What is MER (marketing efficiency ratio)

If you’re a marketer or business owner, you’re probably always looking for ways to measure the effectiveness of your marketing campaigns. One way to do this is by calculating your Marketing Efficiency Ratio (MER).

So, what exactly is MER? Simply put, it’s a metric that measures the return on investment (ROI) of your marketing efforts by taking into account all of your marketing expenses.

To calculate MER, you need to divide the revenue generated by your marketing campaigns by the total marketing expenses.

For example, let’s say you spent £10,000 on marketing and generated £100,000 in revenue. Your MER would be 10 (£100,000 / £10,000 = 10).

Now, you might be thinking, “Isn’t this just another way of calculating ROI?”

Well, not exactly. ROI only takes into account the revenue generated by your marketing efforts, whereas MER considers all of your marketing expenses, including salaries, software, and other costs associated with running your marketing campaigns.

So, why is MER important? Because it gives you a more accurate picture of how much you’re actually making from your marketing efforts.

If your MER is low, it could mean that you’re spending too much on marketing relative to the revenue generated, and you may need to reevaluate your strategy.

On the other hand, if your MER is high, it means you’re getting a good return on your investment and can potentially increase your marketing spend to generate even more revenue.

Let’s take a look at an example. Say you run an e-commerce store and spend £5,000 on Facebook ads in a month.

You generate £50,000 in revenue from those ads, but you also have other marketing expenses like email marketing software (£500), a graphic designer (£1,000), and a marketing manager salary (£4,000). Your total marketing expenses for the month are £10,500.

To calculate your MER, you would divide the £50,000 in revenue by the £10,500 in total marketing expenses. Your MER would be 4.76 (£50,000 / £10,500 = 4.76).

The higher your MER, the better, but 2 is the minimum you need to be aiming for.

In conclusion, calculating your MER is a great way to measure the effectiveness of your marketing campaigns and ensure that you’re getting a good return on your investment.

Keep track of your MER over time and use it to make informed decisions about your marketing strategy.