Free tool
MER calculator.
MER is total revenue divided by total ad spend across every channel. Use it when you want one blended number that reflects how marketing contributes to the business.
Calculator
Marketing efficiency ratio
Results
- MER
- 4.00x
- Contribution margin
- $25,000
- Break-even MER
- 2.00x
How to use this
Pull a full month (or rolling 30 days) of shop-wide revenue and sum all paid marketing spend across Meta, Google, TikTok, affiliate, and influencer. Enter your average product margin as a percentage. The output shows how many dollars of revenue each dollar of ad spend produced across the business, not just the attributed window.
Track MER week over week. The direction matters more than any single snapshot, especially if you have long lag between first touch and purchase.
How we calculate
MER equals total revenue divided by total ad spend. Contribution margin equals revenue multiplied by product margin, minus ad spend, which is the dollars left after cost of goods and marketing. Break-even MER equals one divided by product margin.
We show contribution margin separately because a channel-level ROAS number can look healthy while blended marketing still loses money once you factor organic-driven revenue out of the denominator.
Limitations
MER includes organic and returning-customer revenue in the numerator. A strong email or SMS program will inflate MER even when paid acquisition performance is flat. Segment new-customer MER (nCAC) separately when you can.
Contribution margin here excludes fixed costs, shipping subsidy, returns, and processing fees. Treat it as a ceiling on operating profit, not the line itself.
Keep going
- ROAS calculator for channel-level ad efficiency.
- Paid ads service to manage the spend side.
- Email marketing to grow the organic revenue side.