What is AOV (Average Order Value)?
AOV is the average revenue per order. It increases when customers buy more items or higher-priced items. AOV is one of the cleanest levers to improve ROAS/POAS without chasing more traffic.
Understanding AOV
Improving AOV compounds results: the same number of orders creates more revenue, which raises ROAS and lowers ACOS. Catalog creative can highlight bundles, upgrades, and social proof to nudge bigger carts. Clear pricing and transparent promos reduce friction that suppresses basket size. Merchandising and landing experiences shape which add‑ons feel natural. Treat AOV as the outcome of many small nudges across the path to purchase.
Templates that surface ratings, savings, and complementary items encourage exploration. Product‑level video can show premium variants or bundles in context. Free shipping thresholds, when set just above current AOV, can lift average baskets without killing margin. PDP consistency with ads protects trust and reduces back‑button behavior. Over time, a steady drumbeat of small AOV lifts makes paid media more forgiving.
Why AOV matters
Higher AOV makes paid media more forgiving by increasing revenue per conversion. It cushions CPC increases and allows more placements to clear your targets. It also supports broader prospecting because each conversion carries more value.
How to Calculate AOV
- Formula: AOV = Total Revenue ÷ Number of Orders
- Example: $120,000 revenue on 3,000 orders → AOV = $40
- Track by product set/category to spot where creative or pricing changes land.
Key Takeaways
- AOV (average order value) is total revenue divided by number of orders.
- Increase AOV through bundling, upsells, free shipping thresholds, and clearer product merchandising.
- Show related products and reviews in catalog ads to encourage larger baskets.
- Track AOV by channel and audience segment to identify high-value customer patterns.
