MER vs. ROAS: which metric should you use to scale?

ROAS (Return On Ad Spend) measures the performance of a specific advertising channel. MER (Marketing Efficiency Ratio) measures the overall efficiency of all your marketing.

ROAS formula: Revenue attributed to channel ÷ Channel spend. Example: $20,000 attributed to Meta ÷ $5,000 spent = 4x ROAS.

MER formula: Total revenue ÷ Total marketing spend. Example: $50,000 total revenue ÷ $12,000 spent (all channels) = 4.17x MER.

Per-channel ROAS suffers from attribution problems. Each platform (Meta, Google, TikTok) claims conversions according to its own rules, creating double attribution. You can have a 5x ROAS on Meta AND a 4x ROAS on Google for the same conversions.

MER eliminates this problem by looking at the big picture: how much you spent total, how much you generated total. No double counting, no attribution bias. It's the most honest view of your marketing efficiency.

Use per-channel ROAS for tactical decisions: which campaign performs better? Which ad set to scale or cut? ROAS remains useful for comparing relative performance within the same platform.

Use MER for strategic decisions: is my marketing profitable overall? Can I increase my total budget? Is my business scaling profitably?

Combining both gives you a complete picture: MER for the big-picture direction, ROAS for daily execution.

Your target MER depends on your margin. If your margin before ads is 40%, your breakeven MER is 1 ÷ 0.40 = 2.5x. Below that, you lose money. Above that, you're profitable.

For a comfortable margin, aim for an MER 30-50% above your breakeven. With a breakeven MER of 2.5x, target 3.25x to 3.75x.

Track your MER week over week to detect trends. An MER that consistently drops is a red flag: either your costs are increasing, or your marketing is losing efficiency.