Check your MER, because ROAS is lying to you

If you're running Facebook ads, I want to show you why ROAS is no longer the metric to use, why you should be looking at MER instead, what MER even is, and then, based on your MER, how to know whether you need to pull back budget or scale.

So number one, you already know ROAS. It stands for return on ad spend. And here's the thing. In 2026, and over the last couple of years, Facebook ads has been over-attributing sales, so what you're looking at is you spent this much and you made this much money.

Well, here's where things get funky, because Facebook is not your source of truth. You've got 182k in revenue, but does that mean you actually made 182k in sales? No. On Shopify the reporting is going to be accurate, and that's your source of truth, because Facebook ads can lie but Shopify can't.

So this is what Facebook is telling us.

And this is what Shopify says. The order count runs higher because Shopify is counting every order the store took, not only the ones Facebook is claiming.

So in the same month, Facebook ads is reporting 182k in sales and Shopify is reporting 167k. So someone is lying, and who is it? Well, it's Facebook, because they like to inflate their data and the revenue on it so that you keep spending more money, even when it's not beneficial to your bottom line. And obviously that could have a detrimental impact on your business if you're scaling unprofitably.

And you'll notice most of these months go the other way, where Shopify comes in higher than Facebook. That happens too, and I get into why at the bottom.

One note on the numbers. I've adjusted the figures here so the client stays anonymous. The ratios are the point, and those are untouched.

MER stands for Media Efficiency Ratio, and it's your total sales divided by your ad spend. So you'll see the delta here is not huge. On ROAS we're measuring at 4.59 versus MER at 4.21, and that's not a big gap in this instance, but I've seen brands where it's a lot worse. This can be the difference between scaling profitably versus scaling unprofitably.

So the first thing you want to do is take your total sales and divide it by your ad spend. If I have 100k in sales and I spend 50k, then my MER is 2. That's essentially your new ROAS, or the real true ROAS of your actual store.

So let's just say I have a product, and I'm selling it for $20, and I make $10 on it after my unit economics. So I have $10 of profit sitting there, but it also cost me $10 to acquire that customer. Then I'm not making any money. That means my CPA needs to come down, or my unit economics need to get better.

So let's say you run through these exercises and you understand your unit economics, and you understand what it costs you to acquire a customer. Well, if you understand your unit economics, then you can work out where you need to be to be profitable. And then you know what you would actually pay per customer to keep that profitability.

So based on those numbers you should be able to say: oh, I should not scale, because we're not profitable, the CPA, the cost to acquire a customer, is way too high. Or, we're in good standing because our MER is healthy, and you're not going to let Facebook ads lie to me, so you should scale.

So make sure you run through exercises like this, where you actually understand your economics, and you actually measure things down to your true ROAS, which is your MER.