Average order value (AOV) tells what is the average revenue made per order thanks to the ads.
Why is AOV important?
It helps to better understand customer behaviour and plan marketing strategies to improve the value of order based on it. For example if AOV is low, it indicates that customers prefer smaller purchases, which can lead to less revenue and profit. Based on this business can implement different strategies in order to bring the average order value up.
How to improve AOV on PPC?
There is no one right answer but there are a couple ways on how to positively affect it: retarget previous purchasers based on their purchase history, upselling more expensive products, separating and bidding more on higher value products than lower value product campaigns.
Calculation:
AOV = revenue / conversions
Example:
Sherpa received 12 orders yesterday, driving £9,000 in revenue. The average order value was £750 (£9,000/12=£750)
