What does "Average Order Value" mean?
Definition of Average Order Value in the context of A/B testing (online controlled experiments).
What is Average Order Value?
Alias: AOV
Average order value (AOV) is frequently used in A/B tests where the intervention is aimed at increased the revenue from each order and not necessarily the number of orders / proportion of people who purchase. AOV is a non-binomial metric computed as any other arithmetic mean: the sum of the total revenue from all relevant orders is divided by the number of orders.
The same metric is sometimes called average purchase value (APV) or average revenue per transaction (ARPT). As with any other continuous metric it requires a bit more work in order to estimate the standard deviation while planning a test and also the entire data set after the test is completed.
Average order value is also used as a secondary KPI or co-primary KPI next to a primary (conversion rate KPI, however it usually makes more sense to use average revenue per user instead.
Like this glossary entry? For an in-depth and comprehensive reading on A/B testing stats, check out the book "Statistical Methods in Online A/B Testing" by the author of this glossary, Georgi Georgiev.
Related A/B Testing terms
Non-Binomial MetricStatisticRevenue per UserAverage Revenue Per UserSee this in action
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