The Marketing Efficiency Ratio (MER) refers to the metric that evaluates how effective marketing spending is in generating revenue. Comparing the revenue generated by marketing efforts against the cost of those efforts. Doing this comparison helps businesses to assess the return on investment (ROI) of their marketing campaigns and efforts.

Formula to Calculate  Marketing Efficiency Ratio

Marketing Efficiency Ratio = (Revenue from Marketing​)( Divided By ) (Marketing Spend) 

Example 

If your marketing campaign generated $50,000 in revenue and you spent $10,000 :

Calculating MER $50,000/$10,000 = 5 

This means for every $1 spent on marketing, you earned $5 in revenue.

Benefits of Calculating Marketing Efficacy Ratio ( MER) for Marketing.

• Helps assess marketing campaign effectiveness and scalability 
• Provides a clear indicator of marketing ROI and the efficiency of the campaign. 
• Optimizing marketing budget allocation and assessing the adjustment strategies.
• Determining the revenue generated for each dollar spent.
• Facilitates budget optimization and better allocation
• Supports data-driven decision-making for future marketing strategies

By calculating the Marketing Efficiency Ratio, businesses can make informed decisions. About how to optimize marketing investments and drive better revenue outcomes.

What is a Good MER?

It depends on your industry, but generally, an MER of 4 or above is considered strong. Indicating you’re generating 4x the revenue for each dollar spent.

Can MER help with budget decisions?

Yes! A high MER suggests you have efficient marketing spend, which guides your parameters to allocate budgets and scale. A low MER might signal the need for adjusting the marketing strategy and refining it further.