MER
CALCULATOR
Find the number your marketing has to clear.
Enter your real costs and this works out your breakeven and your target, for an online store or a lead gen business. Every formula stays on the page, so you can check the math instead of taking it on faith. No sign up.
Your numbers, per average order
Use 30 normal days that ended two to three weeks ago. Mark anything you don't have as unknown and the results will tell you how far to trust them.
Where your numbers sit
Left of breakeven, extra ad dollars likely cost more than they bring back. Between breakeven and target, spend pays for itself but falls short of the profit you asked for. Right of target is where there may be room to push.
A first setting for a platform ROAS target
Platforms steer on their own reported ROAS, not your MER. This scales your MER target by how much revenue the platform claims and how much of your spend it gets. Treat it as a first setting for one prospecting platform, not the answer. It doesn't apply to brand campaigns.
One assumption to watch. This treats the platform's share of revenue as fixed. If you have a large organic or repeat base, that share usually shrinks as spend grows, because new dollars reach people who were less likely to buy anyway. Recheck the inputs after every increase instead of carrying the first number forward.
How the math works
What MER tells you, and why the target has to be yours
MER is total revenue divided by total ad spend. It doesn't care which channel takes credit. New customers, repeat orders, organic, email, all of it lands on top. That's the point of it. Platform ROAS is each platform grading its own homework, and platforms tend to be generous graders.
A good MER isn't something you can look up. Two brands running the same MER can be in opposite positions, because what a sale leaves behind after costs decides where the line sits. A brand keeping 65% of each order breaks even around 1.5x. A brand keeping 25% needs 4x before the first dollar of profit shows up. Borrowed benchmarks skip that step, which is why they tend to fall apart.
Targets
Turning MER into platform targets
You can't hand a platform your MER. It bids on its own reported ROAS. So the calculator scales your MER target by how much revenue that platform claims and how much of your spend it gets. If Google reports 70% of revenue on all of your spend, a 3.0x MER target becomes roughly a 2.1x ROAS setting.
Treat that as a first setting, not the truth. Change one platform at a time, give it two to four weeks, and judge the result on blended MER and contribution dollars rather than the platform's own column. Move in small steps. Large target jumps can cause bidding to pull back hard, and volume can drop faster than efficiency improves. Brand campaigns sit outside all of this and should be steered on impression share and presence instead.
Label the attribution model the revenue share came from. A platform-reported share and a clicks-only multi-touch share can differ a lot for the same account, and a target is only comparable to another target built on the same basis. And expect the share to drift. For brands with strong organic or repeat demand, a platform's share of revenue usually shrinks as spend climbs, so the starting setting should be rebuilt from fresh numbers after each step up, not carried forward.
The Numbers
Where each number comes
from
01.
Order value comes from order data, after discounts and before tax and shipping charged.
02.
Product cost and returns usually live with whoever owns the books. Line-item cost of goods is ideal. A blended percent works.
03.
Payment fees are on the processor statement. Marketplace and app fees are on their invoices.
04.
For the window, use 30 complete days that ended two to three weeks ago, reported by conversion date rather than click date. A window that ends yesterday undercounts what platforms will eventually credit, because conversions are still arriving.
05.
Skip windows with a stockout, a launch, or an unusual promotion. When a product can't be bought, spend and sales stop moving together and the ratio stops meaning much.
06.
If your ads also drive sales through dealers, retail partners, or wholesale, and that revenue isn't in your total, platform shares will look inflated relative to the revenue you're dividing by. Note it and lean conservative.
Lead Gen
The lead gen version
The store math assumes the sale happens on the site. Lead gen doesn't work that way. The platform sees a form fill, and the money shows up weeks or months later, somewhere the platform can't see. So the target gets built backward, from what a closed customer is worth and how many leads it takes to produce one.
Breakeven cost per customer = customer revenue × gross margin
Breakeven cost per lead = cost per customer × lead-to-close rate
Target cost per lead = breakeven cost per lead ÷ (1 + profit per $1)
First-year value is the safer default. Lifetime value makes more room, but only if retention is measured rather than assumed. Close rates should come from the CRM, over at least 90 days, and split by source if you can, because paid leads often close at a different rate than referrals.
The biggest upgrade for most lead gen accounts is usually sending qualified and closed outcomes from the CRM back to the ad platform, so it bids toward customers instead of form fills. Without that, the platform is optimizing for the cheapest submissions, which aren't always the ones that turn into revenue.
Fees & Tools
When agency fees and tools count
Some businesses count agency fees, freelancers, software, and creative production as marketing spend. Others keep them separate. Neither is wrong. What matters is knowing which one a number was built on before comparing it to anything. Add your monthly fees and the calculator shows breakeven both ways.
Inherited Targets
Checking a target you inherited
A lot of accounts steer to a number someone set once, and nobody remembers how it was derived. Enter it in the target field and the calculator shows where it sits against your actual breakeven. Sometimes it's fine. Sometimes it's been quietly leaving growth on the table. Sometimes it's been funding losses. All three are worth knowing.
What it can't do
What this calculator can't tell you
Breakeven here is incremental. Salaries, rent, and other fixed costs aren't in it, so a business can clear this line and still lose money overall.
It works on averages. If your product mix shifts, your real margin shifts with it.
MER includes revenue you would have earned anyway. It can't prove what your ads actually caused. Holdout and geo tests get closer to that answer than any ratio can.
Timing distorts it. Launches, seasonality, and new customer pushes can compress MER for a stretch while building value that shows up later. Track new customer revenue on its own during those periods.
For lead gen, every output is only as good as the close rates and customer value behind it. If those are guesses, so are the targets.
A dashboard shouldn't make you more confident than the data deserves. That includes this one.
FAQ
Common questions
01.
What is a good MER?
There isn't a universal one. A good MER sits comfortably above your own breakeven, and breakeven comes from your margin. Comparing your MER to another brand's tells you very little unless your margins match.
02.
How is MER different from ROAS?
03.
How do I calculate breakeven MER?
04.
Should my target change over time?
05.
What's a good cost per lead?
Reading the Numbers
Want someone to read your numbers?
If you're spending $20,000 or more a month on media and the math above doesn't line up with what you're seeing, send us what you entered. We'll tell you what it means, where we'd look first, and whether a conversation is worth having. Targets that came from somewhere nobody can explain are usually where we start.
Spending less than that? The calculator and guide above should get you most of the way, and they're yours to keep using.
