What Is Average Order Value?
Also written as AOV, avg order value, average basket.
Definition
Average order value (AOV) is the typical amount a customer spends in one order. You get it by dividing revenue by the number of orders. For an ecommerce store on Google Ads, AOV is the other half of ROAS. A cheap click can still lose money if the basket is small.
Written by Christopher Krassnig, Founder & CEO of ZenoX Media. Written by the ZenoX team from the accounts we run. Definitions are general; the numbers in examples are maths, not client results.
Average Order Value, Explained
ROAS is revenue divided by ad spend. Revenue is AOV times the number of orders. A store with an 80 dollar AOV and a 2 percent conversion rate can pay more per click. A store with a 25 dollar AOV at the same rate cannot. Work the math before you judge a CPC.
Say you convert 2 percent of clicks and your AOV is 40 dollars. One hundred clicks bring two orders and 80 dollars of revenue. If those clicks cost 1 dollar each, you spent 100 dollars to make 80. That is a 0.8 ROAS, no matter how cheap the click felt. What works instead is a bigger basket, a better conversion rate, or a lower CPC, not a prettier dashboard.
The mistake is chasing ROAS and ignoring AOV. A rising ROAS with a falling basket can hide a cheaper mix. You may be selling cheap items to people who were going to buy the expensive one. Watch AOV next to conversion rate and cost per sale. If AOV drops while spend rises, the campaign is buying a different customer, not a better one.
How We Use It at ZenoX
We watch AOV next to ROAS on the 200+ ecom accounts we run. When Shopify is connected, we take revenue from Shopify, not from Google Ads. Holding ROAS by filling the cart with cheap items is not a win. The basket and the margin went the other way.
Questions People Ask About Average Order Value
What Is Average Order Value in Google Ads?
It is revenue divided by orders: the typical basket. Google Ads does not have a special AOV report you must find. You can work it from conversion value and conversions, or from your store's own orders. For a shop, it tells you how much room you have on cost per click.
How Does AOV Affect Google Ads ROAS?
ROAS is revenue over spend, and revenue is AOV times orders. Break-even ROAS is 1 divided by your net margin. At 40 percent margin that is 2.5, so a 50 dollar AOV can only spend 20 dollars in ads per sale. A lower AOV shrinks that room. A higher AOV gives you more room to bid.
On the call, we look at your account live. If we can grow it, we will show you how. If we cannot, we will tell you that too, and point you at someone who can.
We work with brands serious about scale. If that is you, let's talk.
