MER: the metric that shows whether the marketing as a whole is working
MER is total revenue divided by total marketing spend for the same period. If in a month revenue is BGN 100,000 and advertising spend across all channels is BGN 20,000, MER is 5. Unlike the return in advertising platforms, MER does not depend on attribution, cookies or conversion windows: it compares two numbers that already sit in your accounts. That is why it catches the case that individual reports hide: the sum of revenue attributed in the platforms exceeds actual revenue. MER also has limits. It does not say which channel brings the growth, it is affected by organic sales and seasonality, and it is read as a trend, not for a single day.
My name is Hristiyan Panov — a performance marketing consultant with over 5 years’ experience and over €2 000 000 Managed advertising budgets for over 90 companies on Google and Meta. Below is an explanation of how MER is calculated, when it is more useful than ROAS, and where it can be misleading.
Why does MER solve a problem that ROAS cannot?
This is because advertising platforms each claim credit for the same sales. Google sees its share, Meta sees its share, and the total often exceeds the actual turnover. The more channels you use, the greater the discrepancy.
The mechanics are simple. A buyer sees an ad on Instagram, then searches for the brand on Google and buys. The two platforms each record this order for themselves, each according to its own conversion window and its own attribution model. Neither removes the duplication, because it cannot see the other’s data.
The check is short. Add up the attributed revenue from all platforms for the same month, bring the periods to one time zone and compare the sum with the revenue in the order system. The difference is the size of the duplication.
MER does not have this problem, because it does not ask who deserves the credit for the sale. It asks only: how much came in and how much did we spend to bring it in. That is why it does not move when cookies, consents or attribution windows change.
How is it calculated in practice?
Take the monthly turnover from the order system — not from the advertising platform. Divide it by the total amount spent on marketing: advertising budget by channel, fees, tools and content production.
The figure in itself means nothing. What matters is its trend over the months and its relationship to your margin — with a 30% MER below 3.33, it means that marketing is eating into your profits.
When does MER reveal a problem that the platforms are concealing?
The classic scenario: returns on Google and Meta are improving, whilst the MER remains static. This almost always means that the two channels are competing for the same customers, rather than bringing in new ones.
The opposite scenario: MER improves, whilst returns on the platforms fall. This is usually a sign that you’ve started acquiring genuinely new customers — more expensive at first glance, but with a greater overall impact.
What are the limitations of MER?
- It doesn’t say which channel is on. It shows the health of the system, not the direction of the budget. If MER falls, it does not tell you whether the cause is a new campaign, a raised budget, a pricier auction or a lower average basket — that is looked for in the reports by channel.
- It is distorted by the organic cycle. A strong brand raises MER without any credit to the advertising. The seasonal peak and a one-off large order do the same. That is why you should also track a variant that excludes brand searches and direct traffic.
- He was slow to react. It is useful by month, useless by day. Spend is charged immediately, while part of the revenue comes days or weeks later — over a short period the numerator and the denominator describe different orders. That is why periods of equal length are compared — calendar month against calendar month.
- It combines new and returning customers. A growing share of repeat orders raises MER exactly while acquiring new customers gets more expensive. For a decision on how much to pay for a new customer you need CAC and LTV.
How are the three indicators used together?
- MER — does the whole thing work. It is looked at monthly by the owner, against the revenue in the accounts, not against the platform’s report. The direction over recent months is read, not the value for a single month.
- Return on investment by campaign — where the next lev should go. It is looked at weekly by the person who manages the accounts, at campaign and ad set level, over a period with enough orders.
- ROAS threshold — below which number you lose. It is calculated once and recalculated when prices or margin change, and also when the delivery cost or the share of returned orders changes.
The order matters. First the threshold ROAS — it sets the bar. Then MER, to see whether the whole stands above it. Finally the reports by campaign, to move the budget. The reverse order leads to optimising a campaign that does not bring a profit anyway. When the three disagree, the number that comes from the order system leads, not the one from the advertising interface.
What is a good MER?
There is no one-size-fits-all answer — it depends entirely on your profit margin and the proportion of repeat purchases. The useful threshold is your own: the MER at which profit covers fixed costs and leaves something to spare. Anything below that is revenue growth at the expense of profit.
The limit is derived, not borrowed from outside. Divide one by your gross margin, expressed as a share — you get the MER at which gross profit exactly eats the marketing spend. That is the zero, not the target. On top of it add the fixed costs: salaries, rent, software, payment fees. The resulting number is the lower limit below which the month ends in the red.
After that, compare only with yourself. The same MER means different things for a shop with a high share of repeat orders and for one that buys its customers from scratch every month. That is why you read the direction over recent months together with changes in prices, delivery and product mix.
FAQ — Frequently Asked Questions about MER
Is organic turnover included?
Yes, in the standard MER. If you want to see the effect of the advert alone, also monitor a variant that excludes branded searches and direct traffic.
How does it compare to ROAS?
ROAS relates to a single campaign and depends on attribution. MER relates to the entire business and is not dependent on it. The two are not interchangeable.
How long does it take?
On a monthly basis, looking back over the last six months. Shorter periods tend to produce more noise than signal.
Can MER grow whilst business is going downhill?
Yes — for example, in the event of a sharp drop in advertising. Turnover falls more slowly than expenditure, and the MER looks good precisely whilst you’re losing market share.
What should I include under marketing expenses?
Everything you wouldn’t have to pay for if you stopped marketing: media, fees, tools, production.
Conclusion
Advertising platforms are designed to measure their own contribution. MER is the figure that cannot be embellished by attribution — which is why it’s the first thing I want to see before I assess whether an account is genuinely growing.
If your platforms are showing growth that isn’t reflected in your takings, start by arranging an independent review.
Request a quote for a digital audit →
Related articles: CAC and LTV · ROAS and margin thresholds · GA4 and Google Ads
