What is the Marketing Efficiency Ratio (MER)?

sakibkhan29188 · Post by **sakibkhan29188** » Sun Apr 20, 2025 4:52 am

The MER is a measure of the efficiency of a company's marketing activities. MER stands for Marketing Efficiency Ratio or Media Efficiency Ratio. To determine the MER, the total costs for marketing and advertising are compared to the total revenue generated.

A higher MER value indicates that a company is able to generate greater revenue with singapore phone number data lower costs. A lower MER value, accordingly, indicates inefficient marketing spending.

The MER thus serves as an indicator of the effectiveness and profitability of a company's marketing approach. Calculating the target MER for a defined profitability goal allows you to measure efficiency in relation to profit and thus make comprehensive budget decisions.

Like ROAS, MER is expressed as a ratio. A revenue of €15,000 with a spend of €5,000 corresponds to a MER of 3.0. Unlike ROAS, however, MER isn't suitable for making media buying decisions at the ad or campaign level. Rather, it's a holistic North Star metric that shows you, at a meta-level, how profitable your company is.

How do you calculate the MER?
As already mentioned, the Marketing Efficiency Ratio shows the relationship between total marketing costs and total revenue. The formula for calculating it is:

Formula for calculating the MER (Marketing Efficiency Ratio)
Formula for calculating the MER
You're probably wondering how MER addresses the fact that not all marketing measures involve ad spend. Of course, paid marketing channels like Facebook Ads or Google Ads influence your overall revenue, but there are many other influencing factors besides these. Email marketing, for example, has relatively low costs and a high conversion rate. So how do you address this when evaluating your advertising channels? The answer is simple: Zoom out to the meta level. The greater the gap between your marketing costs and your overall revenue, the higher your MER, and the more you should reinvest this freed-up budget in paid advertising to further drive your revenue growth.