From Chanticleer Society

ABV stands for "(percentage of) Alcohol By Volume" and represents the percentage of pure alcohol in a spirit, product, or drink. 100% ABV would be pure alcohol (and is technically extremely difficult to achieve).

For drinks of similar volume, knowing the ABV can help customers moderate their consumption, which is why some bars are now listing the ABV for the drinks they serve. This value however can be misleading if the drinks are of different volume.