I recently read an interesting article which compared YouTube (a popular video sharing site) traffic to Google. In it, YouTube was more popular than Google, at least according to web measurement firm Alexa.
And that struck a chord with me. I've dealt with Alexa before so I know it's shortcomings.
In this article we look at why Alexa data is flawed and how you need to be aware of that.
In case you don't already know, Alexa is an online measurement service owned by Amazon.
They collect their data on website usage through a toolbar which is installed by users. This toolbar watches what sites you visit.
It then sends the information back to Alexa for number crunching.
Alexa then aggregates all the information provided by all the toolbar users and then it extrapolates that data into what it considers an accurate view of website usage.
Now, this wouldn't be so bad if there were a representative portion of web users who have the toolbar installed. In other words, if there were a statistically accurate number of web users who were using the Alexa toolbar and surfing normally then I wouldn't have a problem with the data.
The problem becomes that there isn't an accurate user base.
When Alexa first began, it was very popular outside of North America, therefore most of its users were not from North America. This of course skewed the results you see quite dramatically.
Soon, regular users figured out that they could influence Alexa rankings merely by having their friends and family visit the same sites over and over.
And this is the core of the problem - that Alexa was so easily manipulated. Granted it is now harder to manipulate than before, but not impossible.
Should you use Alexa?
My feeling is that you can use Alexa, but you should not rely on just Alexa numbers. If you want to see how your site compares to others, fine take a look at Alexa, but don't be alarmed if the competitors appear to do better than you. Remember Alexa can be manipulated.
Instead I suggest you refer to a couple sources to get a more accurate read on how the competition (or industry) is doing.
In addition to Alexa, I'd suggest using another free online service called Compete to help round out your data. Compete collects data in a different way, allowing you to perhaps get a more rounded view of competition.
If you want to dig even deeper into your competition, check out a service called SpyFu. It can provide competitive information such as some of the terms your competitors may be bidding on, as well as some rankings and even other sites it competes with. If the site(s) you wanted to look at aren't in SpyFu, don't worry they will add them. And if you create an account it will tell you when they are added.
So while I don't think one should rely merely on Alexa for their competitive intelligence, I do think you can use it as one of many indicators of how well your site does in comparison to your competition.