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MER calculator: marketing efficiency ratio and total profit

See why a falling MER can still mean rising profit, and model a scale scenario. Free, runs entirely in your browser, and your data is never uploaded to a server.

About this tool

What MER Analysis calculates

MER Analysis models what happens to blended efficiency and total profit when you scale spend. Its premise: MER almost always falls as spend grows, because organic revenue stays flat while the paid side expands, and a falling MER can coexist with rising profit. The metric that matters is total profit, not the ratio.

The formula

From four inputs (total revenue, marketing spend, gross margin, and the share of revenue that is paid): MER = total revenue divided by spend, ROAS = paid revenue divided by spend, and total profit = revenue times gross margin minus spend.

Two thresholds anchor the scenario. The ROAS needed to hold MER flat equals your current MER. The ROAS needed to break even on incremental spend equals 1 divided by gross margin; below that, every additional dollar loses money. The scaled scenario then adds spend at a chosen incremental ROAS, holds organic flat, and compares current versus scaled on MER, profit, and revenue mix, with a verdict: profit up while MER down means the added spend is worth it, both up means scale harder, profit down means stop.

Expected input

No CSV. Four numbers you already know (total monthly revenue, marketing spend, gross margin percent, paid share of revenue) plus the scaled spend to test and an incremental ROAS assumption, either your current ROAS or a custom value. Scenarios encode into the URL for sharing.

Assumptions and limits

  • Organic revenue is held flat as spend scales; only paid revenue grows.
  • Incremental spend converts at one constant ROAS, with no diminishing-returns curve. For the diminishing-returns version of this question, use the Marginal Efficiency Calculator.
  • Gross margin is constant across all revenue, and profit means gross profit minus marketing spend only.
  • Because organic is fixed, incremental MER equals incremental ROAS.
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