MER vs ROAS: How to Create an MER Target That Actually Means Something
Delivered ROAS is decided by the auction, not by you. Breakeven MER can be derived: 1 divided by contribution margin. Here is the full loop I run against it.
A lot of advice on ROAS targets starts from the question "what should I set my target to?" That framing assumes the number is yours to choose. For the most part, it isn't. The ROAS a campaign can deliver is decided inside the auction, by competition, ad quality, offer strength, and how much volume you're pushing. You discover it by running, more than you decide it in advance.
What you can decide, and derive line by line from your financials, is the number the business needs the whole system to hit. That number is your MER target. This walkthrough covers what MER is, how to calculate your breakeven, how to set the target, and how to use platform ROAS controls, within what the auction gives you, to steer toward it.
MER (marketing efficiency ratio) is total revenue divided by total advertising spend, measured across all channels at the business level.
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