MER calculator: marketing efficiency ratio and aMER
MER, the marketing efficiency ratio, is your total revenue divided by your total marketing spend: how many dollars of sales came with each marketing dollar. Drag your month onto the chart, or type your store's total revenue and marketing spend for one period. The break-even line comes from your gross margin, so you can see at a glance whether marketing paid for itself, and how far spend can grow before it doesn't.
MER, the marketing efficiency ratio, is your total revenue ÷ your total marketing spend: the dollars of sales that came with each marketing dollar, whichever channel the platforms credit.
Your MER
Total revenue ÷ total marketing spend for one period. Also called blended ROAS. 4x means marketing cost 25% of revenue.Profitable4.00x · $42,000 kept after marketing
Every $1 of marketing came with $4.00 of store revenue. At a 60% margin you break even at 1.67x: below that line, marketing costs more than the gross profit it brings in.
Drag your month around the chart, the blue new-customer point up or down, and the pink break-even line to change your margin.
- Break-even 1.67x at a 60% margin; the shaded area below it loses money
- New-customer revenue: aMER 1.80x
- What the platforms claim: $96k
Your ad platforms credit themselves with 80% of your revenue. The rest came from email, search, word of mouth and repeat buyers.
- Marketing as a share of revenue
- 25.0%
- aMERAcquisition MER: revenue from first-time buyers ÷ marketing spend. It shows how well marketing wins new customers, without the repeat buyers who'd order anyway.
- 1.80x
- Returning-customer revenue
- $66,000 (55%)
- Blended platform ROASThe revenue ad platforms credit themselves, added up, ÷ spend. It runs above MER when two platforms claim the same order.
- 3.20x
- Break-even MER1 ÷ gross margin: the MER where marketing costs exactly the gross profit it brings in. 1.67x at a 60% margin.
- 1.67x
- Gross profit after marketingRevenue × gross margin − marketing spend: what's left for salaries, rent and profit.
- $42,000
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How to read your number
MER, the marketing efficiency ratio, is your total store revenue divided by your total marketing spend. $120,000 on $30,000 is 4.00x, so marketing ran at 25% of sales. At a 60% gross margin you break even at 1 ÷ 60% = 1.67x, so 4.00x leaves $42,000 of gross profit after marketing. aMER counts only first-time buyers: $54,000 ÷ $30,000 = 1.80x.
Why it matters
Ad platforms each credit themselves with the same orders, so platform ROAS added up overstates what ads did. MER can't be double-counted: it's your bank account's view. Use it to set the total budget, and platform ROAS only to move money between campaigns inside it.
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Formula
MER = total revenue ÷ total marketing spend
Total revenue is every order in the period from every channel, not only the ones an ad platform claims. Total marketing spend is every paid channel, and creators, affiliates and agency fees if you choose to count them. A 4x MER means marketing cost 25% of revenue.
New to the term? Read what MER means in the glossary.
Other ways to calculate MER
- Blended ROAS
- Blended ROAS = total revenue ÷ total ad spend
- The same idea as MER with only ad platform spend underneath. Most stores use the two names for one number; say which spend you include.
- aMER (acquisition MER)
- aMER = revenue from new customers ÷ total marketing spend
- When repeat buyers make up a big share of sales. Returning customers would buy anyway, so aMER shows what marketing does to win new ones. Also written nc-ROAS or new-customer ROAS.
- Marketing cost ratio
- Marketing cost ratio = total marketing spend ÷ total revenue
- The same number flipped, as a percentage: a 4x MER is a 25% marketing cost ratio. Finance teams often budget this way.
- Net MER
- Net MER = (revenue − returns − discounts) ÷ total marketing spend
- When returns or discounts are large or change from month to month, so a sale that came back doesn't count.
- Platform ROAS
- Platform ROAS = revenue the platform credits ÷ that platform's spend
- For comparing campaigns inside one platform. Don't add platforms together and call it MER; the same order can be credited by more than one.
What is MER?
MER, the marketing efficiency ratio, is how many dollars of store revenue you made for every dollar of marketing. It's also called blended ROAS. A store with $120,000 of sales and $30,000 of marketing has a 4x MER.
