Bounce Rate and Search Engine Optimisation
Bounce Rates may, to some degree, contribute towards web ranking. Google's business model is all about providing useful results to people conducting searches. If it failed to do so then after a while we'd probably consider using another search engine - a very easy switch to make - resulting in lower click through rates to Adwords postings. Google clearly therefore have to ensure that their search results remain useful to people conducting searches.
A well written and useful site is highly likely to be characterised by a lower bounce rate. Whilst this is not always the case - (e.g. some sites providing information to people that answers a question or that caters for a need all on one page) - in general higher bounce rates often indicate a problem. Bounce rates therefore could be pretty useful at gauging real world users reaction to pages they view within Google's results. Google don't of course publish the algorithm they use to rank sites but it seems likely that bounce rate may play a role - although other factors such as average time on page could be used as an alternate performance metric.
Bounce Rates Overview
Regardless of the relevance to SEO, bounce rates remain one of the most important metrics to track on your site.
You can use the Google Analytics benchmarking service to compare the bounce rate of your site to other similar sized websites within similar sectors.
If your site has a higher bounce rate use reports within Google Analytics to try to identify the cause. It may be that you have pages that are poorly designed / written that people are landing on or that you have a marketing campaign driving largely innapropriate traffic to a particular page.
Bounce rate may play a role within search engine result rankings. Even if it doesn't a high bounce rate is generally an indicator that something is wrong and needs attention!
Google Video discussing Bounce Rate
