What is mer?

How do you calculate the marketing efficiency ratio?

Calculate MER by dividing total revenue by total marketing spend for one clearly defined period. HubSpot's explanation uses that formula and distinguishes the combined business measure from campaign-level advertising returns.

Consider a fictional skincare shop with $60,000 in monthly revenue. It spends $12,000 on ads and $3,000 on other marketing work. If those are the complete marketing costs for the period, MER is $60,000 ÷ $15,000 = 4. The business records four dollars of revenue for each dollar of marketing cost included.

Input or result	Worked example	Definition to preserve
Revenue	$60,000	The chosen sales measure for the month
Advertising	$12,000	All included ad accounts for that month
Other marketing	$3,000	Included creative, agency or other marketing costs
Total marketing spend	$15,000	Advertising plus the other included costs
MER	4	Revenue divided by total marketing spend
Revenue-to-ad-spend ratio	5	Revenue divided by ads only

The last two rows answer different questions. Both calculations can be useful, but calling both "MER" without explaining the costs creates a misleading comparison. These figures are illustrative, not a benchmark for skincare businesses.

How is MER different from ROAS?

MER uses the business's combined revenue and marketing cost, while ROAS compares attributed conversion value with advertising spend. The difference is the scope and attribution of the numerator as well as which costs enter the denominator.

Google Ads documents ROAS using conversion value per cost and describes target ROAS as a bidding objective. That is an advertising-system calculation with configured conversion values. It is not a statement of the shop's final accounting profit.

Suppose an ad platform attributes $24,000 of conversion value to $6,000 of spend. Its reported ROAS is 4. A second platform may claim some of the same orders under its own attribution rules. Adding the reported conversion values together can count a purchase twice; taking the store's total revenue once avoids that particular duplication.

MER still does not prove what caused the revenue. Repeat customers, word of mouth, earlier campaigns, a product launch or a temporary promotion may affect the total. A ratio that avoids channel attribution is useful for a different question, not a replacement for every channel report.

Which revenue and spending figures should you use?

Use consistent revenue and spending definitions, record them with the ratio, and match their dates, currencies and business scope. A precise formula applied to inconsistent inputs produces a precise-looking but unreliable result.

Shopify's reporting documentation separates gross sales, discounts, sales reversals, net sales, shipping and taxes. "Sales" is therefore not enough description for a numerator. State which measure you select and apply the same rule in both periods.

A useful reporting note records:

1. The start and end dates, with the reporting time zone.
2. Whether revenue includes taxes, shipping, discounts and returns.
3. Which stores and marketplaces are included.
4. Which ad accounts and non-advertising costs are included.
5. The currency and any conversion convention.
6. When the source data was last refreshed.

For the skincare shop, comparing this month's net sales with last month's sales before returns would distort the trend. Comparing revenue from one store with marketing costs for two stores would do the same. Keep the underlying totals visible so someone can inspect the ratio rather than trusting its label.

What is a good MER?

A good MER depends on the business's margins, other costs and goals; there is no universal healthy threshold. Higher revenue per marketing dollar can help, but it does not establish whether the business makes money or invests enough in growth.

Use a simplified example to understand the limit. Suppose the shop retains 40% of revenue after product and fulfillment costs, before marketing and fixed overhead. At an MER of 4, marketing consumes 25% of revenue. That leaves 15% before the excluded overhead. If the same shop retains only 20% before marketing, the same MER leaves a shortfall at that level.

The arithmetic illustrates why another business's target is unsafe to copy. It is not a complete profit model: cost definitions, timing and fixed expenses still need attention. Treat an MER target as one part of a budget supported by the business's own numbers.

Why can MER improve while the business gets worse?

MER can improve when marketing spending falls faster than revenue, even if sales or future demand weaken. A higher ratio deserves investigation rather than automatic approval.

If the shop cuts marketing spend from $15,000 to $8,000 while revenue falls from $60,000 to $40,000, MER rises from 4 to 5. Revenue is lower, and the cash available after other costs may also be lower. Whether the change is desirable depends on the purpose of the spending and the rest of the business.

Short periods can also mislead. A campaign may incur costs before orders arrive, while a holiday week may benefit from earlier work. Review the ratio alongside its revenue and spend totals over comparable periods, plus the operational evidence needed to understand the change.

How does Mojobase help you examine MER?

Mojobase Numbers reads Shopify, Amazon and ad platforms, bringing store sales and advertising spend into the business's context. Ask, "How did sales and ad spend change this week compared with last week?" and inspect the period and sources behind the answer.

Connected ad spend does not include every marketing expense. Agency fees, creative costs or other omitted categories must be accounted for separately before describing a result as total-marketing MER. Numbers does not provide bookkeeping, expenses or bank balances. The Shopify connection, Shopify MCP page and daily sales-and-spend workflow explain the available inputs.