Short answer
ROAS = revenue an ad platform attributes to its ads ÷ ad spend on that platform
MER = total store revenue ÷ total marketing spendROAS (return on ad spend) is each ad platform grading its own homework. MER (marketing efficiency ratio, also called blended ROAS) ignores who gets credit and asks one question: for every marketing dollar, how much revenue came in?
You need both. ROAS helps compare ads inside a platform. MER tells you whether the whole thing works.
Why it matters
Every ad platform uses its own rules to decide which sales it caused (see attribution). When a customer sees a Meta ad, clicks a Google ad, then buys, both platforms can claim the sale.
So if you add up the ROAS reported by each platform, you often get more revenue than your store actually made. That's not a bug in your spreadsheet. It's two platforms each taking full credit for the same order.
MER can't double-count, because it starts from your real revenue.
Example
Illustrative numbers. One month at a store:
| Source | Spend | Revenue the platform claims | ROAS |
|---|---|---|---|
| Meta | $10,000 | $40,000 | 4.0 |
| $5,000 | $25,000 | 5.0 | |
| Platforms combined | $15,000 | $65,000 | 4.3 |
Actual store revenue that month (from Shopify): $50,000, including returning customers and people who never clicked an ad.
MER = $50,000 ÷ $15,000 = 3.3The platforms claim $65,000 between them. The store made $50,000. Somewhere, $15,000 of revenue is being counted twice, and the ads look a lot better in their own dashboards than in the bank account.
How to use them together
- Watch MER weekly as the business-level health check. If it drops while platform ROAS stays flat, the platforms are over-claiming.
- Use ROAS to compare campaigns and creatives within one platform, where the rules are at least consistent.
- Set a break-even MER from your margins. With a 50% gross margin, MER below 2 means marketing costs more than the profit it brings in (before repeat purchases).
Often confused with
- ROI (return on investment): profit, not revenue. ROAS of 4 can still lose money if margins are thin.
- POAS (profit on ad spend): ROAS using gross profit instead of revenue. More honest, harder to set up.
- CAC: cost to get one new customer. MER includes revenue from returning customers. See CAC.