MER vs ROAS, and which one to report to clients.

Three names, two ideas.

• ROAS

  Return on ad spend. The revenue a platform attributes to its own ads, divided by what the client spent on that platform. Measured by the platform, under its own rules.

• MER

  Marketing efficiency ratio. Total revenue divided by total marketing spend, across every channel at once. Measured from the client's own systems.

• Blended ROAS

  Often used to mean the same thing as MER. Some teams count paid media spend only, so define it before you report it.

Each platform credits itself with any conversion its ads touched within its own attribution window. A customer who saw an ad on one platform and clicked one on another is claimed by both. Add up the revenue every platform attributes to itself and the total is often larger than the revenue the client actually took.

MER cannot do this. It has one revenue figure, from the client's store or billing system, and it divides by everything they spent. Nothing is claimed twice, because nothing is attributed at all.

MER is the honest view of the whole. It survives tracking loss, consent changes and changes to attribution windows, because none of them touch the client's own revenue figure. It is the right number for setting the size of the total budget and for telling whether marketing overall is getting more or less efficient.

It is also blind. It cannot say which channel earned the money, and it moves with things that are not marketing at all: a price change, a season, a launch, word of mouth. Platform ROAS is the number for decisions inside a channel, such as which campaign or creative to fund, where the platform's own view is the best one available.

The useful client report puts MER at the top as the measure of the whole, and platform ROAS underneath as the measure of each part, labelled as each platform's own view. Readers then stop adding the parts up and expecting them to match the whole, which is the argument most of these reports end in.

Where the two disagree about whether a channel is working, an incrementality test is how you find out which one is right.

MER is total revenue for a period divided by total marketing spend for the same period. The arithmetic is trivial. The decisions inside it are not.

• Which revenue

  Gross or net of refunds, with or without tax and shipping. Pick one, take it from the client's own system of record, and keep it.

• Which spend

  Every channel, including the ones with no reporting API, such as sponsorships or offline media. Decide whether agency fees and tools are in, and write the decision down.

• The same days

  Revenue and spend on the same day boundaries in the same timezone, or the ratio drifts at every month end.

• One currency

  If spend and revenue arrive in different currencies, convert at a stated rate and keep the rate with the figure.

MER needs spend from every ad platform and revenue from the client's store or billing system in one table, in one currency, on the same day boundaries. That is the modelled layer SightShark builds for every client in your own data warehouse from 200+ sources, with manual uploads covering the spend that has no API. Platform ROAS stays available beside it, labelled as each platform's own view.