I call it “Return on Visitor (ROV)”.

It is not a popular term in this industry but very common in my studio.

ROV is used to measure the value of each website visitor. I use the no. of “Effective Visit” as the benchmark of the traffic.

Effective Visit = Total Unique Visitors x Bounce Rate

Bounce rate is a term used in web site traffic analysis. It essentially represents the percentage of initial visitors to a site who “bounce” away to a different site, rather than continue on to other pages within the same site.

Higher the bounce rate, less welcome content of the website is OR the website cannot attract the targeted visitors effectively.

Supposed my site has 10,000 unique visitors. Bounce rate is 50%. Then effective visit is 5,000.

Supposed the website generates around US$5,000 revenue from the effective visit above. So we can see the ROV is “1″ - Each visitor generates US$1 per visit.

This ROV is the most critical number to measure the value of the website operation model.

1. Supposed you know the “cost” per visit (ROC), then ROV - ROC = Net value per visit. OK..you know your website model is profitable or not.

2. Supposed I’m going to use “Adwords” to promote my website/products. I know my site ROV is US$1. The ROV of Adwords is US$1.5. Then I know it is not a good business decision to pay Adwords for advertising.

ROV is a core parameter which we optimize our website operation model including content, traffic and revenue.

If you are not comfortable with such numbers, I suggest you stop doing any business.

Tags: bounce rate, effective visit, return on visitor, ROV, targeted visitors, website valuation