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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 Profit Margin: We recommend taking your gross profit margin from the last fiscal year.

• Enter Your Desired Profit Percentage: Enter how much of your total revenue you wish to see as profit in the coming year. For example, if you would like to maintain 20% 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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