MER and POAS calculator.
Is your marketing actually making money? Enter your total revenue, marketing spend and margin to see your MER, profit on ad spend and break-even point, and how much more revenue the ad platforms claim than you really made.
MER = revenue ÷ marketing spend. POAS = gross profit ÷ marketing spend. Break-even MER = 1 ÷ (margin − other costs). Use your own revenue for the period: from your shop or accounts, not the ad platforms. Other costs might include shipping, payment fees and returns as a share of revenue.
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MER and POAS, explained.
Ad platforms each report their own ROAS, and they often claim the same sale. Two numbers cut through that:
- MER (marketing efficiency ratio) = total revenue ÷ total marketing spend. £45,000 of revenue on £10,000 of spend is an MER of 4.5. It uses your real revenue, so platforms can't inflate it.
- POAS (profit on ad spend) = gross profit ÷ marketing spend. At a 40% margin, that £45,000 is £18,000 of gross profit: a POAS of 1.8. Above 1.0, ads earn back more profit than they cost.
Your break-even MER
Break-even MER = 1 ÷ your margin after variable costs. At a 40% margin, it's 2.5: below that, marketing costs more than the gross profit it brings in. Set targets above it: how far depends on your other costs and how much a new customer is worth to you over time. Our LTV:CAC calculator helps with that.
How much are the platforms over-claiming?
Add up the revenue each ad platform reports and compare it with what you actually made. In our example, the platforms claim £60,000 against £45,000 of real revenue: 33% more than happened. That gap is why we steer on MER and profit, not platform ROAS, and why our weekly report leads with them. To find out what your ads genuinely add, try the incrementality calculator.
For the full comparison, read MER vs ROAS vs POAS; for platform-level targets, use the ROAS calculator; and see how we run eCommerce paid media to profit.
Keep calculating.
ROAS calculator
Work out your return on ad spend and your break-even ROAS from your margin, so you know if a campaign is actually profitable.
Open tool →Profit & returnsLTV:CAC ratio calculator
Compare customer lifetime value to acquisition cost and see whether your unit economics are healthy.
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For hotels, holiday lets and tour operators: compare the cost of a booking from ads with OTA commission, and find the most you can pay per click.
Open tool →MER and POAS questions.
01How do you calculate MER?
MER (marketing efficiency ratio) = total revenue ÷ total marketing spend, for the same period. If your business took £45,000 and spent £10,000 on marketing, your MER is 4.5. It uses your real revenue from your own systems, not what the ad platforms report.
02How do you calculate POAS?
POAS (profit on ad spend) = gross profit ÷ ad spend. Gross profit is revenue minus the cost of the goods sold, and ideally shipping, payment fees and returns too. At a 40% margin, £45,000 of revenue is £18,000 of gross profit; on £10,000 of spend, POAS is 1.8.
03What is a good MER?
Anything comfortably above your break-even MER, which is 1 ÷ your margin after variable costs. At a 40% margin, break-even MER is 2.5: below that, marketing costs more than the gross profit it brings in. How far above you need to be depends on your other costs and how much you value new customers.
04What does a POAS of 1 mean?
Break-even: every pound of ad spend brings back a pound of gross profit. Above 1, the ads make money before your other costs; below 1, they lose money unless the customers you win buy again later.
05Why is my MER lower than my platform ROAS?
Because each ad platform counts the sales it thinks it influenced, and several platforms often claim the same sale. Added together, platform-reported revenue is usually higher than what you actually made. MER uses your real total, so it is lower, and more honest.
06What is the difference between ROAS and POAS?
ROAS divides revenue by ad spend; POAS divides gross profit by ad spend. A 4x ROAS on a 25% margin is a POAS of 1.0, which only breaks even. POAS shows straight away whether ads make money: above 1 is profit, below 1 is a loss.
07Should MER include all marketing spend?
Ideally yes, ads, agency fees, tools and influencer costs, so it reflects what marketing really costs. Many brands track an ad-spend-only version for day-to-day decisions and a fully loaded version for planning. Be consistent about which you use.
Targets set from your margins and campaigns judged on MER and profit after ad spend. That’s how our media management works.