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MER (marketing efficiency ratio)

MER is the ratio of a store's total revenue to its total marketing spend over the same period, without splitting sales by channel.

How it works

MER puts everything the store sold against everything it spent on marketing. It does not ask which channel brought each order, so it needs no attribution model: revenue comes from the store’s own records, not from what each ad platform claims.

The trade-off is detail: MER shows whether marketing as a whole pays back, but not which channel or campaign did the work (when to choose MER over ROAS). Its revenue includes sales that no ad touched, such as repeat orders. If marketplace sales are counted in revenue, it also takes in any halo effect of ads on them.

There is no single benchmark: it depends on margin, the share of repeat customers and how much revenue arrives without ads.

Formula

Total store revenue ÷ total marketing spend

Ways to calculate

Use the same version every month. Otherwise the trend shows a change of method rather than a change in efficiency.

Example

Example store, not client data.

The tableware shop spends 40,000 on Google Ads, which reports 180,000 of conversion value: a ROAS of 4.5. It also spends 10,000 on Meta ads and 10,000 on an email tool and agency fees. Its total revenue for the month is 300,000.

MER on ad spend only = 300,000 ÷ 50,000 = 6.0. MER on all marketing costs = 300,000 ÷ 60,000 = 5.0.

Not to be confused with

  • ROAS — the revenue one ad account credits to its own ads, divided by that account’s spend. It serves decisions inside the account; MER serves the business as a whole.
  • Revenue — in this glossary, the revenue that ads brought in, as the ad account counts it, rather than the store’s total sales.

Right and wrong readings

  • Wrong: “MER is 5.0 and Google Ads ROAS is 4.5, so Google Ads under-reports its sales.” Right: the 300,000 also includes repeat orders and sales from other channels, so MER cannot show how much of the gap comes from Google Ads.

Sources