At the time Google purchased the software Urchin, it treated (and counted) bounces as 0-duration visits. When calculating the average duration, this meant that it came up with a number that was under the real one. How inaccurate this was depended on the percentage of a site's arrivals who bounced.
In July 2007, Google changed the calculation of average duration so that it did not include bounces anymore. This was the correct thing to do and meant that its figures for average duration were now accurate. A month later, Google put it back to the old (wrong) way of calculation. In other words, Google intentionally rolled Google Analytics back so that it produced an incorrect average duration. Why? Brett Crosby, senior manager at Google Analytics, explained in a Google blog that it was because people complained the change meant the new (accurate) numbers were out of line with the old (inaccurate) ones. (That blog has since been removed by Google, but you can find it copied on many sites.) In other words, these people considered consistency more important than accuracy, and Google obliged them.
It's been that way ever since -- Google is intentionally and knowingly providing inaccurate numbers because a few people preferred neatness to truth.
Areas of errorTreating bounces as visits doesn't just affect the accuracy of average duration -- it affects any metric based on the number of visits.
- Visit count
When you see a figure in your Google Analytic reports for Total Visits, ask yourself: What do you think that represents? If you see Total Visits as the number of people who entered your site, who reacted to the sales pitch, who engaged with your content, who potentially could have bought products, then you are wrong. It is the number of people who arrived at the front door of the site, nothing more.
- Conversion rate
The Conversion Rate tells me how successful my site is at selling. It is legitimate to calculate Conversion Rate including bounces, but my personal experience is that it is misleading to do so. I use Conversion Rate to improve my site's sales pitch. People who bounce were never exposed to it, so including them in the calculation means I cannot possibly know whether my sales pitch is working or not.
- Exit rate
Google Analytics tells me how many people exited the site from any given page. Like Conversion Rate, this is useful for assessing the sales performance of the page. However, getting someone to enter the site and getting them to stay in it once they have entered are two very different tasks. They have different factors and processes involved, and they have to be measured and improved separately. You can't assess the ability of a page to hold someone in the site and the ability of that page to engage a new arrival in the same number. Including bounces in the Exit Rate makes the Exit Rate metric useless.
- AdWords
It is important to bear in mind that this error does not affect the assessment of key metrics for AdWords traffic. You pay for people to come to the site, whether they bounce or not, so cost-per-visitor and ROI for AdWords is not affected.
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