate in a couple of years.)
Meanwhile, the promise of CTV is to take brand advertising's favorite channel (TV) and transform it into a performance channel capable of delivering outcomes (hence tvScientific raising $25M this month). Even if you're not sold on performance TV specifically, CTV is about bringing digital targeting and measurement capabilities to TV. And what does that really mean? The ability to drive outcomes (better than a traditional brand advertising channel such as linear).
The Debate on the Outcomes Era
To all of this, I’ve heard a number of objections that might lend nuance to the Outcomes Era thesis:
1. The Outcomes Era is a reality, but it’s led advertisers to trust opaque tech platforms such as Google and Meta that claim to deliver sales but don’t really drive as many incremental sales as they claim.
This may be true, but it doesn’t actually portend the end of the Outcomes Era. To the extent that concerns are growing about Meta and Google’s failure to deliver incremental ROAS, the way to beat them won’t be saying, “We offer high-quality media.” The way to beat Google and Meta if you believe they don’t drive incremental sales is to argue and prove that your channel or platform does drive incremental sales. In other words, the war is still being fought on the terrain of outcomes. There will not be a move away from outcomes — just a battle over how to measure and best drive them.
2. Media quality is the best factor to drive outcomes, so we should just optimize for quality, and outcomes will come.
Media quality is a factor in evaluating media’s value, and it will continue to be relevant — perhaps even more relevant in the years to come. But it will not be the only signal advertisers consider to inform media buying. It will be one factor among others, all cobbled together in the pursuit of the only outcome that really matters (more sales).
3. It would be better for the information ecosystem, democracy, and the world if quality, not outcomes, were the dominant paradigm of advertising.
This is about your lens: descriptive or prescriptive. Are you describing what's true? Or what you wish were true? From a business perspective, prescriptivists are strategically problematic — they want to optimize for a world that should exist but doesn't. My goal is not to describe the ideal world. It is to come up with frameworks that describe the world as it is to help my clients navigate it and capitalize on its opportunities.
I think it would be a big mistake to orient a company around quality instead of outcomes if both routes are available based on the company’s product and customer base. Search and social: $500 billion. Linear TV: $60 billion. AppLovin: $127 billion. DoubleVerify: $3.7 billion. Do you want to sell “We drive sales” or “We sell high-quality media”? I think the answer is clear.
4. There are signs of a shift toward quality: TTD’s “premium internet” and acquisition of Sincera, the anti-MFA hype cycle, supply chain optimization picking up steam, and perennial discussions of brand safety, to name some examples.
I agree — the industry is more concerned about quality today than it was two years ago. In fact, the week after I wrote the initial Outcomes Era piece, I wrote a piece on 2024 being “a year of quality in advertising’s Outcomes Era.” But as per all previous points, this doesn’t mean quality is overriding outcomes as the dominant paradigm of advertising. It means advertisers and their partners are looking to capitalize on a potential connection between media quality and outcomes to drive better outcomes — as they should. Media quality remains a factor among others (though undoubtedly an important and even increasingly important factor).
Why You Should Care About the Outcomes Era
Why debate concepts like the Outcomes Era or the Quality Era? Why develop theses like Eric Seufert’s “Everything is an Ad Network”? My goal is to describe the state of the industry with as much analytical clarity as possible to enable the companies with which I work and anyone reading this to position themselves and their company in relation to the incentives and dynamics of the ecosystem. In other words, you need to see the state of play clearly to capitalize on it.
In advertising, everything is downstream of advertisers. People will muddle this for all sorts of reasons (ideological, self-interested, etc). But there's a reason TTD is more than 20x the size of Magnite. The buyers set the terms. And no programmatic buyer is going to her boss saying, "We didn't drive more sales last quarter. But we bought high-quality media!"
When the rubber hits the road, outcomes matter most. Anyone trying to make a buck in this industry needs to reckon with that as they evaluate their product roadmap and go-to-market strategy.
