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MER stands for Marketing Efficiency Ratio. It measures the ratio of total revenue to total marketing spend across all channels. Unlike channel-level metrics, MER shows overall marketing performance.
MER is calculated by dividing total revenue by total marketing spend.
MER = Total Revenue ÷ Total Marketing Spend
For example, if your brand generates $100,000 in revenue and spends $20,000 on marketing, your MER is 5.0.
Many ecommerce brands target an MER of 4-6. Higher-margin brands can operate with lower MERs. Lower-margin brands need higher MERs to stay profitable. But ultimately, a good MER depends on your margins and business model.
To analyze MER properly:
A declining MER can signal inefficient spend, rising costs, or pricing issues.
MER helps you understand marketing performance. It prevents tunnel vision on individual platforms and shows whether your overall marketing strategy will be sustainable as you scale.
You can improve MER by:
ROAS measures performance at the channel or campaign level. MER measures performance at the business level.
ROAS helps optimize ads. MER helps decide whether your overall marketing strategy is profitable.
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