Marketing Efficiency Ratio (MER)
MER answers: For every dollar spent on marketing (ads, influencers, affiliates), how many revenue dollars did the business generate? It is simple and channel-agnostic — but revenue-blind to COGS.
When MER rises but Profit on Ad Spend falls
Organic or email may lift MER while paid social scales low-margin SKUs. Profit on Ad Spend isolates paid channels and profit so you do not over-credit ads for business-wide revenue.
MER vs Profit on Ad Spend at a glance
| Metric | MER | Profit on Ad Spend |
|---|---|---|
| Numerator | Total revenue | Gross profit (ad-attributed) |
| Denominator | Total marketing spend | Ad spend (per platform/campaign) |
| Includes COGS? | No | Yes |
| Best for | Executive overview | Bid & budget optimization |
Frequently asked questions
Common questions about this topic — tap to read answers.
Should I drop MER?
No — report MER for holistic view. Optimize paid media with Profit on Ad Spend.
Amazon ACOS vs Profit on Ad Spend?
ACOS is ad spend ÷ ad revenue (like inverse Return on Ad Spend). Profit on Ad Spend still wins for seller margin decisions.
