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Glossary · Metrics

What is AOV?

Also known as Average order value.

Definition

AOV (average order value) is total revenue divided by number of orders. $48,000 across 600 orders is an AOV of $80. AOV matters for advertising because it sets your CPA ceiling: gross profit per order is AOV multiplied by margin, and that is the most you can pay to acquire a customer.

How it is calculated

AOV = Revenue ÷ Orders

What to know

Raising AOV is often easier than lowering CPA, because AOV depends on your bundle, upsell and free-shipping threshold rather than on winning an auction against every other advertiser.

At a 45% margin, moving AOV from $80 to $100 raises your break-even CPA from $36 to $45. That is a 25% higher bid ceiling without improving a single ad.

Related terms

CPACPA (cost per acquisition) is ad spend divided by the number of conversions. Spending $2,000 to generate 50 co...Break-even ROASBreak-even ROAS is the return on ad spend at which a campaign covers its costs exactly, calculated as 1 divide...Conversion rateConversion rate (CVR) is conversions divided by clicks or sessions, expressed as a percentage. If 1,600 clicks...

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