In this session we look at Marketing Efficiency Ratio (MER) and why our team uses it as a core metric to growing ecommerce brands.
Marketing Efficiency Rating (MER) exists to measure every ad dollar out against every revenue dollar in. It answers the big-picture question: How much did we make based on how much we spent?
The calculation is simple: Total Revenue divided by Total Marketing Investment equals MER
$15k in revenue on $5k in spend equals an MER of 3.0.
$15,000 / $5000 = MER of 3.0
The core reasons for looking at MER are:
1. The challenging landscape of digital measurement
2. Consumer behaviour is rarely ever linear
Path to purchase
How does ROAS fit in:
Useful for in-platform, campaign, ad copy, ad type optimisation
What is a ‘Good MER’
What are we Really Wanting to know:
When does my next dollar stop making me money