MER Calculator
Have you been looking at in-platform ROAS - and continually seeing your business revenue drop? Do you feel like it makes no sense how an 8x ROAS isn’t having a positive effect on your business? Our MER (Marketing Expense Ratio) Calculator is here to help you get a clear view of how much business revenue you should generate for every dollar you spend on advertising.
Configure:
Metric goals:
Your Gross Margin Without Ad Spend
The percentage of revenue remaining after costs.Your Ideal Net Profit After Ad Spend
Ideal net profit as a percentage of total revenue after ad spend and remaining costs. (You cannot have a higher net profit than gross margin)Results:
Break Even MER
1.00 X
MER Goal
2.00 X
Configure:
Metric goals:
Business Revenue
How much revenue your business generated over a period of time. (This should be the same time period as your marketing spend).Advertising Spend
How much you have spent on advertising over a period of time. (This should be the same time period as your business revenue).Result:
Current MER
1.00 X
What Is MER?
MER (Marketing Expense Ratio) shows how well your marketing spend is working by dividing your total revenue by your total marketing costs, unlike in-platform ROAS. But to get the most out of your ad spend, you need to optimize around your specific MER goal.
If your MER is too high: it could mean you’re not spending enough and leaving new customers on the table and you’re likely missing out on business growth.
If your MER is too low: you need to either pull back spending or get more efficient with your ad spend.
The key is to balance your ad spend with your specific MER goal to maximize growth and acquire customers as efficiently as possible without sacrificing revenue on the table. Depending on where your business is at, you may want to maximize sales velocity with minimal profit or you may want to maximize profit while balancing new customer growth.
Think of MER as a quick gut check to see if your marketing spend is on track. Whether you're a startup or an established brand, it's the best way to make sure you’re maximizing your revenue and efficiency with your advertising efforts.
Our goal is to show you what your breakeven MER target should be, along with the MER number you should target to hit your desired profit goal. This can change at any time depending on what you need to prioritize in your business or changing margins.
How To Calculate Your MER Goal:
Enter Your Gross Margin: We recommend taking your gross margin from the last fiscal year.
Enter Your Desired Profit Percentage: Enter how much of your total revenue you wish to see as net profit in the coming year. For example, if you would like to maintain 20% net profit on sales, enter that as your goal.
Want To Calculate Your MER In Real Time?
With DataPulse Free, you can easily see your MER performance using your business data from Shopify, Google Analytics 4, or other sources.
Get real-time and projected advertising performance data at your fingertips so you can optimize your spend and smash your growth targets.
Sign up for free and start tracking your MER in real-time to see how efficiently you're spending on marketing and where you can improve.
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