Average Order Value (AOV) is a metric used by eCommerce businesses for measuring how much their customers are purchasing on average. Total AOV is calculated by dividing total revenue with the number of orders. In the context of digital marketing, it is common to look at AOV for a channel or a campaign by dividing conversion value attributed to the campaign with the number of conversions attributed to the campaign. This enables assessing which channels or campaigns are driving the highest-value customers to the website.
A high Average Order Value for a channel or campaign means that it is driving high-value customers to the website, indicating good performance in audience targeting and other campaign parameters. In the case of low AOV, a channel or a campaign might be driving traffic to the website, but the targeted audience is not make large purchases.
Average Order Value Formula
Total Average Order Value = Total Revenue / Number of Orders.
Average Order Value of a campaign = Conversion Value attributed to the campaign / Number of conversions attributed to the campaign.
Example Calculation for Average Order Value
If $50,000 worth of conversion value can be attributed to a campaign, consisting of 500 conversions, AOV for the campaign is $100
| Conversion value attributed to the campaign | $50,000 |
| Number of conversions attributed to the campaign | 500 |
| Average Order Value | $100 |
How are Attributed Conversions Measured?
Total AOV is easy to calculate, but channel- or campaign-level AOV requires attributing purchases to specific campaigns or channels, using conversion tracking. To enable conversion tracking, advertisers has to implement advertising platform's tracking method on their website, often called "tracking pixel". Tracking pixel sends users' conversion events back to the advertising platform, making it possible for the advertising platform to connect conversion events with campaigns.
It is important to understand that attribution is based on certain attribution rules. For example, Google Ads often has a default setting for attributing a conversion to a campaign, if a person clicked an ad within the last 30 days. Attribution settings, including the attribution window, are typically open for advertisers' adjustment.
How Is Average Order Value Tracked?
The easiest way to track Average Order Value across all platforms, is to use a modern media measurement tool, such as Sellforte, which automatically consolidates all digital data into one platform and processes it for easy analysis. Below is an example of advertising channel -level tracking view for Average Order Value, based on the Sellforte demo.
Average Order Value in the Media Metric funnel
Average Order Value is a performance ratio in the Media Metric funnel. Media Metric funnel is an abstraction of consumers' buying journey:
- Impressions measure how many people saw the ad
- Clicks measure how many people clicked the ad
- Conversions measure the number of purchases made by people clicking the ad (within a certain attribution window)
- Conversion value measures the total value of purchases made by people clicking the ad (within a certain attribution window)
Cost-efficiency metrics in the funnel include: Cost Per Mille (CPM), Cost Per Click (CPC), Cost Per Conversion, Return On Ad Spend (ROAS).
Performance ratios in the funnel include: Click-Through Rate (CTR), Conversion Rate, and Average Order Value.
How is Average Order Value used by Digital Marketers?
Average Order Value is used by digital marketers in following use-cases:
- Effectiveness Measurement: Digital marketers can compare AOV of campaigns and channels to evaluate how well they are driving high-value traffic to their website. A low AOV indicates challenges in audience targeting and other campaign parameters.
- ROI deep-dive analyses: When analyzing why ROI of a channel or campaign has increased or decreased, digital marketer can analyze whether a change in AOV could be an explanatory factor for the increase / decrease.