Unlike platform ROAS, it doesn't depend on any ad platform's attribution. It only needs two numbers your accounts already agree on, which is why it's the number to set a total budget against.
MER vs ROAS
- What's counted. MER uses every sale and every marketing dollar. ROAS uses only the sales an ad platform credits to its own ads.
- Double counting. Meta and Google can both claim one order, so platform ROAS added up can exceed your real revenue. MER can't.
- What it's for. MER tells you whether marketing as a whole pays. ROAS tells you which campaign to cut or scale.
- How they move. Spend more on prospecting and ROAS often falls while MER holds, because new buyers come back later through email and search.
How to calculate MER: a worked example
A skincare store makes $120,000 in a month and spends $30,000 on Meta, Google and creators. $54,000 of the revenue came from first-time customers, the ad platforms together credit themselves with $96,000, and gross margin is 60%.
- MER = $120,000 ÷ $30,000 = 4.00x, so marketing ran at 25% of revenue
- aMER = $54,000 ÷ $30,000 = 1.80x
- Blended platform ROAS = $96,000 ÷ $30,000 = 3.20x; the platforms claim 80% of revenue
- Break-even MER = 1 ÷ 60% = 1.67x
- Gross profit after marketing = $120,000 × 60% − $30,000 = $42,000
At 4.00x the store is well above its 1.67x break-even. The 1.80x aMER says most of that margin comes from returning customers, so the next question is what a new customer is worth over time.
What is a good MER?
A good MER is one above your break-even MER, and break-even is 1 ÷ gross margin: 1.67x at 60%, 2.5x at 40%. Below it, marketing costs more than the gross profit it brings in.
How far above depends on what else comes out of gross profit, like salaries, rent and software. A store that wants 15% of revenue left after marketing at a 60% margin needs 1 ÷ (60% − 15%) = 2.22x. For aMER, compare with what a new customer earns over time using the LTV calculator: a low aMER can be fine when new buyers come back.
| Gross margin | Break-even MER | MER to keep 15% of revenue |
|---|---|---|
| 30% | 3.33x | 6.67x |
| 40% | 2.50x | 4.00x |
| 50% | 2.00x | 2.86x |
| 60% | 1.67x | 2.22x |
| 70% | 1.43x | 1.82x |
| 80% | 1.25x | 1.54x |
How to use MER and ROAS together
- Set the budget on MER. Pick the MER that leaves the profit you need, then raise spend until MER falls to that line.
- Split the budget on ROAS. Inside that total, move money from campaigns below their platform's usual ROAS to the ones above it.
- Watch aMER as you scale. If MER holds but aMER falls, spend is reaching people who would have bought anyway.
- Check it weekly, not daily. Orders lag clicks, so a single day's MER swings. Replo's automated reports can send MER and aMER on the schedule you set.
Questions about MER
- What is MER in marketing?
- MER is the marketing efficiency ratio: total store revenue divided by total marketing spend for the same period. $120,000 of revenue on $30,000 of marketing is a 4x MER, so marketing cost 25% of sales.
- What is a good marketing efficiency ratio?
- Any MER above 1 ÷ your gross margin. At a 60% margin that's 1.67x; at 40% it's 2.5x. Many stores aim higher to leave room for overheads, such as 2.2x at a 60% margin to keep 15% of revenue.
- Is MER the same as blended ROAS?
- Yes, in practice. Both divide total revenue by total spend. Some teams use blended ROAS for ad spend only and MER for all marketing, including creators and agency fees, so say which spend you include.
- What is aMER?
- aMER, acquisition MER, divides revenue from first-time customers by total marketing spend. It strips out repeat buyers who would have ordered anyway, so it shows how efficiently marketing wins new customers.
- Why is my MER lower than my ROAS?
- Usually because the platforms over-credit themselves. Meta and Google can both claim the same order and count some sales after a view, so their ROAS runs high. MER divides real revenue by all spend, including creators and fees the platforms never see.
- How do you calculate MER?
- Add up every order's revenue for a period, add up every marketing dollar for the same period, and divide revenue by spend. $120,000 of revenue on $30,000 of marketing is a 4x MER.
Do it with Replo
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Prompt: “send me MER and aMER by week every Monday”
