Metrics & NumbersAOV
What is AOV? Meaning, Formula, and How to Raise It
Also known as: Average Order Value, average basket size
Short answer
AOV is the average value of one transaction. An AOV of $350 means each order is worth $350 on average. Raising AOV lowers the ROAS you must hit, because each buyer brings in more money.
Formula
AOV = Total Revenue / Number of Transactions
Example
$70,000 in revenue across 200 transactions. AOV = 70,000 / 200 = $350.
Why this number changes ad strategy
Your CPA ceiling comes from profit per transaction, and profit per transaction comes from AOV.
| AOV | Margin 40% | Profit per order | Safe maximum CPA |
|---|---|---|---|
| $150 | 40% | $60 | under $60 |
| $350 | 40% | $140 | under $140 |
| $700 | 40% | $280 | under $280 |
An advertiser with a higher AOV can outbid you for the same buyer. That is why raising AOV is often easier than cutting CPA.
How to raise it
- Bundles. Group products people already buy together.
- Free-shipping threshold. Set it slightly above your current AOV.
- One checkout add-on. Just one, so it never disrupts payment.
- Increase pack size, not unit price.
Frequently asked questions
- Why does AOV matter for advertising?
- Your CPA must stay below the profit on one transaction. If AOV rises from $200 to $350, you can afford a higher CPA and still profit. That widens the audience you can reach.
- How can I raise AOV without raising prices?
- Offer multi-packs, add a companion product at checkout, and set a free-shipping threshold slightly above your current AOV. All three lift order value without changing unit price.
- What is the difference between AOV and LTV?
- AOV counts one transaction. LTV counts every transaction from one customer over their whole life as a customer. Businesses with repeat purchases should set CPA limits from LTV.
Related terms
Your ad numbers are only as accurate as the data behind them
Konektor captures the Click ID and sends conversions that close on WhatsApp, over the phone, or in a shop back to the ad platform.