VentureBeat

Services that compare website traffic are important to the industry because they provide context for how a site is faring. However, many sites claim these measurement services have incorrect data for them (here’s some sample criticism), and that’s not helped by the fact that all of the services seem to have different data.

You likely know the big players: Alexa and Compete. Then there are the premium services: Hitwise and comScore.

Now a new cowboy is riding into town — and he’s arguably the best gunslinger in the Wild West: Google.

Google has launched a new feature for its Trends service that lets you compare websites, according to Search Engine Land. You can now get a graphical representation of how a site is doing in terms of unique visitors versus other sites.

Google’s service gathers its numbers a bit differently than other traffic comparison sites. It looks at the search volume for a site, anonymous Google Analytics statistics and “other third-party market research,” which again, seems a bit vague for a site trying to put out credible data.

The service offers other information as well. It will show the popular regions for particular domains, which other sites people have visited and what search terms people have used in order to get to that site.

It will take a bit of time and some testing to know just how accurate Google’s entry into the site- comparison world is, but Google usually has good data, and this field really needs a clear authority.

Below you can see a chart comparing Facebook and MySpace. You’ll notice that Facebook passed MySpace sometime in late 2007 according to Google Trends.

Taylor Nelson Sofres, the world’s third largest market research company according to one measure, has acquired Compete, a company that tries to measure the traffic and types of people that visit certain web sites, for $75m (£37.8m).

TNS, based in London, apparently made the statement as it announced revenue growth today.

What’s eye-opening is the relatively low purchase price, considering how important traffic analysis technology has become these days and because venture capitalists had pumped $43 million into the company over the past eight years. For money to be tied up that long, investors typically expect to get a better return. Charles River Ventures, Idealab, Split Rock Partners and William Blair Capital Partners were backers of the company. However, if Compete meets certain revenue targets, it could bring up to an additional $75 million between 2008 and 2010, according to the deal.

Compete analyzes the internet clickstream data of almost two million people, weighted to match the US online population. That information is used to measure how visitors click on a company’s Web site, and for paying customers, Compete would also measure more details about how people engaged with the client’s web site.

However, Compete has never really been a reliable source of information, and has been overshadowed by stronger players such as Comscore, or newcomers like Quantcast, which have placed a tracker directly on Web sites to measure traffic — something that Compete always shied away from, inexplicably citing the fact that Netratings hold the patent for such technology (it hasn’t slowed down Quantcast).

Compete lost $4.5 million on about $15 million in revenue last year.

TNS said it will integrate Compete’s information into its own offering, beginning in the U.S., where TNS has its own research panel of of more than one million people.

Update: Tech Confidential says the sales price isn’t bad, based on a number of comparable deals.

It sucks when your Web site’s traffic isn’t being measured correctly.

It also sucks when you’re trying to measure the significance of someone else’s site, and are getting conflicting signals.

Here’s what we’ve learned over the past few days, after our initial piece on the problems of Alexa, Quantcast and Compete, all sites that independently verify how much traffic a site is getting.

We’ve learned that if a measuring company doesn’t have a tracking pixel directly on the Web site it is tracking, the numbers are extremely unreliable.

This may be nothing new for insiders, but the public data provided by Alexa, Quantcast and Compete can be misleading for the rest of us, because they purport to be accurate. In fact, that data is almost all collected from the surfing patterns of a very small sample of people. Those people are not going to be surfing certain niche sites as much as the general population.

Take the example of Streetfire, a very popular video site for car enthusiasts. Until our initial post, co-founder Adam Bruce was somewhat content with Google analytics, which showed his site had three million unique visitors a month (he let us login to his Google account to confirm). This matched information of his server logs, which Google also manages, and it was compatible with the ad server tracker from Adjuggler. Of course, this was all internal information.

Outsiders had access to Alexa (see its Streetfire rankings), a free site measuring tool, but Bruce believes most people recognize Alexa’s shortcomings, so he isn’t taking Alexa too seriously. Then along came two more sites, Quantcast and Compete, saying they can do a better job than Alexa. After we pointed to them in our post, Bruce checked them, but he found they were both showing his traffic at about an eighth to a twelfth of his internal numbes. Alarmed, and filled with renewed doubt about the reliability of his internal numbers (because server logs can be unreliable too, as can Google Analytics), he called up Compete and Quantcast to find out more.

