What is MER? (Meh.)

Your marketing efficiency ratio is calculated by dividing your revenue by your total marketing spend. Total Revenue/Total Marketing Spend. It is a holistic view of your marketing budget and whether it’s being used wisely.

When to use MER

Use it to survive. If your Meta ROAS is a sad 1.5x, throw out the MER, which is hopefully a nice 3-4x.  MER is the adult in the room who steps in to say,  “Not everything is going to shit, and we are making more than we are spending . In all seriousness, it’s the metric you use when your ROAS has gone to shit. It’s the only number that will let you believe you’re making more than you’re spending. It is your last line of defense, but it also provides hope.

MER V ROAS V ROI

MER should factor all of your campaign spend. Realistically, it probably factors everything under your marketing nominal code, often called blended ROAS. ROI (Return on Investment) factors in other marketing costs outside of ad spend, i.e, content props that might have been used in an ad. Agency fees, software costs, and any additional tools that were used, for example.  ROAS is specific to ad spend; it can also be broken down into platform ROAS. ROAS can differ from Meta, Google, to Native, for example.

• ROAS tells you, “For every £1 I paid to Meta for an ad, I made X dollars in revenue.”

• MER tells you, “For every £1 I spent on my entire marketing department/budget, I made Y in total revenue.”

• ROI tells you, “After paying for meta ads, creative props, the agency, the staff salary, and the product itself, I made one quid.”

Limitations of MER

As with ROAS, it doesn’t account for unit economics; it just shows you covering your marketing costs. They only show revenue, not profit. If you like, you could call it your “North Star” metric to show you’re in control of marketing spend.