Marketing efficiency ratio (MER) vs ROAS
MER divides total revenue by total marketing spend. How it differs from ROAS, a worked example, and when each is the better number.
The short answer: marketing efficiency ratio (MER) is total revenue divided by total marketing spend, across the whole business. ROAS (return on ad spend) is revenue the ad platform attributes to its own ads, divided by the spend on those ads. MER cannot be double-counted, so it is steadier. ROAS tells you about one campaign or platform, but only as far as you trust its attribution.
The formulas
- MER = total revenue ÷ total marketing spend
- ROAS = revenue attributed to a platform or campaign ÷ spend on it
A worked example (illustrative)
- Total revenue in the period: $2.4M. Total marketing spend: $600K. MER = $2.4M ÷ $600K = 4.0.
- Google reports $1.1M of attributed revenue on $250K of spend: ROAS 4.4. Meta reports $1.3M on $200K: ROAS 6.5. LinkedIn reports $0.4M on $150K: ROAS 2.7.
- The platforms together claim $2.8M of revenue, more than the business actually made.
That is the double-counting problem again: each platform credits itself, so ROAS figures add up to more than reality. MER stays at 4.0 because it only uses real total revenue. See Meta and Google both claim the same conversion.
When to use which
- MER for the overall health of marketing spend, and for judging whether total spend can be scaled.
- ROAS for day-to-day optimisation inside one platform, where relative movement matters more than the absolute number.
- CRM revenue by channel for deciding between channels, because neither MER nor ROAS tells you which channel closed the deal.
A note for B2B
With long sales cycles, revenue this month came from spend in earlier months, so a single month's MER can mislead. Use a rolling window that matches your sales cycle, and consider pipeline-based versions of the ratio alongside revenue.
Related: blended CAC and the funnel calculator.
Questions people ask
What is MER in marketing?
Marketing efficiency ratio: total revenue divided by total marketing spend for the whole business.
What is the difference between MER and ROAS?
ROAS uses the revenue a platform attributes to its own ads. MER uses total business revenue and total marketing spend, so it cannot be double-counted.
What is a good MER?
It depends on your margins and business model. A useful MER is one that leaves you profitable after costs, so judge it against your own margin and payback targets.
Why do ROAS figures add up to more than my revenue?
Each platform claims the conversions it touched, so the same sale can be counted by several platforms. MER avoids that by using real total revenue.
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