Analytics
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MER
Marketing Efficiency Ratio: revenue over a period divided by total marketing spend. It shows whole-marketing efficiency when platform ROAS is inflated.
Detailed explanation
The usual formula is revenue ÷ marketing cost (some teams invert it). When multi-touch attribution breaks, channel ROAS can look heroic while the cash register disagrees. MER stays closer to the P&L.
Returns, VAT, and COGS may sit outside MER. A high MER with a thin margin can still lose money.
Watch it weekly so budgets are not moved only because “Facebook ROAS is 8x”. It is not a north-star metric; read it with cash and margin.
Frequently asked questions
- How is MER different from ROAS?
- ROAS is usually one campaign or platform. MER uses all marketing cost against business revenue.
- What is a good MER?
- It depends on sector and margin. There is no magic number—track the trend next to profitability.
Related terms
Internal links for the topic cluster — read these concepts together.
- ROASROAS (Return on Ad Spend) is the revenue generated for every unit of advertising spend; it is used to measure profitability in performance marketing.
- ROIReturn on investment: (revenue minus cost) divided by cost. It says whether the spend paid back, in a unit you can compare across channels — if the revenue and cost definitions stay honest.
- Profit MarginProfit Margin is a core financial performance indicator that shows the percentage of a business's total revenue that becomes actual profit, revealing how much of sales converts into real earnings.
- Attribution ModelAn Attribution Model is a measurement framework that determines how much credit for a conversion should be assigned to each channel or ad a user interacted with during their purchase journey.
- North Star MetricA North Star Metric is the single, top-priority performance indicator that best reflects a company's long-term success and the core value it delivers to customers.