Definition
AOV measures the average revenue per order. It affects your allowable CPA at a given margin.
Formula
AOV = revenue / orders
Example
If you had $40,000 of revenue from 500 orders, AOV = $40,000 / 500 = $80.
How to use it
- Use AOV with gross margin to estimate contribution per order.
- Track AOV by channel and campaign (intent differs).
Common mistakes
- Using AOV without accounting for refunds/returns (net revenue can be lower).
- Comparing AOV across channels with very different product mixes.
Why this matters
This term matters because it affects how you interpret performance and make budget decisions. If you use inconsistent definitions or windows, ROAS/CPA can look "better" while profit gets worse.
Practical checklist
- Write a 1-line definition for "AOV (Average Order Value)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Paid Ads Funnel Calculator) to sanity-check assumptions.
- Read the related guide (e.g., Paid ads funnel: CPM, CTR, CVR -> CPC, CPA, ROAS (with profit)) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Paid Ads Funnel Calculator: Model CPM -> CTR -> CVR to estimate CPC, CPA, ROAS, and profit per 1,000 impressions (with margin and variable costs).
- Incrementality Lift Calculator: Estimate incremental conversions, incremental ROAS, and incremental profit from a holdout test.
- Marginal ROAS Calculator: Estimate diminishing returns and find the profit-maximizing ad spend from a simple response curve.
- Max CPC Calculator: Compute break-even and target CPC (and optional CPM) from CVR, AOV, and contribution margin assumptions.
- Break-even CPM Calculator: Compute break-even and target CPM from CTR, CVR, AOV, and contribution margin assumptions.
Guides
- Paid ads funnel: CPM, CTR, CVR -> CPC, CPA, ROAS (with profit): A practical guide to the paid ads funnel: how CPM, CTR, and CVR drive CPC, CPA, ROAS, and profit - with formulas and common pitfalls.
- Incrementality lift: how to compute incremental ROAS from holdouts: Turn an exposed vs holdout test into incremental conversions, incremental ROAS, and incremental profit for decision-making.
- Max CPC and break-even CPC: how to set bidding targets from margin: A practical guide to max CPC: translate AOV, CVR, and contribution margin into break-even CPC and a target CPC with buffer.
- Break-even CPM: how to price impressions from CTR, CVR, and margin: A practical guide to break-even CPM: translate CTR, CVR, AOV, and contribution margin into a max CPM and a target CPM with buffer.
- Break-even CTR: required CTR at a given CPM (with buffer): A practical guide to break-even CTR: set creative CTR targets from CPM, CVR, AOV, and margin, then use them to diagnose pre-click performance.