The calculation is simple. Total revenue divided by total ad spend. Similar to ROAS, MER is expressed as a ratio. $15k in revenue on $5k in spend equals an MER of 3.0.
Calculating MER
As an example, say your last marketing campaign generated $10,000 in revenue from a $5,000 ad spend: You divide $10k by $5k (total revenue by total ad spend) That gives you an MER of 2 (10,000/5,000 = 2) We can express this total as a ratio, meaning MER in this example is 2.0.
In this case, the MER is 5. The company generated $5 in revenue for every $1 spent on marketing. Generally speaking, a marketing efficiency ratio of 5 or above is considered “good.”
mer = Total sales revenue (over Specific time) / Total MARKETING spend (over the same period, across all channels)
How do MERs work? The MER is expressed as an annualized percentage of daily average net asset value during the period. For example if a fund's MER is 0.78%, this means the fund incurs annual costs of $78 for every $10,000 invested in a given year.
Anything above 1.5% is considered high.
First thing's first: there is no such thing as a universally “good” MER. Although it's common to see a 3x MER referenced as “good” (likely a carryover of the 3x benchmark for LTV to CAC Ratio), a good MER is entirely dependent on your business size, what you're selling, your strategy, and your profitability goals.
Generally, a good debt ratio for a business is around 1 to 1.5. However, the debt-to-equity ratio can vary significantly based on the business's growth stage and industry sector. For example, newer and expanding companies often utilise debt to drive growth.
The management expense ratio (MER) – also referred to simply as the expense ratio – is the fee that must be paid by shareholders of a mutual fund or exchange-traded fund (ETF).
Marketing Efficiency Ratio (MER) evaluates overall marketing performance. Calculate MER by dividing total revenue by total ad spend. For instance, if your campaign generates $20,000 from a $10,000 ad spend, the MER is 2.0.
Key Differences: While MER offers a broad perspective on marketing effectiveness, ROAS provides a more granular analysis of individual campaign performance. MER supports long-term planning and strategic adjustments, whereas ROAS aids in refining specific campaigns.
They are not the same thing. Adding to the confusion is the fact that MER is often called signal-to-noise ratio, or SNR. A good example is a cable modem termination system's (CMTS's) reported upstream SNR. That parameter is MER, not CNR.
MER is digital complex baseband signal-to-noise ratio (SNR) and is the ratio, in decibels, of average symbol power to average error power. MER is, in effect, a measure of the “fuzziness” or spreading of a constellation's clouds of plotted symbol points.
Marketing Efficiency Ratio (MER) is calculated by taking total revenue derived from marketing, and dividing it by your total marketing spend over any given time frame. It is the same thing as eROAS in the 3 ROAS to Rule Them All.
In conclusion, the fees you pay for investment products and services will have a significant impact on whether you are successful in achieving your investment goals over the long term. Aim for a “good MER” of 0.25% to 0.75% by investing in ETFs and using a private investment management firm to manage your portfolio.
Quick Guide: Understanding E-commerce MER KPI
MER: Marketing Efficiency Ratio. Formula: Total Revenue / Total Marketing Spend. Good MER: 5.0 or above, indicating ad spend is 20% or less of total revenue. Purpose: Measures overall performance of digital marketing efforts across all channels.
Equity Mutual Funds: Typically, an exit load of 1% is charged if units are redeemed within 12 months of investment. Long-term holdings usually incur no charges.
Understanding Management Fees
Management fees can also cover expenses involved with managing a portfolio, such as fund operations and administrative costs. The management fee varies but usually ranges anywhere from 0.20% to 2.00%, depending on factors such as management style and size of the investment.
Expense ratios of above 1.5% are very high and can quickly eat into your returns. Most actively managed mutual funds have expense ratios ranging from 0.5% to 1.5%, whereas most passively managed funds are in the range of 0.2% to 0.5%.
Bottom Line. A 1% annual fee on a multi-million-dollar investment portfolio is roughly typical of the fees charged by many financial advisors. But that's not inherently a good or bad thing, but rather should hold weight in your decision about whether to use an advisor's services.
A. Mutual fund fees in India range from 0.5-2.5% of AUM, including administrative, management, and distribution expenses.
Typically, any expense ratio higher than 1 percent is high and should be avoided. Over an investing career, a low expense ratio could easily save you tens of thousands of dollars, if not more. And that's real money for you and your retirement.