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MER target

A MER target is the level of MER the business needs to reach its profit goal. It comes from the contribution margin and any other costs the ads must cover.

Stock photos and example labels, not customers.

Definition

A MER target is the level of MER the business needs to reach its profit goal. It comes from the contribution margin and any other costs the ads must cover.

FormulaBreak-even MER = 1 / contribution margin share

Example with made-up numbers: With a contribution margin of 40 percent, break-even MER = 1 / 0.40 = 2.5. A target of 3.0 leaves room for profit.

How to use it

The break-even MER is the floor: below it marketing loses money. A target adds the profit you want on top.

Write the target, the date it was set and the margin it assumes. When margins change, the target must change too.

Related terms

MER Break-even ROAS Contribution margin

Go deeper

Break-even MER vs break-even ROAS

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

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