Everything You Need to Know About Marketing Efficiency Ratio (MER)
If you’re in e-commerce, you know how crucial it is to squeeze every penny out of your marketing budget. That’s where the Marketing Efficiency Ratio (MER) comes in. It’s not just about how much you spend, but how well you spend it. In this article, we’ll dive into what MER is, why it’s a game-changer, and how to wield it like a pro to maximize your marketing impact.
What the Heck is Marketing Efficiency Ratio (MER)?
Marketing Efficiency Ratio (MER) isn’t just another acronym to toss around. It’s your secret weapon for measuring the true effectiveness of your marketing efforts. While some confuse it with ROAS, here’s the lowdown: ROAS obsesses over revenue per ad dollar, focusing on individual campaigns. MER steps back and sizes up your entire marketing arsenal, giving you a full view of what’s working and what’s not.
Why bother with MER
- Spot the Dead Weight: Say goodbye to money-sucking campaigns. MER lets you cut loose the losers and double down on the winners.
- Uncover Hidden Gems: Identify those marketing gems that sparkle with high returns. It’s like finding gold in a sea of data.
- Call the Shots: Armed with MER insights, you can wield your marketing budget like a pro. No more blindfolded dart throws—this is strategic spending.
How to crunch the numbers
Calculating MER isn’t rocket science, but it’s where the magic happens. Gather your marketing expenses—every Euro counts:
- Total spend on all marketing activities (online, offline, and the stuff in between)
- Salaries for your marketing maestros
- Fees for those fancy marketing services
Now, tally up your revenue from these efforts. Here’s a simple formula, using a hypothetical example:
If a T-Shirt brand spent 10,000€ on marketing and raked in 25,000€ in revenue, their MER would be 0.4 (10,000€ / 25,000€).
What’s a Kickass MER?
Forget cookie-cutter benchmarks—your MER depends on your goals and business model. Generally, the lower the MER, the more bang for your buck. In e-commerce, a MER around 5.0 or higher signals you’re slaying it—your ad spend is less than 20% of total revenue.
MER vs. ROAS: The showdown
ROAS is like a sniper rifle, pinpointing revenue from specific campaigns. But MER? It’s your panoramic view of the battlefield, assessing the collective impact of your marketing efforts. Think big picture—because your business does.
The fine print: MER’s limitations
MER’s great but it’s not perfect. It won’t tell you which Instagram filter converts best or which Facebook ad headline slays. It’s more about seeing the forest than the trees. Use it wisely—like a general surveying the battlefield, not counting individual bullets.
Getting Down to Business: Using MER Like a Boss
Ready to roll up your sleeves and crunch some MER numbers? Use tools like Funnel to corral data from all your ad platforms and revenue streams. It’s like having a supercomputer crunch numbers while you sip your coffee.
MER: Your New Marketing BFF
The Marketing Efficiency Ratio isn’t just a metric—it’s your compass in the digital marketing wilderness. Embrace it, wield it, and watch your ROI soar. Ready to unleash MER’s power in your marketing arsenal?
Let Genero show you how to conquer the digital marketing realm with MER! Want to boost your ROI and dominate your niche? Contact Genero today. Let’s turn your marketing strategy into a force to be reckoned with.