Marketing Efficiency Ratio Calculator

Method and assumptions

MER compares total business revenue with advertising spend. Unlike attributed ROAS, it includes organic and repeat revenue, so the two metrics should not be treated as substitutes.

Worked scenario

Enter total business revenue and total advertising spend for the same period, then add COGS, fulfillment and other variable costs. Compare MER with platform-attributed ROAS. A difference is expected because MER includes organic and repeat revenue while attributed ROAS follows platform credit rules.

How to interpret the result

MER is most useful as a business-level efficiency trend when its scope is stable. It can improve because of repeat revenue, seasonality, price changes or lower ad spend, not only better acquisition. Contribution after ads prevents a high revenue ratio from hiding deteriorating product or fulfillment cost.

Input reference

Currency

Example default: USD

Total advertising spend

Example default: 10000

Total business revenue

Example default: 50000

Total product cost

Example default: 18000

Fulfillment and shipping

Example default: 6000

Other variable costs

Example default: 3000

Common mistakes

• Changing which channels are included in spend between periods.
• Comparing gross revenue with net contribution targets.
• Attributing all MER movement to media performance.

Before using the result

1. Keep revenue and spend scope documented and stable.
2. Review new customers and contribution beside MER.
3. Explain price, seasonality and retention changes.

Questions to check before deciding