MER vs ROAS: what is the difference, and which metric really counts?
ROAS measures per channel (and is often counted twice). MER measures the overall efficiency of all ad spend. For real profitability, MER is the more honest number.
In short: ROAS (return on ad spend) measures the revenue attributed to a campaign or platform per ad euro. MER (marketing efficiency ratio) measures net revenue (excluding VAT, after refunds) divided by total marketing costs, across all channels. The two metrics answer different questions and replace no complete profit calculation.
Definitions
- ROAS = revenue of a channel / ad spend of that channel (e.g. Meta ROAS = 3.5)
- MER = net revenue / total marketing costs (ad spend of all channels plus agency and marketing fixed costs)
- Blended ROAS = net revenue / total ad spend; it is MER without fixed costs
- Break-even ROAS = net revenue / contribution margin before advertising (= 1 / contribution margin rate)
Why ROAS alone misleads
Depending on the attribution window, the same conversion can be credited to several platforms. That is why platform ROAS values cannot simply be added up. MER works with the net revenue of the whole shop and all marketing costs, but on its own it says nothing about COGS, fees, shipping or returns either. Only the comparison with the break-even ROAS shows whether advertising pays off.
Which metric when?
- ROAS: for optimising INDIVIDUAL campaigns/creatives (relative, within one channel).
- MER: for steering the OVERALL marketing efficiency and for profit decisions.
- In practice: MER for the overall view, ROAS for relative comparisons within clearly defined attribution rules.
MER tells you the efficiency, the contribution margin tells you whether profit is left at the end. Only both together give an honest picture.