VentureBeat

Quantcast, the company that places a piece of code on Web sites so that it can track traffic and other data directly, has raised $20 million more in financing.

The round was led by the Founders Fund and included Polaris Venture Partners. It follows $6 million in previous funding from Founders Fund, Revolution Ventures, Allen & Co., and the company’s founders.

Some 20,000 publishers have already agreed to place Quantcast’s code on their sites, which allows them to get more accurate information about the types of people that use their site. Quantcast supplies the service for free.

San Francisco’s Quantcast still hasn’t disclosed how it plans to make money, but chief executive Konrad Feldman suggested that one way may be to license the data it gets to advertising networks, so that advertisers can make better decisions about where best to advertise.

No other measurement companies has such an offering. There are sites like Comscore, which draw data from the surfing habits of large “panels” of Internet users. But few offer a code that tracks traffic directly from a site and then makes it publicly available. Sites with an interest in secrecy have avoided using Quantcast’s code. However, even here, Quantcast has moved to allow sites some flexibility in what is made public. (See our coverage of the significant methodology problems of industry leader Comscore and others).

Quantcast is also tracking widget traffic. Widgets have confused advertisers because widgets distribute content across multiple sites, and it’s difficult to know whether visitors to a site are actually reading the widget information. For example, if VentureBeat supplied a widget of news stories to the homepage of Dogster.com, few visitors to Dogster would likely stop to read VentureBeat’s news because it isn’t relevant to their passion (dogs), even though the widget would be registering plenty of traffic by counting all visitors to Dogster.com’s home page. Quantcast’s traffic tools help by measuring user interaction with the widget (see our coverage).

Quantcast combines its traffic with various panel data, to build audience profiles for Web sites. See the profile for CBSNews.com, for example (partial screenshot below).

Ken Howery of Founders Fund and Mike Hirshland of Polaris Venture Partners will join Quantcast’s board.

Slide, Rockyou and HotorNot, three companies with the largest number of users on Facebook, are showing continued traffic growth on their own sites.

The finding, reported by Quantcast, a service that tracks traffic trends for Web sites, suggests that sites failing to embrace Facebook may be missing out on potential growth.

For some, this is also encouraging evidence that Facebook’s platform, launched in May, isn’t necessarily weening users entirely off their own Web sites. While Facebook allows third-party sites to advertise on their applications on Facebook, many sites prefer to maintain control over their users’ experience, and are hesitant to trust Facebook’s promise that it will remain hands-off. Despite the pledge by Facebook’s executives that sites are free to make money on their apps within Facebook, its terms of service says Facebook can change its policy at any time.

Slide, Rockyou and HotorNot have their own Web sites, and have also launched multiple Facebook applications. Some boast millions of users, foremost among them Slide’s Top Friends, which is the most popular Facebook application, nearing ten million users on Facebook. Top Friends lets you display your favorite Facebook friends in a box on your Facebook profile.

These graphs show the rate of growth that each company experienced to its .com site since . We’ve been hearing the same thing from developers of other successful Facebook applications who also have freestanding sites. Example: a Facebook application for anonymous gossip, Socialmoth has been driving traffic to its previously launched Socialmoth.com.

However, Slide also tells us that they’ve been seeing double-digit growth to Slide.com for months — that site whent from 117 million unique viewers in April to 129 million in May; Facebook’s platform didn’t launch until late May. Also, HotorNot.com has been undergoing some major changes over the past couple of months.

Each of these companies make money by running ads on their freestanding sites. They are also already experimenting with new ways to monetize both in and out of Facebook.

RockYou, for example, has been running ads in Facebook, within its casual gaming application “Games.” Slide, meanwhile is working on big plans to use the data it collects about what its users like in order to develop better tools for predicting other things they will like.

Then again, some sites don’t seem to care. iLike is another company with both leading Facebook apps and a quality, free-standing site. Its chief executive, Ali Partovi, says he doesn’t seek to drive traffic to iLike.com from Facebook. That’s because ads in Facebook may in fact be more targeted and thus more lucrative. Facebook pages include basic personal information on people, such as age, location, gender. To this end, iLike has made changes to its free-standing site that it knows will slow growth in order to boost growth on Facebook.

This data also justifies these companies’ land-grab approach to Facebook. Each has been launching as many apps as possible, cross-selling their users internally between their own applications to drive up overall growth, and buying other applications or hiring those applications’ developers into their companies.

It also may add more fuel to the fire driving many developers to build applications within Facebook. (For a more heart-on-sleeve explanation of how it makes developers feel, see this post.)

So what’s happening on other sites that these companies are pulling in users from, such as Myspace? RockYou’s traffic throughout all other social networks has been holding steady “in comparison to Facebook where it has been exploding,” company chief executive Lance Tokuda told us.

Where does this leave Facebook? Are these companies driving additional traffic to Facebook through their sites and their apps? Facebook tells us this is may be one of many factors. It is now at 32 million active users, and still doubling every six months — it attributes its recent growth not only to the platform launch, but becoming more of a hit with international audiences (London recently overtook Toronto as the city with the most Facebook users). It has also been introducing ways to more easily import contacts from other sites. For example, its AOL contact list importer, which was introduced only earlier this month.

Updated

More and more publishers and retailers rely on so-called “widgets,” little boxes placed on other web sites, to deliver their news, entertainment and product advertisements.

So measuring Web traffic to those widgets is important for deciding what content to deliver, and what sites to deliver it on. A number of companies now offer widget traffic measurement tools, with Quantcast being the latest.

Here’s a summary of some of the main players in this nascent but increasingly important field:

Quantcast – This relatively new San Francisco company monitors traffic to Internet sites. Today, it adds a video and widget measurement service, also free. It is still a test version and publishers include Slide, PictureTrail, RockYou, MetaCafe and MochiMedia. It reports on traffic to all Flash-based media, including online games and downloaded desktop widgets. The service reports a widget’s “reach,” the number of times a video has been “played” or that widget has been clicked on, and the categories chosen (a publisher can tag a widget or video as a “game” or “comedy,” for example). It will also report things such as which users clicked on the widget most often (frequency), and the demographics of these users, based on other information Quantcast collects. It provides this information in a pie chart. To use it, you have to register here www.quantcast.com/quantified-publisher.jsp, and more info is here www.quantcast.com/quantified-video.jsp. See chart below.

Clearspring – The company offers traffic analytics for publishers like Time, NBC, Universal and Maxim – which together now have more than 4.2 billion widget views. Last month, the company began letting developers write, distribute and tracking widgets through Clearspring. Like other offerings, it provides a dashboard, and tracks things like a widget’s source domain, number of visits and geography of visitor. Clearstone, like Quantcast, is hands-off on the widget creation process. You’ll need a third-party developer to build a widget if you want one built.

WidgetBox – This company provides a “wrapper” to widget developers so that they can track the widgets. Again, you’ll need to build the widget yourself.

Musestorm -– The company distributes widgets for both the Web and the desktop. Notably, though, this company goes a step further. Other companies put a “wrapper” around the widget and then track that widget. However, they can’t track activity of content within the widget. Musestorm lets you do that -– for example letting you know how many times a video within the widget has been played, and how users switch between surrounding audio and text. Quantcast, Widgetbox and Clearspring don’t offer that. Musestorm also lets you update widget content, adding and removing items, and so lets you track performance of variable kinds of content. Musestorm has a new release coming this summer containing other features.

Update: Comment below mention other providers, Comscore (see here) and Yourminis.

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?