Average order value (AOV) is the average amount customers spend each time they place an order. If a shop took 500 orders worth $27,500, its AOV is $55. In Meta ads, AOV decides how much of a sale is left to pay for the ad that won it.
How to calculate AOV
AOV = revenue ÷ number of orders
Use the same period and the same orders for both numbers. Leave out refunds you have already paid back, or say that you included them.
For ad reporting, you can work it out from Meta's numbers: purchase conversion value divided by the number of purchases. Meta calculates purchase conversion value by adding the value parameters you set for the purchase standard event, so AOV in Ads Manager is only as good as the values your Meta Pixel or Conversions API sends.
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AOV links two numbers you already watch.
ROAS = AOV ÷ cost per acquisition
That follows from return on ad spend (ROAS) being revenue divided by ad spend, while cost per acquisition (CPA) is ad spend divided by orders. A tea shop with an AOV of $55 and a CPA of $22 has a ROAS of 2.5.
Raise AOV and, with the same CPA, ROAS rises too. At an AOV of $66 and the same $22 CPA, ROAS is 3.0. Nothing about the ads changed: each win simply brought in more money.
The reverse matters as well. A low AOV leaves little room for acquisition cost. A store selling $20 orders cannot pay $22 to win a customer unless those customers come back.
Ways to raise AOV
- Bundles and sets. Package items that go together at a small discount to the sum.
- Free-shipping threshold. Set it a little above the current average so shoppers add one more item.
- Upsells and cross-sells. Suggest a larger size or a related item at checkout.
- Better products in the ad. Lead with the higher-value item or set instead of the cheapest one.
- Minimum quantities. Offer multi-pack pricing for products people reorder.
Test each change on its own. A new threshold may lift AOV while lowering the number of orders, which is only a gain if revenue goes up.
Common mistakes
- Chasing AOV alone. A higher order value does not help if your margin shrinks to fund it, for instance through heavy discounts.
- Trusting the average. A few large orders can lift the mean. Look at the spread or the median when AOV and ROAS seem out of step.
- Mixing audiences. New customers and returning ones often order different amounts. Compare like with like.
- Ignoring repeat orders. A low first-order AOV can be fine when customer lifetime value is high.
Example. A tea shop spends $11,000 on Meta ads in a month and wins 500 orders worth $27,500. AOV is $27,500 ÷ 500 = $55. CPA is $11,000 ÷ 500 = $22, and ROAS is 2.5. The shop adds a "free shipping over $65" banner and a three-tin gift set. The next month, 480 orders bring in $31,680, an AOV of $66, for the same $22 CPA on $10,560 of spend. ROAS rises to 3.0, and the shop can set a higher ROAS target without losing profit.
In Madgicx. One-Click Report brings Meta, Google Ads, TikTok, Shopify and Klaviyo data into one place, so you can set platform revenue next to store orders when you check AOV.
FAQ
What is a good average order value?
A good AOV is one that leaves room for acquisition cost after your costs. Compare AOV with your contribution margin and CPA: if the margin on an order is smaller than what it costs to win that customer, the order loses money.
How do you calculate average order value?
Divide total revenue by the number of orders in the same period. $27,500 of revenue from 500 orders gives an AOV of $55.
How is AOV different from customer lifetime value?
AOV looks at a single order. Customer lifetime value looks at everything a customer spends with you over time. A shop with a low AOV and many repeat buyers can have a high lifetime value.
How does AOV affect ROAS?
ROAS equals AOV divided by CPA. When AOV goes up and CPA holds, ROAS goes up by the same share. When AOV falls, CPA must fall too to keep ROAS where it was.
Where do I find AOV in Meta Ads Manager?
Work it out as purchase conversion value divided by purchases, or take order data from your store, which counts every order once.
Related
- Related terms: Return on ad spend (ROAS), Cost per acquisition (CPA), Customer lifetime value
- In depth: E-commerce KPIs to track
Sources
- Website Purchases Conversion Value, Meta Business Help Center
