Bounce Rate = Number of visitors who enter a web site at a specific page and go no further divided by the total number of visitors to that page. Bounce Rate is a measure of the ability of an individual page of a web site to retain the interest of arriving visitors.Visitors who leave after arriving at a page - bounce to another site, go back to where they were before arrival or close their browser. (Can also occur by default if a visitor leaves the web page open and the web server closes the session when it times out). A high bounce rate signifies a page where a high portion of visitors leave without clicking through to other pages on the same web site.

Significance of Bounce Rates

Bounce rates have different significance depending on the type of site. A commerce site with a high bounce rate represents a financial problem since it is loosing visitors who have potential to purchase items on the site.News sites may have achieved their purpose and yet still display high bounce rates since visitors may arrive simply to scan the headlines and then leave. Home page bounce rates are important measures of a web site’s ability to retain visitor attention. Bounce rates on pages that are opened as a result of click throughs from paid adverts such as Google AdWords are important measures of the success factors of an online ad campaign.

References: http://www.google.com/adwords/learningcenter/text/38069.html 2) http://en.wikipedia.org/wiki/Bounce_Rate