Google Enters the Wild World of Web Traffic

So, it's not enough that Google (GOOG) has AdSense and DoubleClick. Yesterday, the search giant announced its Trends for Websites service. One might think hurrah! Google has turned its algorithmic prowess toward fixing the messy estimates of site traffic provided by Comscore (SCOR), Nielsen, Compete, and so many others. Not so fast.

Google's new service looks to be yet another bit of information to confuse naive media buyers who purchase ads based on a site's relative ranking. But that's a good thing. Really.

Once you understand that all traffic measurement techniques come up short, then as a site owner selling ads or a company buying those ads, you want more data from more sources on traffic. For instance, Alexa's measurement technique is often thought to weigh Asian users more heavily than U.S. users. Measurement that depends on cookies, or on installed toolbars, or on ISP data will also skew differently. And firms use different methods to account for users who disable cookies, who might log in from multiple computers, or who may use a virtual desktop and be recorded as a single IP address. (Read Heather Havenstein for a round-up of reaction, analysis, and the nugget that Google omits its own sites from being measured.)

Just last week I had checked in with two of the smartest people I know on this matter. Both argued that triangulating between different firms' rankings was a good thing and that because ad rates are negotiated on the basis of actual ads served, faulty rankings by say Comscore or Nielsen are not harming anyone's profitability. Though a mess, what's really at stake are bragging rights. For more on this, Fred Wilson offers a thoughtful discourse on the value of triangulating between multiple  measurement firms.

So, take Google's entrance into the wild west of web traffic with a grain of salt. It is a good thing, but not for the reasons you'd expect.