Ad glossary
AOV (average order value)
The average amount a customer spends per order, calculated as total revenue divided by the number of orders.
AOV, or average order value, is the average revenue per order over a given period. It is one of the main levers in ecommerce unit economics, because a higher AOV spreads your acquisition cost over more revenue per transaction.
How to calculate it
AOV = total revenue ÷ number of orders
Worked example (made-up numbers): your store generated $24,000 from 600 orders last month. AOV = 24,000 ÷ 600 = $40.
Why it matters for paid ads
Your ad cost per order is driven by CPA, but your profit per order depends heavily on AOV. If it costs $20 in ads to win an order, the economics look very different at a $40 AOV than at a $70 AOV. Raising AOV can make campaigns profitable without any change to targeting or creative, because it increases the amount you can afford to pay for each order.
Ways to raise AOV
- Bundles: group complementary products or offer multipacks at a modest saving.
- Upsells and cross-sells: suggest a premium version or add-on before or after checkout.
- Free-shipping thresholds: set a threshold slightly above your current AOV.
- Quantity breaks: offer a lower unit price when customers buy two or three.
Watch out for
Raising AOV with heavy discounts can lower your margin per order, so check contribution margin rather than AOV alone. Also segment AOV by channel and by new versus returning customers, since a blended figure can hide important differences.
Last reviewed Oct 27, 2026