Advertising is now tied to bottom-line business impact, and it’s revolutionizing every aspect of the advertising industry.

The days of marketers worrying about which half of their ad spend is being wasted are rapidly diminishing thanks to marketers now being able to measure their campaigns by outcomes. Instead of approximating whether a campaign resulted in a desired action, such as a qualified lead, a store visit or purchase, marketers can now know for certain whether their ads elicited such a response. This data “closes the loop” on campaign measurement, taking out a lot of the guesswork and delivering more tangible measurement results.

Outcome-based metrics are now the most important campaign performance indicator for buyers, according to industry trade group IAB. And outcome-based measurement will only grow in prominence as TV, the last major advertising channel to not be transformed by outcome-based measurement, becomes more measurable.

The case for outcome-based measurement is as simple as it is compelling: Measuring a campaign by its outcomes — instead of more superficial metrics, such as reach or impressions — allows marketers to more accurately know how a campaign impacts their business. Marketers can optimize their advertising spend according to those measurement results, making sure they're getting the most for their dollar.

The biggest revelation in outcome-based marketing is turning TV, which has long been hard to measure and used primarily as an upper-funnel, brand-building, into a performance marketing channel. Connected TV, or TV delivered through the internet, enables the data capture that makes outcome-based measurement possible. Now, brands can measure their TV spend by sales lift, according to Jason Fairchild, co-founder and CEO of tvScientific, an ad tech company specializing in CTV targeting.

Outcome-based measurement in CTV will radically transform how marketers approach the channel, Fairchild argues. Ad buyers will no longer be judged by how much money they spent on advertising, what Fairchild labels “input-based compensation,” and instead be judged by “value created.”

The move to outcome-based measurement will be so complete that even brand awareness campaigns, which have long been the least quantifiable of all campaigns, will be measured by outcomes, too, Fairchild adds. “Every campaign, even brand awareness, should tie to outcomes: brand site visits, geo-lift,” he writes. “This is totally doable.”

In the meantime, there is still space for campaigns aimed at building brand equity, especially for products with long sales cycles, or campaigns in which data collection is difficult, says Ari Paparo, CEO of Marketecture Media, a news platform covering the media industry.

“There are legitimate reasons why brands spend money on brand building,” Paparo tells The Outcome. “Think about car brands that expose an audience for years or decades before any purchase decision is imminent. Or with CPG brands, it may take weeks before the ad convinces people to buy, and the signal the advertisers get back is at best incomplete.”

There’s also a danger in focusing solely on outcomes, warns independent media analyst Andrew Lipsman. If a brand focuses only on outcomes, it might never be able to grow its audience and attract new customers.

“In a world where only outcomes mattered, brands would target only the consumers with the best likelihood of conversion,” Lipsman says. “That would narrow the universe of consumers who gain familiarity with your brand and growth would plateau. This is exactly what played out with D2C brands, which grew quickly out of the gate before ultimately hitting a wall.”

The famous quote about brands wasting half their ad spend is often attributed to 19th century retail tycoon John Wanamaker, the man credited with inventing the department store and pioneering the practice of truth in advertising. Wanamaker was a firm believer in the power of advertising — in 1874, he printed the first copyrighted store advertisement in American history. And yet even he conceded that gauging the effectiveness of his ad budgets was, at times, a guessing game.

Wanamaker couldn’t have foreseen a future in which marketers collect email and purchase data information on consumers, and connect that data to ad exposures to measure based on outcomes.

Under the new paradigm, marketers waste much less than half his ad budget. And the dream of outcome-based marketing is that one day, they will waste none of it.