What is MER (marketing efficiency ratio)?
MER, or marketing efficiency ratio, is total revenue divided by total marketing spend. An MER of 3.0 means every dollar of marketing produced three dollars of revenue. It is a store-wide measure. A single creator deal is better judged on profit, which is why Acurrate shows POAS for each creator.
By Nick Jaffrey, founder · Last updated
The formula
MER = total revenue ÷ total marketing spend
Count every marketing cost in the spend: ads, creator fees, gifted product, agency fees, tools. A store that spent $20,000 on marketing in a month and took $70,000 in revenue has an MER of 3.5.
What counts as a good MER?
There is no universal number, because the same MER means very different things at different margins. Your break-even MER is 1 divided by your gross margin:
Above your break-even MER, marketing earns more gross profit than it costs; below it, it does not, however strong the revenue looks.
MER, ROAS and POAS
Why a creator deal is judged on POAS
MER answers a store-wide question: how hard is all my marketing working? A creator deal asks a narrower one: will this fee make me money? Revenue cannot answer that, because two deals with the same revenue can leave very different profit once product and shipping are paid. So for each creator Acurrate shows POAS: the profit the deal leaves after product, shipping and discount costs, before the fee, divided by the fee. 1.0× is break-even.
A worked example
A creator is forecast to drive 40 orders. Your average order is $45, and their 15% discount code brings it to $38.25, so revenue is $1,530. Product costs $12 an order and shipping $6, so those 40 orders cost $720 to fulfil. The deal leaves $810 before the creator's fee. At a $500 fee its POAS is 1.62×. The most you could pay before losing money is $810, which is what Acurrate shows as Safe to pay. These are illustrative numbers.
In Acurrate, the forecast starts from real reach, the median views of a creator's recent posts, because every number after it inherits that input. The full method is on our methodology page, and the step-by-step ROI guide walks through it for one creator.
Common questions
What is MER in marketing?
MER, or marketing efficiency ratio, is total revenue divided by total marketing spend. Where ROAS measures revenue against the spend on one channel or ad, MER measures it against everything you spent on marketing. An MER of 3.0 means every $1 of marketing produced $3 of revenue.
What is a good MER?
It depends on your margin. Divide 1 by your gross margin to get the MER at which marketing pays for itself: a store with a 60% gross margin breaks even at an MER of about 1.67, one with a 40% margin needs 2.5. Anything above your break-even MER is marketing that earns more than it costs, before overheads.
What is the difference between MER, ROAS and POAS?
ROAS is revenue divided by the spend on one campaign or channel. MER is revenue divided by all marketing spend. POAS is profit divided by spend: what is left after product and shipping costs, so a low-margin campaign cannot look good on revenue alone. ROAS and MER are revenue ratios; POAS is the profit ratio.
Is MER based on revenue or profit?
Revenue. MER is total revenue divided by total marketing spend. If you want profit per dollar of spend, use POAS, which divides the profit left after product and shipping costs by the spend.
How should I judge a creator deal before signing it?
On profit, not revenue. Forecast the orders the creator is likely to drive from the views their recent posts actually get, then work out the profit those orders leave after product, shipping and the creator’s discount code. That profit divided by the fee is the deal’s POAS, where 1.0 is break-even, and the profit itself is the most you can pay before the deal loses money.
Get a creator's break-even fee before you negotiate
The free ROI calculator forecasts revenue and the break-even fee for any creator, plus profit and ROAS at their asking price, from their real reach and your store's numbers — the same engine that powers Acurrate's product forecasts.