Vocab for Marketers: What is MER?

what is MER?

Definition 

Marketing efficiency ratio (MER) is a financial metric used to measure the success of marketing campaigns; it compares marketing expenses to generated revenue. MER is calculated using the following formula:

how to calculate marketing efficiency ratio: total sales revenue (over a time period) divided by total marketing spend (over the same period, all channels.

How eCommerce Marketers Use MER

Marketers use MER to gain campaign performance insights by examining ad spend across the entire sales funnel, tapping into this metric’s simplicity to offer a valuable perspective on the efficiency of all marketing spend.

With omnichannel advertising in particular, there is a lot of gray area when it comes to attributing revenue to ad spend. This is especially true as you expand to upper-funnel channels like connected TV (CTV) or display. Would a $20 million investment into CTV impact revenue? Absolutely. Would Google Analytics give credit to it? No chance. Conversions from CTV would show up as organic or paid search traffic, and it’s where MER helps bridge this gap.

For a deeper understanding of MER and how it can be utilized to measure the success of your omnichannel campaigns, reach out to our team today.

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