If you’ve been in the DTC space for more than five minutes, you’ve probably heard the phrase “ROAS is king.” But in 2025, that crown is slipping.
Direct-to-consumer brands are shifting their focus from Return on Ad Spend (ROAS) to a broader, more sustainable metric: Marketing Efficiency Ratio (MER). It’s not just a new acronym to throw around in your Monday morning metrics meeting — it’s a strategic evolution that better reflects the complexity of modern marketing.
Here’s why.
ROAS: The Once-Untouchable KPI
ROAS used to be the north star for ecommerce growth. It’s simple: for every dollar you spend on ads, how much revenue do you make?
The problem? ROAS is channel-specific and attribution-dependent. And in a world where iOS updates, cookie deprecation, and multi-touch customer journeys are the new norm, attributing revenue to specific ad platforms is becoming increasingly murky — if not outright misleading.
Platforms like Meta and Google are still important, but they no longer give the full picture.
MER: A Holistic View of Marketing Performance
Enter MER, also known as Blended ROAS or Marketing Efficiency Ratio. It’s calculated by dividing your total revenue by your total marketing spend — regardless of channel.
MER = Total Revenue / Total Marketing Spend
It gives brands a top-down view of how efficient their entire marketing machine is, not just individual parts of it. And in 2025, with customers bouncing between TikTok, newsletters, influencers, and podcast ads before they ever click “Buy,” this kind of high-level metric is essential.
Why the Shift Now?
Several macro and micro trends are driving the pivot from ROAS to MER:
1. Privacy Changes Are Breaking Attribution Models
With iOS 17, Google Privacy Sandbox, and other regulatory shifts, the data advertisers once relied on to track users is now fragmented — or gone altogether.
2. Omnichannel Is the Norm
DTC isn’t just about Facebook ads anymore. Brands are scaling through owned media, retail partnerships, influencer collabs, email/SMS, and community. ROAS can’t account for this complexity. MER can.
3. Creative and Brand Equity Matter More
Performance isn’t just about the last click. It’s about how compelling your brand is across the board — something MER helps reflect by tying marketing spend to total business performance.
4. Cash Flow Clarity
MER ties directly into profitability. If you know your fixed costs and margins, you can calculate how efficient your marketing needs to be to break even or hit profitability. It’s a CFO’s dream.
Also Read: Performance Marketing Bootcamp
How DTC Brands Are Implementing MER in 2025
The smartest DTC operators are doing more than just switching KPIs — they’re rebuilding their reporting infrastructure around MER. Here’s what that looks like:
- Weekly MER Dashboards that track total revenue, spend, and efficiency.
- Media Mix Modeling to understand the long-term impact of each channel.
- Creative Reporting that links content performance to blended sales.
- Customer Cohort Analysis to tie spend back to LTV, not just CAC.
And most importantly, they’re aligning their growth teams (marketing, finance, ops) around a shared goal: profitable scale.
TL;DR: ROAS is Myopic. MER is Mature.
In 2025, DTC brands don’t just want to grow — they want to grow smart. That means trading in short-sighted ROAS obsession for a more mature, business-wide metric: MER.
It’s not just a shift in measurement. It’s a shift in mindset.
