Glossary
Average order value: what it is and why it sets your max CPA
AOV is what each sale leaves you. The formula, why it decides how much you can pay per sale, and how to raise it without touching media budget.
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Average order value is what each sale brings in, on average. Divide revenue by the number of orders in the period. Sell US$ 45,000 across 150 orders and your AOV is US$ 300. In paid advertising it is the number that decides everything else: without it, no acquisition cost can be judged.
Formula
AOV = revenue ÷ number of orders.
Two practical warnings. Use the same period for both, and decide whether you are working with gross or net revenue. Mixing gross one month and net the next produces a series that means nothing.
Why it sets your maximum CPA
The path is short, and almost nobody walks all of it:
- AOV: US$ 300.
- Gross margin of 40%: US$ 120 per sale.
- You decide to spend up to a third of that margin on acquisition: US$ 40.
That US$ 40 is your target CPA. Above it, every extra sale makes the month worse. Without AOV, "a CPA of US$ 40" is a floating number nobody can approve or reject.
How to raise it without spending more on media
Lifting AOV is the cheapest lever in an ad operation, because it does not depend on the auction:
- Bundles and packages raise value per order without acquiring anyone new.
- Order of presentation. Showing the middle tier first moves the average.
- Checkout add-ons that are small, relevant and frictionless.
- Separate campaigns by value. High-ticket products deserve their own budget and objective.
That last one gets ignored often: when a US$ 30 product and a US$ 500 product share a campaign, the algorithm optimises toward whichever converts more easily, and AOV falls even as order count rises.
The reading that misleads
A rising AOV can hide falling volume: fewer customers, but more expensive ones. Always read it next to order count and ROAS, never on its own.
With order value and margin in hand, the next step is setting a target CPA per campaign and reviewing it weekly. The pricing page shows which plans include write actions, which let you adjust a budget straight from the chat when a campaign runs past its limit.
Frequently asked questions
How do I calculate average order value?
Divide revenue for the period by the number of orders in that same period. Use net revenue if you want a number you can compare against margin.
Why does AOV matter for ads?
It sets how much you can afford to pay for a sale. Without it, no cost per acquisition can be judged as good or bad.
Raise AOV or lower cost per sale?
Raising AOV is usually faster and does not depend on the auction. A 15% lift in order value changes your margin immediately, with no fight for cheaper clicks.