Overview

Marketing Efficiency Ratio (MER) evaluates the total advertising spend as a proportion of the revenue generated from all orders.

📘

MER = Blended Ad Spend ÷ Order Revenue

The calculation is based on data in the Blended Stats table.

🚧

Note

For the inverse ratio (Order Revenue ÷ Blended Ad Spend), use Blended ROAS.

Detailed Breakdown

The formula above is derived from the following components:

• Blended Ad Spend = spend + custom_ad_spend

  • spend = SUM(spend) --> Ads table
  • custom_ad_spend = SUM(IF(is_ad_spend, amount, 0)) --> Custom Spend table

• Order Revenue = SUM(order_revenue) --> Orders table.

  • order_revenue is the total revenue after adjustments such as discounts, shipping, fees, and taxes.

Insights and Actions

Marketing Efficiency Ratio (MER) reveals how much revenue you generate for every dollar of total ad spend, giving a high-level view of overall marketing performance:

• Benchmark Profitability: Track MER over time—an increasing ratio means your revenue is growing faster than ad costs, while a downward trend flags rising spend or slowing sales.
• Guide Budget Allocation: Compare MER across time periods (e.g., campaigns, seasons) to decide when to scale spending or tighten budgets for better efficiency.
• Balance Channel Mix: If MER declines, dive into channel-level ROAS and CPA to pinpoint underperforming channels, reallocating budget to higher-return sources.

Related Metrics

• Blended ROAS: Shows revenue per ad dollar at the channel mix level, complementing MER for a more granular efficiency check.
• Blended Ad Spend: Provides the cost side of the MER equation, helping you detect sudden spend spikes that could drag efficiency down.
• Order Revenue: Represents total sales driven by all orders; monitoring revenue alongside MER confirms whether changes stem from spend, sales, or both.

Example Use

Prompt

What's my MER for the last 7 days?

Response

Query

SELECT
  COALESCE(
    SUM(bst.spend) / NULLIF(SUM(bst.order_revenue), 0),
    0
  ) AS mer
FROM
  blended_stats_tvf () bst
WHERE
  bst.event_date BETWEEN CURRENT_DATE() - 7 AND CURRENT_DATE()  - 1;