A case for MER

It’s been a hot minute since I wrote last, so I’m resurfacing with thoughts that come up often in client work.

Today’s topic: getting more out of your eCommerce marketing by rethinking how you measure performance.

If you’re a CMO or marketing lead, this one’s especially for you.

In Amazon space measure of marketing effectiveness went through the journey of ACOS to ROAS, then to TACOS. Now the majority of brands and providers are sitting on that triangle: ACOS-ROAS-TACOS. 99% of the time to make strategy and budget decisions about ecommerce marketing.  

The new metric though emerged, that is better suitable for the digital landscape today: MER (marketing efficiency ratio).

MER = Total Revenue ÷ Total Marketing Spend

Now what prompted MER become the preferred metric for many ecommerce brands?

1. Attribution is becoming less reliable to privacy changes (iOS14+), cookie deprecation, tracking opt-outs)  

2. Every platform claims credit (Meta, Google, TikTok) often double-count conversions, inflating ROAS

3. MER tells the whole story - Total Revenue ÷ Total Marketing Spend gives a clean, top-down view of performance. This view is also easier to consume for CEOs 

4. Aligns with profit margins - it is easy to model COGS and desired marketing efficiency (for example, target MER = 5.0 if spend must stay under 20%)

Let’s look at an example that mirrors a client who inspired this post. 

Ecommerce monthly revenue: $600,000

MER: $600,000 ÷ $59,500 = 10x

This is a very strong MER, but, there is a catch we are working on within Amazon PPC, with branded searches inflating ROAS. A problem many startup brands would like to have, but yet a challenge to solve for.

Now, if you are old school (aka grew up outside of ecommerce), you may be wondering: isn’t MER marketing Spend as a % of Revenue? And you are right, MER is essentially a rebranded, ecommerce-native spin of a concept that’s been around for ages in traditional business finance. 

Just like Kendrick Lamar brought flared jeans circa early 2000s back in style in 2025, a more simplified way to look at marketing efficiency is back in fashion. 

So how does MER differ from “marketing spend as % of revenue”?

MER lives on the marketing side of the CxO table. It’s growth- and ROI-focused—not just a cost control number like the finance team might use. CMOs love it because it supports long-game moves like brand awareness, which are harder to track in the short term.

It equalizes conversation when returns on something like brand awareness growth take time and can be trickier to measure. 

In the era of VC-backed startup, 100% DTC brands, and ‘let’s scale baby!’ energy MER just aligns a lot better for measuring performance. 

Let’s bring it back to Amazon though, because at this point you may be wondering: well, should I abandon ROAS and ACOS? No. 

Let’s look at some specific scenarios. 

1. Emerging 100% Amazon brand  

You are probably running Sponsored Products campaigns to drive traffic to your key listings, and maybe experimenting with Sponsored Brands to increase visibility. Your focus is on driving initial sales, launching SKUs, getting more reviews, and climbing the organic rankings.

You may not have external marketing channels yet, so all activity (ads + sales) is happening within the Amazon ecosystem.

Recommended Metrics: 

ACOS - for optimizing campaigns ROI
TACOS = to monitor if ads are lifting organic rank & total sales

ROAS - for assessment of campaign performance (mind the branded keywords) 

2. Scaling Amazon Brand, starting to Use off-Amazon marketing

You’re probably expanding beyond just Amazon Ads — maybe running influencer campaigns on Instagram or TikTok, testing Meta or Google ads, and starting to build brand awareness off-platform. You are likely to run ads to your Shopify vs. Amazon (better margins). You do probably drive some traffic directly to Amazon for key events. 

This is where attribution gets messy — influencer content may not have a CTA, and Meta or TikTok may underreport performance. Meanwhile, your Amazon ACOS is probably still high, and you are focused on bringing it down. Your TACOS are looking better, but you are in the middle of journey where Amazon ads performance fits your P&L, but you want to see better return. 

Recommended Metrics:

MER - time to start incorporate it. It captures the blended performance of your entire marketing effort — both on and off Amazon
TACOS  - important to watch whether your Amazon ads are driving organic rank and total sales, especially if you’re scaling PPC alongside external efforts

ROAS (Amazon, Meta) - use as directionally, a pulse on campaign performance

ACOS - for your PPC manager to focus on for non-branded and category searches 

3. Traditional Retail Brand  or a B2B Manufacturer Adding Amazon + DTC

You’re probably a well-established brand in retail — selling through big-box stores, distributors, or B2B — and now you're expanding into Amazon and maybe DTC as new digital sales channels. You’re already investing in traditional marketing, but you're starting to see traffic and conversions shift online.

You may have launched Amazon PPC and it looks “expensive” compared to wholesale margins — but that ad spend could be capturing demand created by your broader campaigns (think: branded search, halo lift).

Recommended Metrics

MER - gives your leadership and finance a blended view of overall marketing efficiency across channels (Amazon, DTC, influencer, retail). THis is especially helpful  and easier to understand for teams whose knowledge is rooted in off-line space

TACOS - Helps measure whether your Amazon PPC is lifting total Amazon revenue, and supports long-term investment decisions. It captures sales of customers that already know you from retail but now buy on Amazon, and new customers that found your brand on Amazon

ACOS - Still valuable to optimize Amazon campaigns at the tactical level  — especially for non-branded or category expansion efforts

ROAS - use to assess specific channels like Meta or Google if you're driving traffic to Amazon or your DTC site. Be mindful of high ROAS, examine for inflation of any branded campaigns. 

4. DTC Brand Expanding into Amazon (Shopify-first mindset)

You’re likely coming from a strong DTC background — used to tracking metrics like ROAS, CAC, and LTV from Meta, Google, and Klaviyo. You understand funnels, messaging, know your customer online. Probably have and use your email list. Now, as you expand into Amazon, you're facing a totally different ecosystem with limited customer data, unclear attribution, smaller margins, and at times operational gymnastics with FBA. 

It can be frustrating when you can’t track every click or customer journey like you could on Shopify.

Recommended Metrics

MER - the most familiar and useful metric here. It bridges your Shopify and Amazon performance and gives a blended view of efficiency across your whole marketing funnel

TACOS - key to understanding whether Amazon PPC is driving incremental growth, especially if you're syncing product launches or promos across platforms

ACOS - Still important to manage Amazon ads at the campaign level -  — particularly for growth-focused, non-branded efforts

ROAS - keep using it for Meta/Google, but adjust expectations for Amazon. If you're not using Attribution tags, Amazon ROAS will likely undervalue or misattribute impact

As an advisor focused on Amazon with a broader eCommerce lens, I always push brands to choose metrics that match their actual goals. ACOS and TACOS are great for Amazon levers. But once your marketing spreads across channels, MER becomes essential. It cuts through attribution chaos and shows whether your overall engine is working. Whether you're retail-born, DTC-first, or Amazon-native, MER helps you tie marketing spend back to real business growth.

Saludos,

Irina