MER, or Marketing Efficiency Ratio, is a metric that many advertisers and businesses use to measure success. MER can help businesses better determine how an ad spend weighs against overall revenue. 

How do I calculate Marketing Efficiency Ratio?

To determine MER, you’ll need to pull numbers for your total sales revenue for the period that you’re looking to measure, and then divide that number against your total marketing spend for the same period. 

Follow these steps:

1. Gather Data. Collect the total sales revenue generated during the specific period you wish to evaluate.
2. Determine Marketing Spend. Add up all your marketing expenses for that same period, including costs associated with various advertising platforms like social media, Google Ads, or other marketing channels.
3. Apply the Formula. Use the following formula: MER = (Total Sales Revenue / Total Marketing Spend) * 100

Let’s break this down with an example:

• Total Sales Revenue: $35,000
• Total Marketing Spend:
• Meta Advertising: $5,000
• Google Ads: $5,000
• Total Marketing Spend: $10,000

MER = ($35,000 / $10,000) * 100 = 350%

In this example, the Marketing Efficiency Ratio is 350%. This indicates that for every dollar spent on marketing, $3.50 in revenue was generated.

Converting MER to a Percentage out of 100

When working with MER, it's often helpful to express the number as a percentage out of 100, similar to ACOS (Advertising Cost of Sales).

To convert MER to a percentage out of 100, use the following formula:

MER Percentage = (Total Sales Revenue / Total Marketing Spend) * (0100) * 100

Example Conversion

Let’s use the same data from the previous example:

MER Percentage = ($35,000 / $10,000) * (0.100)*100 = 35%

Converting MER to a percentage out of 100 simplifies the interpretation, making it more intuitive for assessing marketing efficiency.

Conclusion

MER is a valuable metric that empowers businesses to make data-driven decisions, optimize marketing strategies, and maximize returns on investment. 

By understanding and utilizing MER effectively, you can make informed choices to enhance your marketing campaigns and boost revenue.