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GLOSSARY DEFINITION • D2C BRANDS

Marketing Efficiency Ratio (MER)

Total brand revenue divided by total marketing spend across all channels, representing overall commercial acquisition efficiency.

MER FORMULA & STANDARD
MER = Total Store Gross Revenue (₹) ÷ Total Paid Media Spend (₹)

₹50,00,000 store revenue ÷ ₹10,00,000 total ad spend = 5.0 MER (20% marketing cost)

01 / DEFINITION & SIGNIFICANCE

Why MER matters for D2C Brands

Total brand revenue divided by total marketing spend across all channels, representing overall commercial acquisition efficiency.

With privacy updates obscuring platform attribution, MER serves as the ultimate North Star for D2C founders. It reveals the exact percentage of top-line revenue consumed by total marketing expenditures.

02 / THE CALCULATION BLUEPRINT

How to track and calculate MER

MER = Total Store Gross Revenue (₹) ÷ Total Paid Media Spend (₹)

₹50,00,000 store revenue ÷ ₹10,00,000 total ad spend = 5.0 MER (20% marketing cost) Tracking this metric systematically inside your analytics stack eliminates guesswork and aligns marketing spend with true business outcomes.

03 / INDUSTRY BENCHMARK MATRIX

Typical MER benchmarks by segment

Segment / Business Model Typical Range DesignScript Target
High-Growth Scale Stage (₹1Cr+/mo)3.5x – 5.0x> 4.0x
Mature Profitable Brand5.0x – 7.5x> 6.0x
Early Launch Phase2.5x – 3.5x> 3.0x
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