What is Bounce rate ?

Hello people. Hope you are having a gala time with your life.

Ok, so today I am going to post about a concept called "Bounce". It is one of the terms which is used to gauge/compute the performance of the websites and online campaigns. To be more precise it is used to find the quality of traffic coming to the sites, be it directly or through any campaigns.

I will explain the concept with an example of a website(lets call it VASTRA :) ) doing a campaign on our favorite social media website, Facebook.

Ok, so vastra is a reputed(assume) online apparel store, and It has a very good collection.

The management over there has discovered that one of the major reasons people come to the online retail stores is for value (cheaper price). They ask one of the marketing guys, Raj (Naam to suna hi hoga), to design and execute a campaign around the discovery.

He creates a digital campaign and runs it on Facebook - Beautiful printed t-shirts for 199 only. Hurry up!

But, my friend, there ain't any free lunches. Running a campaign on Facebook costs money, it is an expense, an investment.

So, when any company makes an Investment, what is the prime reason for it? Yep, you got it, Its Return on Investment - ROI.

And, how will we calculate the ROI of the campaign? common sense , Revenue post campaign - revenue before campaign - cost of the Ad.

But, Raj thinks he is a very smart marketing guy. He says that when people will click on the ad link, they will be directed to the collection, But since he so smart, the collection will not be of only 199 bucks shirts, it will be a mixed collection. If someone is ready to spend 199 bucks, then they can be converted for a 300 bucks better product, Simpoll!

The company will make more profit, and "I will get a promotion". I believe I can fly..

So, they run this campaign on facebook.

They find that after running the campaign, the traffic on the website has increased. Wow!

But, what drives the business for an online apparel store? yes- Sales.

So, traffic has increased, the sales should also increase. The more the people come to my shop, the more they buy!

But, but, but, after running the campaign for two weeks, that is investing in it for two weeks, Raj finds that though the traffic has increased, the sales have followed the usual trend, that is not a commensurate increase.
What can be the issue? Yeah, he gets it. The problem is with the collection. If so many people are coming and going, there has to be problem with the collection only.

Raj being a wise man reports (complains) this to the top management. And demands that the company should probe the quality and creativity of the collection.

The company lauds Raj and they restructure the collection.

Now, after the restructure the management summons Raj and politely asks him to launch the cheap, i mean value, campaign again.

Raj does the same thing again.

The traffic increases again.

Raj gets happy again.

But, yes you got it- traffics increasing sales ..lol

So, what can be the reason? So, traffic has increased, the sales should also increase. The more the people come to my shop, the more they buy!

Raj gets it this time- the culprit is facebook! they are creating artificial clicks and visits to the site! And minting money per click.

Raj runs towards the top management and reports the unscrupulous, unethical, unfathomable sin committed by the social media website.

But, what does Raj think? is the top management a fool?

They request Raj to hold his horses and call a web analytic professional.

So, I went to Vastra :)

They tell me the whole story. I decide to have a word with Raj.

I ask Raj what were the metrics he used for the campaign? Raj is flummoxed, metrics?

I ask Raj what were the Performance indicators he used? Raj is even more flummoxed, performance indicators?

He was petrified when i told him the way he has calculated the ROI of the campaign is also flawed!

And I got the whole picture. Now, the onus was on me to save Raj's job. now, where is my cape?

See, if we look at the big picture, then the ultimate goal of any business house is to generate profits. Sweet, increasing, consistent profit.

Thus, the goal of this campaign is also to generate profits, to put it in another way is that goal of the campaign is to generate profits through sales, yet another way to put it is that the goal of the campaign is to generate profits through sales by attracting the prospects to the website.

So, Raj should have used the metrics that indicate the performance of all the major aspects - traffic->sales->profit

But, Raj was trying to solve the puzzle with incomplete jigsaw puzzles.

When we report the traffic - the number of visits can't be only criteria. We have to find the quality of the visits. Now, What is a quality visit?

A quality visit is the one which has chances of getting converted to a sale.

And, one of the parameters to evaluate the quality of traffic is the Bounce rate.

A Bounce is an event when the visitor after coming to the website, leaves it without any activity, not even a click. That is they come, they see, they go, that's it! Here bounce is one of the metric Raj should have considered.

A Bounce rate is simply indicator of the bounce, it is given by - (Total Number of bounces)/(Total visits)
                                            

Now, here if Raj would have looked at the bounce rate of the campaign, he would have instantly figured it out that the campaign is not generating quality traffic and he needs to make changes into it.

In Raj's case, the problem is not even with the creative of the campaign, the problem was Raj's decision to alter/modify the delivery of the promise made by the communication.

If you remember, the promise of the campaign was cheap shirts. And what was the delivery? A mixed lot, which was not even properly categorized for the visitor.

Result- the online shopper considers it a sales gambit and leaves the site without any activity.

Now, even though Raj is right in figuring out that the traffic has increased, he is wrong in blaming the collection because had the visitors even browsed the collection, then that would not have been a bounce, they did some activity.

The other loss is that Raj could not capitalize on the insight given by the company- an opportunity missed!

So, the company lost money TWICE on the campaign, they nudged the innocent collection guy, they lost the opportunity of the sales and profit.

So, my friends always try to break a problem into sub parts and try to connect the dots, rather than jumping to conclusions.

The best part about online business is that all the tools are available to gauge the performance of your actions and even if they are not there, it is not difficult to create one!

And, the above example is a real life scenario which I observed through ads flashing on my wall. Yeah, yeah! I wanted to buy a 199 bucks printed shirt! 

This is the pic of the ad the flashed on my wall-

And this is what it lead me to -

I hope you got my point

But, how will we calculate ROI of the campaign. Well, that requires the explanation and exemplification of tracking codes and segmentation. Which I will cover some other day :)

I hope the above example was successful in explaining you the concept of the bounce. Even if its not clear than don't hesitate to ask.

I would love to read your feedback. Positive, negative anything.

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Take care :)