How to work with the Marketing Efficiency Ratio

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You have now determined your target MER - but how do you work with it?

First, you should formulate concrete goals that include both sales and the MER. Depending on your company's structure, you can break down annual goals into quarterly or monthly targets – be sure to consider the typical cyclical fluctuations in your industry.

Such a goal formulation could look like this:

We aim to generate €20 million in sales this year. In Q1, we aim to generate €5 million at an MER of 5, in Q2 and Q3, we aim to generate €2.5 million at an MER of 5, and in Q4, we aim to generate €10 million.

Then it's about making concrete budget decisions based on your set goal. As long as slovenia phone number data you're within your MER target, you should scale your budget to avoid wasting potential—this way, you could theoretically even exceed your sales target. If you're below your target KPI, you should reduce your budget to avoid incurring too many unprofitable expenses. It's important not to overestimate natural day-to-day fluctuations.

Why you should stop relying on ROAS?
Why do we, as a performance marketing agency, actually work with MER and no longer with ROAS? Due to data protection regulations and iOS 14 , we can't rely 100% on third-party data. ROAS is calculated within the advertising platform, such as Meta. The advertising costs used are compared to the revenue generated by the respective ad or campaign. This sounds tempting at first, as it allows you to precisely evaluate which ads are selling profitably and which aren't. But there's a catch: The sales data is transferred from your shop to Meta, and this is precisely where massive data loss occurs these days.

With the MER, we therefore rely on a metric that can be calculated using backend or first-party data and is therefore 100% accurate. This enables precise measurement and control of the overall budget.