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Performance

MER (Marketing Efficiency Ratio)

Also known as: blended ROAS · marketing efficiency ratio

Definition

MER is total company revenue divided by total marketing spend across all channels. Because it ignores attribution entirely, it cannot be inflated by platforms claiming the same conversion.

MER is deliberately crude, and that is its strength. It takes every dirham of revenue and every dirham of marketing cost and produces one ratio that no platform can game. When channel-reported ROAS rises while MER stays flat, the channels are re-attributing existing demand rather than creating new demand.

The right MER target depends entirely on gross margin. A business keeping 60% after all variable costs breaks even around 1.7 MER; one keeping 30% needs above 3.3. Set the floor from the P&L, then judge every channel decision against whether blended MER held.

Formula

MER = Total revenue ÷ Total marketing spend

More in Performance

Attribution window

An attribution window is the period after an ad interaction during which a resulting conversion is credited to that ad — commonly 1, 7 or 28 days for clicks and 1 day for views.

CAC (Customer Acquisition Cost)

CAC is the total sales and marketing cost required to acquire one new paying customer over a given period, including media spend, agency fees, tooling and salaries.

Cohort analysis

Cohort analysis groups customers by a shared starting characteristic — usually acquisition month — and tracks their behaviour over time, revealing retention and value patterns that blended averages hide.

Consent mode

Consent mode is a mechanism that adjusts how analytics and advertising tags behave based on a user's consent choices, allowing modelled measurement when tracking consent is withheld.

Contribution margin

Contribution margin is revenue minus all variable costs — cost of goods, shipping, payment fees, returns and marketing — showing what each sale actually contributes toward fixed costs and profit.

Conversion rate

Conversion rate is the percentage of visitors or sessions that complete a defined action — a purchase, form submission or booking — within a measurement period.

All 87 terms
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