The Definition of Bounce Rate and Exit Rate
The definition of Bounce Rate is the percentage of visitors that hit your website on a given page and don’t visit any other pages on your site. For example, Dustin views an organic search listing, clicks through to your site, and then leaves your site without visiting any other pages. He bounced. You can learn more about lowering your bounce rate here.

The definition of Exit Rate is the percentage of visitors that leave your site from a given page based on the number of visits to that page (or pageviews in some cases). Sounds similar to Bounce Rate, doesn’t it? There’s a difference, though. The visitor who exits might have visited other pages on your site, but just exited on that specific page. For example, Dustin views an organic search listing, clicks through your site, reads a blog post, then clicks the About Us link. After finding out more about your company, Dustin clicks the contact us link and fills out a contact form. He then exits your site. The contact us page is where he exited. In contrast, if he simply visited the site via organic search and left without visiting any other page, it would have been a bounce. Make sense?

Why are Bounce Rate and Exit Rate Important?
Both metrics are important and can help web marketing people glean insights from the data, but they are definitely used differently. Bounce Rate is extremely important for determining how your landing pages perform as compared to visitor expectations. For example, if you run paid search campaigns, then you know the importance of testing a landing page (optimizing the landing page). I find that bounce rate at the aggregate level doesn’t tell you very much (site level bounce rate), but I find that bounce rate at the page level is extremely useful. It actually makes a lot of sense if you think about it. For example, if you are driving paid search visitors to your landing page selling Coffee Makers, and you have a 70% Bounce Rate on that page, you’ve got a problem. Why are that many visitors bouncing after clicking through your paid search ad and landing on a page that theoretically should be highly targeted? This is actually the fun part…digging into the data, optimizing the page, and using multivariate testing to lower your bounce rate and to increase conversion. As you can see, bounce rate can help you determine how well your landing pages perform (which directly affects revenue and ROAS).

It could be argued Exit Rate is more important for determining which page in a process isn’t performing up to expectations. For example, if you have mapped out scent trails on your site (ala Persuasion Architecture), and you find visitors are exiting the site on a webpage that clearly is a stepping stone to a more important page, then you should probably take a hard look at that page’s content. Are the calls to action not compelling enough? Does the page provide content that throws off visitors? Is there a technical issue with the page? Does it take too long to load? So on and so forth. Note, that for specific processes like cart checkout, you should use funnel analysis, but analyzing exit rate for more open ended processes works well (like targeting a type of buyer and providing a scent trail for them to get to a registration form.)

Different Yet Important
As you can see, both metrics are very different, but both are important. My recommendation is to start analyzing Bounce Rate and Exit Rate for key pages and processes on your site. I would begin with a focused effort, like a landing page that receives a lot of paid search traffic (for Bounce Rate) and possibly a lead generation process on the site for Exit Rate (if you have one). I won’t cover the process of optimizing your content in this post, but you can read an introduction to multivariate testing using Google Website Optimizer to learn more about website testing. I believe multivariate testing is a critical component to increasing conversion and lowering bounce rate for your key landing pages. It can help you increase revenue without adding one more new visitor to your site. NEAT, isn’t it?

Please feel free to validate this with http://en.wikipedia.org/wiki/Bounce_Rate

As an SEM Specialist, I must understand the different algorithms search engines use in their work. I also need to have an understanding of how my client’s target audience searches these engines.

Analytical tools and their test results offer the most valuable information about visitors searching and browsing behavior. The resulting traffic changes and most frequent keyword phrases that appear in these web analytics reports are the Site Catalyst of any SEO campaign.

This helps one understand the information retrieval algorithms and heuristics process that takes place when search engines qualify a web page for a particular keyword phrase. That is why in order for a web page to be considered relevant, its content organization must accommodate a wide variety of direct and semi-direct search behavior, which is mostly disclosed by its own metrics, in a given time period.
Part of the important information web analysis provides is the amount of words and phrases people type into search queries to find a particular web page, and it is equally important to include this information in order to receive targeted search engine traffic. That is just one of the aspects in the existing relation between web analytics and SEO: understanding how visitors search and browse websites.

In a similar fashion, search engine generated traffic is reported by a web analytics tool, including the phrases entered into the search engine that were used to find a website. By separating the paid traffic generated by SEM from the total traffic that was referred by search engines, you can monitor the effectiveness of SEO efforts. Higher-end analytic tools break out organic search engines into a separate report.

Another area where this statistical data is used for SEO benefits is in copywriting. Understanding how to write for the target audience of a website is key. Finding the right terms to use semantically within the copy of a web page is one of the main components of all successful SEO efforts. A SEM should always consider what each web page communicates to site visitors and search engines. This content should not only help achieve top search engine rankings, but it should also encourage searchers to visit the website.

