Is there any use in reducing organic bounce rate if they are going to leave anyway?
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Is bounce rate itself an important factor? For example if my page which shows pricing for a service ranks high, people usually come to that page, then go to the contact page to see where I am. Most of them then realise I'm not close enough and exit. Now, I could give these people that info on the pricing page but that would drive my bounce rate up. Does it make a difference from Google POV?
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Start using the DFP ad server and target the ads geographically.
When someone in your service area lands on the page, do not show the ads or show a house ad.
When someone outside of your service area arrives, then show them the ads. Adsense will target by contextual relevance, geographic area, behavior, remarketing, etc to give those people valuable ads.
Sell that ad space by geographic area to people in your industry who serve other areas.
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Hi Ali. So from Google's perspective, they're measuring bounce rate in relation to how long someone goes from their results to a site, then back to your results. There was a nice discussion around this in Rand's whiteboard Friday a couple years back: http://moz.com/blog/solving-the-pogo-stick-problem-whiteboard-friday and then more recently in the Q & A here: http://moz.com/community/q/pogo-stick-or-not.
Regardless of how many pages someone looks at on your site, if they're doing so VERY quickly and very consistently returning to the search engine and looking for other results, that's a Pogo stick problem to worry about. If your page offers relevant information to the point that you're seeking out your location, at least your matching the searchers intent well up to that point. Cheers!
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