Ha. This blog title is a loaded question.
Which is better for SEO? Absolute Unique Visitors, New or Returning Visitors?
Simply put different web sites have different needs and different visitors do different things. A client rang with the "Which is better?" question within minutes of Google posting a useful walk-through on their Analytics Blog. I recommend this Google blog above many others. You will find countless SEO blogs but this is the only analytics blog.
The client in question is the marketing manager for a content site with a subscription model. You get a teaser of an article for free and if you want to read the whole thing then you need to subscribe to the site.
Absolute Unique Visitors are important to them because they represent people finding the site. This is their search traffic as well as links from elsewhere - blog citations, Google Desktop alerts, forum links, social search links or even direct traffic. Each absolute unique visitor is someone who could become a subscriber. If comparison date range is large enough then absolute unique visitors are highly unlikely to already be a subscriber.
That can't be said for New or Returning visits. A New Visitor could well be someone who has discovered the site before. A "New Visit" can come from an "Prior Visitor". The Google Analytics GUI talks about "Visitor Type" (as shown on the right of the screen shot below) but really we're talking about visits rather than visitors.
New and Returning visitors are still important for our content client though. Why? These are the people more likely to link to the teaser/free content on the site. That's easy to imagine how that works in the blogosphere. If you have a reader who returns to your site again and again then your chances of appearing in their blog list is much higher. Someone may be an avid reader of your site via RSS but if they're reading your work from a distance then they're less likely to reference you directly. The RSS reader is passive. Someone on your site is active. If someone is on your site then they're exposed to the "Blog This" button and your other social search lures.
Had I had a financial services client ask me the same question then we would have a slightly different scenario. If you're a bank, for example, then it simply does not matter how often someone applies for a credit card or a mortgage. They'll do it once and you will either approve or reject them. Once rejected it really does not matter how often they come back to your site (unless their financial situation changes). Web users rarely link to finance content. How many people actually blog about Barclays' great personal banking? One person. Me. I did it just now and no one is likely to do it again for a while! (Splogs being the exception). We can't really say that someone returning to a financial service provider again and again are any more likely to link to the site than someone who has just discovered it.
In fact, it could be argued that the people (the absolute unique visitors) who have just discovered a financial service site are the people most likely to link to it via a "Hey, I've just discovered..." post.
If we go back to the credit card example, the rejected returning visitor is not worth much but a brand spanking new visitor is. The absolute unique visitor is the visitor who represents the best chance of a lead and conversion.
We could end it there but I think it is worth while pointing out how brand skews all of this. In terms of search promotion and ROI that returning user may not be important to the bank. In terms of brand strength then that returning user is. A rule of thumb is that is the returning visits which offer the best reflection of brand strength. These are the people who liked what they saw the first time around to come back. That's always good for brand.