Notably, both companies cooperated. Quantcast responded by offering him a tracking pixel, to be put directly on his site. This opened Quantcast’s eyes: It saw Streetfire’s traffic was indeed much higher than it had estimated, and told Bruce it will readjust its numbers after a full month’s reading. Compete, however said it couldn’t deliver a tracking pixel — in part, it said, because Nielsen/Netratings owned patents on this sort of thing, and that Quantcast can get away with it because it is too small to sue. (Although, we’re not certain whether Netratings really does have a patent on this).

To be fair, Compete does have impressive data: It says it gets data from the surfing habits of two million people, which is more than comScore, Hitwise, Nielsen and Alexa. It takes extensive measures to ensure data is diverse — gathering it from multiple Internet and application service providers, panels and its own toolbar — all this is more than can be said for the others. Compete has an impressive list of testimonials, but read through the list — most of those people aren’t experts, and even if they are, our hunch is that they wrote positively about Compete, just like we did initially, because it looked so much better than what Alexa was offering.

All these strengths of Compete, however, serve to underscore our point. If it really has such a industry-leading sampling, why did it go so horribly wrong with Streetfire? We called up Compete, and asked. We talked with product manager Jay Meattle, and Stephen DiMarco, who is in charge of “emerging markets.” They said they went back to their panel sampling and studied why a video site like Streetfire would be undercounted. Their analysis found video-oriented sites like Streetfire were being undercounted by a factor of four. Adjusting their numbers, that put Streetfire’s monthly uniques back up to 1 million or so, but not at the 3 million the other trackers were showing. In other words, it is still undercounting — and it came only after Streetfire requested a revision.

This is particularly worrying because Streetfire is a major site. If a car enthusiast site of 3 million uniques is being undercounted by the biggest objective panel out there, then well, the rest of us little chickens are hosed. The Compete guys told us they are more interested in serving general consumer sites (their main customers), and don’t really care about niche sites like say, VentureBeat ;). “Our clients are big consumer marketers,” they said. Fair enough. They take Streetfire seriously, they said, because it is a big site. But that also leaves us with this hunch: Most consumer sites are overcounted by Compete. Both may have an interest in that being the case.

Meanwhile, Adam Bruce, of Streetfire, is relieved because Quantcast’s tracker, at least, vindicated him. He can still trust his internal numbers. Bruce’s conclusion: Quantcast offers the best of both worlds. It offers you all the third-party data it can get (see screenshot at bottom; it shows gender, geographic and other data that Bruce says coincides with his sense of his readers), but if you ask it to, it will put a tracker on your site, to verify. Now, not all sites will allow Quantcast do to this. But its livelihood is on the line, like Streetfire’s small team’s is, it makes sense.

Conclusion: When you go to Quantcast for data on a site, be sure it has a tracking pixel on the site before drawing conclusions.

Finally, a note on Site Meter. Bruce said that company’s stats make sense since they are in line with his other sources, though Site Meter doesn’t report unique visitors, just visits.

Ever wonder how much traffic a Web site is getting?

We’ve already talked about how tough it is to get accurate stats. Alexa, the favorite of many people because it offers lots of easy-to-get free data, is flawed. And new competitors, such as Compete and Quantcast, which claim to offer something better, also have drawbacks.

Traffick has a good summary of the providers, but still leaves you banging your head against the wall in frustration that there’s no easy, reliable way to do this:

Based on the evidence I’ve sifted through, there’s not a shred to suggest that Compete.com is better [than Alexa.com] at this stage, and some to suggest it’s actually worse. That shouldn’t be surprising. Going strictly on toolbar installs, the upstart service is bound to have less data, and less representative data. They try to augment that with “ISP relationships,” I gather, a practice which is quite old and generally not well explained. (Are Hitwise’s ISP relationships better than Compete’s? Are Wordtracker’s better than KeyWord Discovery’s? Does anyone do anything transparently in this industry?)

The CEO of Quantcast, Konrad Feldman, was good enough to talk to me a couple of months ago. I’m still uncertain about where the service is headed, given its newness. Essentially they attempt to combine various data sources to arrive at more accurate rankings, including demographic information for a site. To aid this, sites are encouraged to download some javascript code. Interesting, but no different from the scores of competing analytics services hoping to do the same. Who can get every site or even a lot of sites to install that code?