Revisiting Return Rates

July 14th, 2014 by Josh

Starting today, we’ve updated our definition of return rate in both our Weekly Perspectives and in the Chartbeat Publishing dashboard. Consequently, you’re likely to see a shift in the numbers in your dashboard — so we wanted to write a quick note explaining the change, why we made it, and what you can expect to see.

Defining return rate

Return rate, if you’re not familiar with it, is a metric designed to capture the quality of traffic that typically comes from a referrer. It measures the fraction of visitors coming from a given referrer who return to a site later — if 1,000 people come to a site from, say, Facebook, should we expect 10 of them to come back or 500? Depending on the answer, we might interpret and respond to a spike from Facebook quite differently. While the intuition behind return rate is straightforward, the actual formula used to calculate it is a bit more up for grabs. Up until now, we’ve calculated return rates using the following formula: CodeCogsEqn (3) That formula roughly captures a notion of “how likely is it, for a given visit from Facebook, that that visit will be ‘converted’ into a return?”   As we’ve talked through that definition over the past year, we’ve come to realize that it’s more natural to phrase returns in terms of people, not visits — to ask “how likely is it, for a given visitor from Facebook, that that person will be ‘converted’ into a return?” Hence, we’re now using the following calculation: CodeCogsEqn (4) So, rather than speaking in units of “visits,” this definition speaks in units of “visitors” — a seemingly small (but significant) change. In addition, we’re now only counting a return if it’s at least an hour after the initial entrance, which corrects for a pattern we sometimes see where visitors enter a site and then re-enter a few minutes later.    

What's changing?

It’s likely that the return rate numbers in your dashboard and Weekly Perspectives will drop under this new definition. To help you sort out whether your numbers are trending up or down, we’ve gone back and recalculated reports using the new methodology, going back to the beginning of June. We hope that the transition to the new definition is painless, but if you have any questions, feel free to comment or get in touch with me at josh@chartbeat.com
  • JonoTRON

    Is there a page that lists the definitions for all metrics in the UI?