ROAS 5 on Meta, ROAS 4 on Google, losing money anyway
A Kochi fashion brand saw ROAS 5 in Meta and 4 in Google, so it kept raising budgets. The bank balance went the other way.
Adding platform revenue gave ₹11 lakh, but Shopify showed ₹9 lakh. Both platforms claimed the same buyers. Real MER was 4.5, against a break-even MER of about 3 at their 40% margin, but returns and discounts pushed real profit close to zero.
They now track MER and POAS weekly, and only scale when both stay above target.
Illustrative example based on a common pattern in Kerala e-commerce accounts. Numbers rounded.
What MER is
MER uses numbers you control: revenue from your store or CRM and total spend from invoices. It includes the effect of ads on direct, organic and word-of-mouth sales.
Break-even MER works like break-even ROAS: 1.18 ÷ gross margin when ad spend attracts 18% GST you can’t claim back.
MER = total revenue ÷ total ad spend · POAS = gross profit ÷ ad spend
Calculate your MER and break-even MER
- MER
- 4.50x
- Break-even MER (with GST)
- 2.95x
- Platforms over-claim by
- 22%
Ads are paying for themselves across the business: every ₹1 of ad spend comes with ₹4.50 of total revenue, and you need ₹2.95 to break even at a 40% margin. The platforms together claim more revenue than you made, so don’t add their numbers up; judge growth on MER.
Want a second opinion on your numbers? Join the community and post them for doubt-clearing.
MER vs ROAS vs POAS
| Metric | Answers |
|---|---|
| Platform ROAS | Which campaigns work best inside one platform? |
| MER (blended ROAS) | Is total ad spend growing the business? |
| POAS | Is ad spend creating profit, not just revenue? |
How experienced marketers use MER (blended ROAS)
1. Set monthly budgets
Scale total spend while MER stays above your target.
2. Settle attribution fights
MER doesn’t care which platform takes credit.
3. Report to owners
Founders understand “₹4.5 back for every ₹1 spent” across the business.
What good looks like
| Business type | Starting rule | Why |
|---|---|---|
| Break-even MER at 40% margin | ≈ 2.95 | 1.18 ÷ 0.40. |
| Break-even MER at 60% margin | ≈ 1.97 | 1.18 ÷ 0.60. |
| Healthy target | 1.3–1.5× break-even | Starting rule to leave room for other costs. |
When the number lies
- Seasonality and organic spikes
- A festival or viral post lifts MER without ads doing more. Compare like-for-like periods.
- Revenue isn’t profit
- Discounts, returns and delivery costs can turn a good MER into a loss; check POAS.
Mistakes to avoid
Adding platform ROAS together
Double-counted revenue and over-spending.
Using revenue before returns
MER looks better than reality.
Forgetting GST on ad spend
Break-even is higher than you think.
Related terms
Questions people ask about MER
What is MER in marketing?
Marketing efficiency ratio: total revenue ÷ total ad spend across all channels. Also called blended ROAS.
Is MER better than ROAS?
They answer different questions. MER judges the whole business; ROAS compares campaigns within a platform. Use both.
What is POAS?
Profit on ad spend: gross profit ÷ ad spend. It shows whether ads create profit, not just revenue.
What is a good MER?
Above your break-even MER (1.18 ÷ gross margin with GST), ideally with room for overheads.
Put it into practice
- SOP 036: Calculate a Meta Ads Budget from a Revenue Goal →
- SOP 307: Create a Monthly Google Ads Report Clients Actually Read →
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