There are a few key differences between MER vs ROAS and we're here to explain it
ROAS and MER are similar metrics, but offer different insights, aimed to assess ROI of marketing efforts.
Where do I find MER and ROAS on my Northbeam dashboard?
You can find both of these metrics on the Overview Page in your accounting modes. MER is advertising ROI in Cash Accounting, while ROAS is advertising ROI in Accrual Performance.
What is MER?
MER stands for Media Efficiency Ratio and looks at the total revenue and total spend for a specific time period. MER helps explain cash flow (cash in, cash out) but does not incorporate conversion lag.
What is ROAS?
ROAS stands for Return on Ad Spend. ROAS measures the efficiency of marketing no matter the time horizon. In other words, ads are looked at on a cohort basis and tracked over time, as revenue trickes in. ROAS is meant to incorporate conversion lag and be a living, breathing performance metric. ROAS will grow over time as more transactions are attributed/associated back to the ad.
✏️ NOTE: We generally recommend Accrual Performance and ROAS to benchmark success.
How is ROAS calculated?
📚 EXAMPLE: We spent 100k on a campaign today
-
- It start with 0 ROAS
- Tomorrow after earning 75k in revenue, it shows a 0.75 ROAS
- In a week it has garnered 150k in revenue, it shows a 1.5 ROAS