MER (Marketing Efficiency Ratio) measures what percentage of your total revenue is spent on advertising—lower is better.
Marketing Efficiency Ratio = ( Total Ad Spend ÷ Total Revenue ) × 100
| Metric | Definition |
|---|
| Total Ad Spend | Sum of advertising spend across all connected platforms |
| Total Revenue | Complete order revenue including shipping and taxes |
| Metadata | |
|---|
| Type | Percentage |
| Data Source | Shopify, Ad Platforms |
| Aggregation | Ratio |
Example
Your store generated $250,000 in order revenue while spending $50,000 on ads:
| Total Revenue | Total Ad Spend | MER |
|---|
| $250,000 | $50,000 | 20% |
| $250,000 | $75,000 | 30% |
| $250,000 | $30,000 | 12% |
How It Works
MER divides your total advertising spend by your total order revenue, then multiplies by 100 to express it as a percentage. Unlike ROAS (which is Revenue ÷ Spend), MER shows the inverse—what fraction of your revenue goes to advertising. Lower MER values indicate better efficiency.
When to Use
| Scenario | Action |
|---|
| Setting efficiency targets | Define maximum acceptable ad spend as % of revenue |
| Comparing time periods | Track if marketing efficiency improves over time |
| Budget planning | Determine how much revenue to reinvest in ads |
| Profitability analysis | Combine with margin data to ensure ads are profitable |
| Metric | Relationship |
|---|
| ROAS | Inverse metric: Revenue ÷ Spend (higher is better) |
| Total Revenue | The denominator in MER calculation |
| Blended Spend | The numerator in MER calculation |
| CAC | Cost per new customer acquired |
