Measure what is relevant: A critical look at bounce rates
briancray.com
briancray.com
If your company blog gets picked up on Reddit or CNN, your bounce rate just went through the roof.
If your ongoing SEO triples the number of visitors you get from Google every month and double revenues, you probably now rank for at least a few phrases which you are not a good fit for, causing bounces
If you make changes to your site's design which clearly suggest to people that this is not the Facebook login they are looking for, your bounce rate will increase as your blood pressure decreases.
All of the above suggests ditching bounce rates and concentrating on metrics which actually matter to the business. Conversions and revenues are two excellent choices -- most of the scenarios where one says "Our revenues are up by 100%... DANG IT ALL" are fairly contrived. The only reason bounce rate persists is because it is very easy to measure without getting buy-in from anyone else in the organization -- sort of like hits.
I think we've successfully embarrassed anyone who would quote hits as a meaningful metric out of the industry. Bounce rate should probably be next. (Full disclosure: at least one guy who knows what he is doing about metrics -- Avinash Kaushik -- disagrees with me violently on this one.)
Far more useful metrics would be engagement among the people who have proven to be the core audience, likelyhood to recommend the product to others, time-to-first-satisfactory-outcome, feature use frequency. I am contemplating a diabolical plan of turning features off and measuring the relative frustration rates.
In Kaushik's book, Web Analytics an Hour a Day, he defines bounce rate as "The percent of traffic that stayed on your website for fewer than 10 seconds." So that's probably why he's so keen on bounce rate, using his definition you avoid some of the issues listed in that article.
I don't think the 10 second rule minimizes all other points in the article.