Platform ROAS: Useful, but Not the Truth
ROAS (return on ad spend) is revenue attributed to ads divided by ad spend. Within one platform it is a good way to compare campaigns and ads. Across platforms it breaks down: Meta, Google and Amazon each use their own attribution windows and models, and the same customer journey can be claimed by more than one of them.
"If Meta says 3×, Google says 5× and your bank account says the business barely grew, believe the bank account."
MER: The Number That Can't Double-Count
MER (marketing efficiency ratio) is total revenue divided by total marketing spend, across every channel. It ignores attribution entirely, which is exactly its strength: it tells you whether marketing as a whole is getting more or less efficient. When you scale a channel, MER tells you whether the business actually benefited.
Breakeven ROAS: Know Your Floor
Before judging any ROAS, you need to know the level at which you stop losing money. Breakeven ROAS = 1 ÷ contribution margin, where contribution margin is what is left of each sale after product cost, shipping, payment fees, marketplace fees and returns.
If your contribution margin is 40%, your breakeven ROAS is 1 ÷ 0.40 = 2.5. A campaign at 2.2× is losing money on the first order; a campaign at 3.5× is profitable. Without this number, "good ROAS" is just a feeling.
CAC and Payback: For Repeat-Purchase Businesses
CAC (customer acquisition cost) is marketing spend divided by the number of new customers acquired. It matters most when customers buy again: a brand whose customers reorder every month can afford a higher CAC — and a lower first-order ROAS — than one that sells a product people buy once. Track how long it takes for a customer's cumulative margin to pay back their acquisition cost.
Where Amazon Fits
On Amazon the same logic appears as ACOS versus TACOS. ACOS is the platform-level efficiency number; TACOS (ad spend divided by total sales, including organic) is closer to MER — it shows whether advertising is building the business or just buying the same sales. Our ACOS vs TACOS article covers it in detail.
The Weekly Scorecard
- MER — is marketing as a whole getting more efficient?
- New-customer CAC — what does each new customer cost?
- Breakeven ROAS by product line — the floor every campaign is judged against
- Platform ROAS — for decisions inside each platform, not between them
- TACOS on Amazon — is advertising building organic sales?
How We Use These Numbers
We agree breakeven and target numbers with each client before launch, judge campaigns inside each platform on platform metrics, and make budget decisions between platforms on blended ones. When the two disagree — a channel's ROAS looks weak but MER improves whenever it scales — we trust the blended view and test to confirm.
The right metric is the one that answers the question you are actually asking. Use platform ROAS to optimise inside a channel, and MER, CAC and breakeven ROAS to decide where the next rupee should go.