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Book a call →Average Order Value (AOV) explained in plain English: the formula, worked examples and what to change when the number is off.
Average order value (AOV) is how much a customer spends per order on average. The AOV formula is total revenue ÷ number of orders: $12,000 from 150 orders is an $80 AOV. AOV matters for advertising because it sets how much you can afford to pay for each sale.
AOV = total revenue ÷ number of orders5,000+ B2B brands. Coaches, agencies, and service providers turning video into a growth engine.
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Revenue: $12,000 Orders: 150 AOV = $12,000 ÷ 150 = $80
From an order export with one row per order and the order total in column D, use =AVERAGE(D:D). From summary numbers, use =revenue/orders, e.g. =B2/C2. Calculate AOV per channel or per campaign by filtering the export first, because ad-driven orders often have a different AOV from repeat buyers.
Every sale has to pay for the ad that brought it in. Break-even CPA = AOV × gross margin, so raising AOV raises how much you can afford per sale without changing anything else.
AOV $60, margin 55% → break-even CPA $33 AOV $80, margin 55% → break-even CPA $44
AOV is per order; lifetime value (LTV) is per customer over all their orders. A store with a low AOV but frequent repeat orders can afford a higher customer acquisition cost than its AOV alone suggests. Use AOV for first-order profitability and LTV for long-term planning.
If Store A has an AOV of $50 and Store B has an AOV of $120, Store B can afford to spend $60 to acquire a customer while Store A goes bankrupt at anything over $25 CPA. He who can spend the most to acquire a customer wins.
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