What is MER?
MER is a metric used to measure the efficiency of an ecommerce company's marketing efforts. Specifically, it measures the ROI of a company's marketing campaigns by calculating the amount of revenue generated per dollar spent on marketing.
Why MER Is Important
The MER is important for several reasons. First, it provides an indication of how effectively a company is using its marketing budget. A high MER suggests that a company is effectively generating revenue from its marketing campaigns, while a low MER may indicate that there are inefficiencies in the company's marketing strategies.
In addition, the MER can be used to compare the performance of different marketing channels or campaigns or track changes in performance over time. This can help a company identify areas where it may need to make changes to improve efficiency and profitability.
How to Calculate MER
To calculate MER, you'll need to know two pieces of information: the total revenue generated and the total amount spent on paid marketing. Here's the formula to calculate MER:
MER = Revenue / Paid Marketing Spend
For example, let's say that an ecommerce company generated $500,000 in revenue from marketing campaigns over the past year and spent a total of $100,000 on marketing. To calculate the MER, divide the total revenue by the total amount spent on marketing:
MER = $500,000 / $100,000 = $5
This means that for every dollar spent on marketing, the company generated $5 in revenue. A higher MER is generally better, as it suggests that your company is more efficient at generating revenue from marketing campaigns.