Break-even MER
1.67x
Above break-even. Equals 1 ÷ gross margin: the MER where gross profit just covers marketing spend.
Free marketing budget tool
Free Marketing Efficiency Ratio Calculator
Marketing efficiency ratio (MER) is total revenue divided by total marketing spend for the same period. It is a blended measure of how much revenue the business generates per dollar of marketing, across every channel.
Enter revenue, spend, and gross margin to see your current MER, break-even MER, contribution after marketing spend, the revenue needed for a target MER, and a side-by-side budget scenario.
No signupPrivate in your browserBreak-even MERScenario comparison
Current period
Enter revenue, spend, and margin
Comparison scenario
Model a different budget, such as next month's plan, using the same gross margin.
Live result
5.00x blended MER
Current MER5.00x
Scenario MER4.43x
Target MER4.00x
Break-even MER1.67x
Contribution after marketing
$100,000
Gross profit of $150,000 minus marketing spend. 40% of revenue, before fixed costs.
Revenue needed for target
$200,000
Current revenue already meets 4.00x at this spend.
Marketing spend ratio
20%
Spend as a share of revenue. Max spend at target MER on current revenue: $62,500.
Scenario comparison
| Metric | Current | Scenario |
|---|---|---|
| Revenue | $250,000 | $310,000 |
| Marketing spend | $50,000 | $70,000 |
| MER | 5.00x | 4.43x |
| Contribution | $100,000 | $116,000 |
Contribution change
+$16,000
Incremental MER on added spend
3.00x
Each added $1 is forecast to return 3.00x in revenue. This is your forecast, not measured lift.
Assumptions and limits
Read MER as a blended health check, not proof of profit
MER is not incrementality
Total revenue includes repeat, organic, and word-of-mouth sales that might have happened without the spend. Use holdouts or lift tests to measure causal impact.
Contribution is before fixed costs
Contribution after marketing is gross profit minus marketing spend. Salaries, rent, and software still need to be covered before you reach net profit.
Scenarios are your forecast
The comparison uses the revenue you expect at a new budget and the same gross margin. Incremental MER shows the ratio of your forecast, not measured results.
Marketing efficiency ratio FAQs
How do you calculate marketing efficiency ratio (MER)?
Divide total revenue by total marketing spend for the same period. For example, $250,000 in revenue on $50,000 of marketing spend is a 5.0x MER.
What is break-even MER?
Break-even MER is 1 divided by your gross margin. At a 60% gross margin, break-even MER is about 1.67x, the point where gross profit exactly covers marketing spend before fixed costs.
What is the difference between MER and ROAS?
ROAS uses revenue a single ad platform attributes to its own spend. MER is blended: it uses all revenue and all marketing spend, so it avoids attribution overlap but cannot tell you which channel drove the result.
Does a high MER mean marketing is profitable or incremental?
Not on its own. MER includes revenue that would have happened without marketing, such as repeat and organic sales, and ignores fixed costs. Pair it with contribution margin and holdout or lift tests.
What is a good MER for ecommerce or SaaS?
There is no universal benchmark. A good MER is one comfortably above your own break-even MER that still leaves enough contribution to cover fixed costs and your profit goal.
Related free growth tools
Pipeline Velocity Calculator
Model revenue movement from opportunity count, deal size, win rate, and cycle length.
MQL to SQL Calculator
Measure the marketing-to-sales qualification handoff and plan lead volume.
Sales Win Rate Calculator
Calculate close rate, compare it with a target, and model the additional wins needed.
Get more revenue from customers you already paid to acquire.
DripAgent helps AI-built SaaS teams launch onboarding, activation, retention, and re-engagement emails that lift revenue without adding ad spend.
Try DripAgent free