What is
MER
?
Marketing Efficiency Ratio (MER) is a holistic metric that measures the total revenue generated by a business relative to the total marketing spend across all channels. It is often referred to as 'Blended ROAS' and is used by executives to understand the big-picture impact of the marketing budget. MER is calculated by dividing total revenue by total ad spend. In a world where privacy changes (like iOS14) have made direct ad attribution difficult, MER has become a vital 'Source of Truth.' It captures the 'Halo Effect'—where a user might see an ad on Facebook, not click it, but later search for the brand on Google and buy. A rising MER indicates that the business is becoming more efficient at capturing value, while a falling MER suggests that the marketing spend is hitting diminishing returns. MER helps teams decide when to scale the overall budget, regardless of which specific channel is claiming the credit in their own dashboard.
Frequently asked questions.
Why use MER instead of ROAS?
MER accounts for the 'halo effect' where ads drive organic sales that aren't directly tracked.
What is a good MER for e-commerce?
A ratio between 3.0 and 5.0 is typically the sweet spot for profitable growth.
Does MER include organic revenue?
Yes, it is Total Revenue divided by Total Ad Spend.
When is MER most useful?
It's vital for post-iOS14 marketing where direct attribution data is often incomplete.
How to use MER for budgeting?
If your MER is rising, it signals you have 'room' to increase ad spend across all channels.
