Understanding MER and optimizing holistically
Marketing Efficiency Ratio is the most honest metric for marketing efficiency – because it simply bypasses attribution problems.
Marketing Efficiency Ratio (MER), also known as Blended ROAS or Marketing Efficiency, views your marketing as a complete system. Instead of evaluating each channel individually, it measures the ratio of total revenue to total marketing spend.
MER vs. ROAS: What's the difference?
ROAS evaluates individual campaigns or channels based on attribution. The problem: In a multi-touch world, attribution is error-prone. MER circumvents this by looking at everything together.
Use MER as your north-star metric for overall assessment and ROAS for channel optimization. Both have their place.
Why MER became more important since iOS 14
With iOS 14 and increasing privacy restrictions, tracking became less accurate. Platform ROAS is often 30-50% overstated. MER remains unaffected because it only looks at inputs (spend) and outputs (revenue) – not the path between them.
Calculating MER correctly
For a meaningful MER, include all marketing expenses:
- Paid Media: Google Ads, Meta, TikTok, Display, Affiliate, etc.
- Content & SEO: Content production, SEO tools and services
- Email Marketing: ESP costs, team time
- Influencer: Partnerships and commissions
- Optional: Creative production, agency costs
Interpreting MER trends
A single MER number says little. What's interesting is the trend over time:
- 1 MER rises with increased spend: Efficient scaling – more budget makes sense.
- 2 MER falls with increased spend: Scaling problems – check channel efficiency.
- 3 MER stable with more spend: Linear scaling – budget optimally distributed.
- 4 MER rises with same budget: Efficiency gains – optimizations working.
Also note: MER responds with a delay to marketing activities. Brand campaigns often show impact only after weeks. Therefore, always analyze longer time periods and rolling averages.