To improve positioning on search engine results pages, you need to be able to measure effectiveness. These tools make measuring your improvement on search engines easy, but it is really important to know is if the improvement affects traffic and sales. By monitoring and tracking this information frequently, a SEO can make recommendations, prove these recommendations work, and accurately report on the true effectiveness of these changes. Web analytic helps shorten the gap between what you think your visitors are searching for, and what they actually are.

Onset of social networking or community sites has pushed affiliate marketing a few steps ahead. These community sites possess great potential to drive all that an affiliate marketing needs – the traffic. These social community sites contain enormous wealth of resources to make an affiliate or the merchant really wealthy. Unfortunately, though most of the affiliates or merchants are aware of existence of these social networking websites, only a few of them can actually utilize pool of resources available at these sites in their favor.

Such social networking sites are commonly known as Web 2.0 sites. In simple terms, these networking sites point to vast network of people that allows members to be fragmented in several communities or groups based on shared interests, regions or several other factors. Members create forums, discussion boards, write blogs and other literature to express their opinions on myriad topics. They also invite other people to join their ‘communities’ for active participation, viewing or sharing some files. Therefore, an affiliate or merchant can easily drive a sheer group of people towards their site for registering or purchasing goods.

Since the best thing about affiliate marketing is generation of instant income at no or minimal investment (refundable when registration fee required), people do not think twice to try their luck through affiliate marketing and earning income from home. To join a network of affiliate marketing, all they need to do is to furnish some related and essential details and paste links of merchants’ site at affiliates’ web presence (either at their website or a single web page, whatever it can be). Some merchants’ sites also cater to their affiliates with site designing services if the affiliate does not own a website or a web page.

Using a social networking site you can drastically escalate your rate of success in affiliate marketing and digits of income. Moreover, most of these networking sites enable share or upload files in various formats ranging from images, audio to even videos. Demonstrating products and services you intend to promote through affiliate marketing is an easy task through sharing such files at these networking sites. Some community sites contain ‘Testimonial’ areas wherein you can ask your peers to write or essay benefits of using your products. These pool of contents can endow your affiliate business with positive recommendations or referrals to intrigue your customers make purchase and slip in thick percentage of commissions to your pocket.

To be successful, ecommerce sites require information about site visitors.

What sites are the top referrers? Which search engine produces the most traffic? How long do visitors remain on-site, what is their pathway through the site, and what pages do they exit from?

One method of collecting this information is often referred to as using 3rd party cookies. If you use 3rd party cookies, are you aware of the privacy concerns, and will you be liable for a privacy policy breach?

What’s A “Cookie” Anyway?

A cookie is a message given to a Web browser by a Web server. The browser stores the message in a text file called cookie.txt. The message is then sent back to the server each time the browser requests a page from the server.

Information gained with cookies helps the Web server track such things as user preferences and data that the user may submit while browsing the site. For example, a cookie may include information about the purchases that the user makes (if the Web site is an ecommerce site), or the cookie may “remember” the user’s contact information so the user will not have to re-key it on future site visits.

1st Party and 3rd Party Cookies Distinguished

There is an important difference between 1st party and 3rd party cookies. If you use 1st party cookies, they are passed to a visitor by your site, and the data generated remains with your site. On the other hand, if you hire an independent company (such as Google with its Google Analytics program) to pass the cookie, that cookie is called a 3rd party cookie.

Privacy Concerns With 3rd Party Cookies

Privacy concerns arise from the fact that the data generated with 3rd party cookies resides on the servers of the 3rd party — not your server. The fact that you do not control these 3rd party sites and their use of this data has raised concerns among many users. For example, users have questioned whether these 3rd party sites aggregate the data among many sites and report ecommerce trends to the media, or whether the 3rd party sites use the data for purposes of cross-website profiling and ad targeting.

And what is your legal obligation to disclose the use of 3rd party cookies? In the European Union, it’s illegal to pass cookies without informing users that you do, what they’re used for, and how they can be avoided, and it’s generally believed that the failure to adequately disclose the details of the use of 3rd party cookies is a violation of EU law.

In the US, there is an evolving debate regarding the same issues, and the answers are less certain.

Conclusion

It’s recommended that if you use 3rd party cookies, you clearly disclose in your privacy policy the distinction between 3rd and 1st party cookies, and how they’re used and avoided.

Be careful, however, in amending your Privacy Policy because amendments may not be effective retroactively for data collected with 3rd party cookies prior to the amendment.