ROAS vs MER for fashion e-commerce

Define both sides of the ratio

For ROAS, specify whose attributed revenue you are using and which spend corresponds to it. For MER, name the business revenue definition and the included costs. Some teams use media spend; others include a wider marketing cost base. Put the formula next to the result.

A ratio based on gross order value is not equivalent to one based on value after cancellations and returns. Fashion teams should make that distinction explicit when assessing a collection or comparing promotional periods.

Aggregate the underlying values

When combining compatible campaigns, divide the sum of the relevant revenue by the sum of the matching spend. Do not take an unweighted average of individual campaign ratios and call it the overall ROAS. A small campaign should not receive the same implicit weight as a much larger one.

Also check duplicates and joins before aggregation. Repeated spend rows or mixed result types can produce a precise-looking but misleading number. Costs per landing-page view and costs per purchase describe different outcomes.

Use the ratios as signals

A high platform-reported ROAS can coexist with a weaker business picture if the value definitions or customer mix differ. MER can describe overall efficiency while hiding which activity caused a change. Bring both into a discussion with contribution margin, customer mix and timing.

Define what would justify an action. If a ratio changes, identify whether the numerator, denominator or observation basis changed first. Avoid treating every movement as a reason to raise or cut spend immediately.

Turn the guide into a useful review

1. Name the revenue and cost definitions.
2. Use consistent periods and currencies.
3. Sum compatible values before calculating the ratio.
4. Review returns, margin and new-customer mix.