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Glossary

MER and ROAS

ROAS (return on ad spend) is the revenue an ad platform attributes to its own ads divided by what you spent there; MER (marketing efficiency ratio) is your total revenue divided by your total marketing spend.

Why it matters

Each platform counts conversions its own way, and they overlap. Meta, Google and TikTok can each claim the same sale. Add up their ROAS figures and you can "earn" more than you made.

MER sidesteps that. It doesn't care which ad got the credit; it asks whether spend and revenue move together.

Use both:

  • ROAS to compare ads and campaigns inside one platform.
  • MER to decide total budget and to check the platforms' claims against your real revenue.

Example: $40,000 revenue in a month on $10,000 total marketing spend is a MER of 4.0, whatever each platform reports.

How Cosmo handles it

Cosmo reads revenue from Stripe or Shopify and spend from your connected ad accounts, and shows both numbers in the Monday report. If platform ROAS is rising while MER is flat, he says so, because it usually means the platforms are claiming sales that would have happened anyway.

Related terms

CACAdvantage+Performance MaxAd creative fatigueAll terms
FAQ

MER and ROAS, answered

What's a good MER?

It depends on your margins. A business with 70% gross margins can grow profitably at a lower MER than one with 30% margins. Work out the MER at which you break even first.

Is ROAS useless?

No. It's the right tool for comparing ads within one platform. It's the wrong tool for deciding total budget.

Related

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