What is MER (Marketing Efficiency Ratio)?

Understanding MER (Marketing Efficiency Ratio)

MER helps you understand overall efficiency across channels by comparing total revenue to total marketing spend, providing a portfolio view of marketing impact. It serves as a directional guardrail while channel-level metrics like ROAS and POAS guide tactical changes. Use MER to set pacing and investment envelopes, then optimize within channels using more granular metrics. Segment MER by category or region to avoid hiding weak areas in blended averages. Track trends monthly and quarterly to see structural shifts in efficiency as you scale or change channel mix.

MER differs from platform-reported ROAS because it includes all revenue (organic, direct, unattributed) and all marketing spend (creative, tools, agencies). This makes MER more honest but less actionable for day-to-day optimization. Pair MER with POAS to avoid margin blind spots where revenue grows but profit shrinks. Don't optimize solely to MER—keep channel levers active and use MER as a sanity check rather than the primary decision metric.

Why MER (Marketing Efficiency Ratio) matters

MER matters because it provides a portfolio view that shows whether total marketing spend is accretive to the business. It's useful for executive reporting, pacing decisions, and comparing efficiency across time periods. MER also serves as a sanity check against channel-level metrics to catch attribution gaps or measurement drift.

• Portfolio view: See if total spend is accretive.
• Planning: Useful for executive reporting and pacing.
• Sanity check: Compare to channel-level metrics.

How MER (Marketing Efficiency Ratio) works

MER works by dividing total revenue by total marketing spend over a defined period, giving you a simple ratio that shows efficiency at the portfolio level. Include all marketing costs—media, creative production, tools, and agencies—to keep the denominator honest. Track MER weekly or monthly alongside channel ROAS and POAS to spot trends. Segment MER by product category, region, or customer type to identify where efficiency is strong or weak. When MER trends down, diagnose by channel and creative to find the source. Use MER for strategic decisions like budget allocation and pacing, but optimize tactics using channel-specific metrics that tie to actions you can take.

Key Takeaways

• MER (marketing efficiency ratio) is total revenue divided by total marketing spend; it's blended ROAS.
• MER provides a high-level view of overall marketing efficiency across all channels.
• Use MER for strategic planning but segment by channel and SKU for tactical optimization.
• Improve MER by optimizing creative, feed quality, and product mix across all channels.