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MER is the share of your store’s revenue that goes back into ads. Upstack divides all spend from your connected Meta, Google and TikTok ad accounts by Total Revenue from your Shopify orders over the same dates. Lower is better.

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Formula

MER = ( Total Ad Spend ÷ Total Revenue ) × 100

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Formula Components

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How Upstack calculates MER

Spend and revenue are matched by date, not by attribution. For each day, Upstack takes that day’s ad spend and that day’s Shopify orders. No attribution model is involved, so an order counts toward MER whether it came from an ad, an email or a direct visit. Period totals are a ratio of sums. For a month, Upstack divides the month’s total spend by the month’s total revenue. It doesn’t average 30 daily MERs, which would let one low-revenue day distort the result. Your Reporting settings decide which orders count. Count pending orders as revenue, Count voided orders as revenue and Exclusion Filters under Settings → Reporting all change Total Revenue, and with it MER. Only synced ad spend is in the numerator. Agency fees, influencer payments and other costs you enter in Cost Settings aren’t part of MER, even when they’re marketing costs.

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Example

A skincare brand spends $48,000 across Meta ($31,200), Google ($12,600) and TikTok ($4,200) in April, and books $214,600 in Total Revenue. Spend was front-loaded for a launch in week 1: Upstack reports 22.37% for April ($48,000 ÷ $214,600). Averaging the four weekly values would give 22.91%, because it weights the expensive launch week the same as the cheaper weeks that followed.

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How to interpret MER

  • Your margin sets the ceiling, not a benchmark. If you keep 40 cents of each revenue dollar after product, shipping and payment costs, spending more than about 40% of revenue on ads loses money before fixed costs. CM2 ROAS does this math with the costs you’ve configured.
  • A rising MER has two causes. Spend grew faster than revenue, or revenue fell while spend held. Check New Customer MER and Returning Customer MER. Both use the same total spend, so a drop in repeat revenue pushes MER up even when acquisition is healthy.
  • Shipping and tax inflate the denominator. For stores that collect a lot of either, MER (Net Sales) is closer to product economics.
  • Use a week or longer. Spend lands on the day an ad runs while the purchase may come days later, so daily MER is noisy.

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Why MER differs from ad platform ROAS

An ad platform’s ROAS divides the conversion value that platform claims by that platform’s spend. MER divides all store revenue by all platforms’ spend. A platform can report a strong ROAS while MER worsens, for example when two platforms claim the same order. MER can’t double-count an order, because each Shopify order appears once. MER also won’t match a Shopify report that subtracts returns. Total Revenue uses the order total at checkout, before refunds.

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FAQ

They use the same two numbers, flipped. Upstack’s ROAS is Total Revenue ÷ Total Ad Spend, so an MER of 25% is a ROAS of 4.0x. MER reads as a cost share of revenue, which makes it easier to compare with margin percentages.
It depends on your margins. Work out the share of revenue you keep after variable costs. Your MER has to stay below it for ads to pay for themselves, and further below it to cover fixed costs.
No. The numerator is spend synced from connected Meta Ads, Google Ads and TikTok Ads accounts. Other marketing costs go in Cost Settings and reduce CM3 or CM4, depending on their category.
Total Revenue follows Settings → Reporting. Excluding pending or voided orders, or adding an exclusion filter, shrinks the denominator and raises MER.
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