How to set a MER target with a client

A target that nobody can derive will be argued about every month. A target built from the margin can be checked.

Measurement and reporting · 4 min read · Updated 2026-10-07

Start from the floor

Calculate the contribution margin share, then break-even MER = 1 / margin share.

Decide with the client how much profit the marketing should make on top of covering its cost.
Set the target above the floor, and write down the assumption.

Margin share 40 percent gives a floor of 2.5. The client wants a healthy profit, so the target is 3.0, reviewed each quarter.

Both numbers answer the same question, how much revenue each unit of spend must bring to avoid a loss, but at two different levels.

Revenue pays for nothing until the costs of the order are taken away. Contribution margin is the number that tells you how much room the ads have.

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