MER over ROAS: the number we actually manage to

Ask three ad platforms how many sales they drove last month and add up the answers. For most brands running on more than one channel, the total comes out higher than the number of orders in the store. Each platform sees its own touchpoints, applies its own attribution window and, understandably, gives itself the benefit of the doubt.

That’s why we don’t run brands on platform ROAS alone. We manage to MER, and we use everything else as supporting evidence.

What MER is

MER, or marketing efficiency ratio, is the simplest number in eCommerce:

MER = total revenue ÷ total marketing spend

No attribution model, no tracking pixels, no arguments about who touched the customer last. If a brand spends 20,000 on marketing in a month and takes 80,000 in revenue, its MER is 4. That’s an illustrative example, not a target. The right number depends entirely on margins.

Because MER comes straight from the bank account and the store, it can’t be inflated by overlapping attribution. When it rises, the business is getting more efficient. When it falls, something got worse, even if every dashboard says otherwise.

Why ROAS still has a place

Platform ROAS isn’t useless. It’s just answering a narrower question: which campaigns and ads, inside this platform, seem to be working best relative to each other? That makes it a good tool for direction. Shift budget toward the ad sets and creative that platform data favours, and pause what clearly isn’t working.

What it’s bad at is deciding totals: how much to spend overall, whether a channel is worth funding at all, or whether growth is actually profitable. For those decisions we look at blended numbers.

The numbers we watch together

MER on its own can hide problems, so we pair it with a few others.

• New-customer MER. Revenue from first-time customers divided by marketing spend. Total MER can look healthy simply because repeat customers keep buying. This tells you whether marketing is actually acquiring anyone.
• Contribution margin. Revenue minus product costs, shipping, fees and marketing. MER says nothing about whether the revenue is profitable. Contribution margin does.
• Cost per new customer, against first-order value and expected lifetime value. This shows how long it takes for a customer to pay back what it cost to win them.

Together these tell us whether to push spend, hold, or pull back.

Testing what actually works

Blended metrics tell you how the whole system is doing. They can’t tell you what any one channel adds. For that, the honest answer is to test.

• Holdouts. Turn a channel or campaign off for a period, or for a share of the audience, and see what happens to total sales.
• Geo tests. Run spend in some regions and not in comparable ones, then compare.
• Platform lift studies. Where they’re available and the budget allows, these are a cleaner read than in-platform attribution.

None of these is perfect, but each answers the question that matters: what would have happened if we hadn’t spent this money?

How this changes day-to-day decisions

Running on MER changes behaviour in useful ways. Teams stop fighting over credit and start asking whether the whole engine is improving. Spend decisions get tied to margin rather than to a platform’s own scoreboard. Channels that build demand but rarely get last-click credit, like video and creator content, get judged on what they contribute to the total.

It also keeps everyone honest when results look too good. If a platform reports a sudden jump in performance and MER doesn’t move, the business didn’t actually get better. The reporting did.

The short version

Use platform ROAS to steer inside each channel. Use MER, new-customer efficiency and contribution margin to decide how much to spend in total. Use tests to settle arguments. The goal isn’t perfect attribution, which doesn’t exist. It’s making good decisions with numbers you can trust.