AdParlor Academy Paid Digital Glossary

Plain language explainers to help you keep up with the evolving digital landscape.

Average Order Value (AOV)

What is AOV?

AOV stands for "Average Order Value" AKA, basket size. It measures the average monetary value of orders placed by customers within a specific time frame. AOV is an important e-commerce metric used to assess customer spending habits, pricing strategies, and overall revenue generation.

How to measure AOV?

AOV is calculated by dividing the total revenue generated by the total number of orders.

AOV = Total Revenue / Total Number of Orders

Example: If an e-commerce store generates $50,000 in revenue from 1,000 orders, the AOV would be $50.

Why is AOV important to marketers?

AOV provides insights into customer purchasing behavior and helps marketers understand the average value of each transaction. By monitoring AOV, marketers can implement strategies to increase customer spending, such as upselling, cross-selling, and offering discounts on larger orders.

Who needs to know what AOV is:

  • Digital marketers
  • Content marketers
  • Email marketers
  • Paid search marketers
  • Social media marketers
  • Conversion rate optimizers
  • Web designers
  • Product managers
  • eCommerce businesses
  • SaaS companies
  • B2B companies
  • B2C / D2C companies

Use AOV in a sentence:

The e-commerce team analyzed the AOV of their online store to identify opportunities for increasing revenue and improving profitability through strategic pricing and promotional initiatives. High AOV audiences are great to use as high-value retargeting and prospecting seed audiences.