I didn't write this, but i felt it was spot on and logical and I wanted to post if for you. If you're trying to make sense of the digital analytics landscape, this helps quite a bit!
The first is user-focused and based on software installed on user machines. Services like Alexa and Compete get users to install software on their computers and then track surfing habits to come up with best guesses on Internet-wide traffic. It works in theory, but getting enough users to get statistically relevant results has proven challenging. Alexa is famously flawed, and while Compete seems to be somewhat better, it only tracks U.S. users. Comscore is another user-focused metrics company that tends to work well for large sites, not well at all for newcomers (and it is very expensive to access their database).
A second way to determine site usage is to track traffic directly from websites. Quantcast combines user surveys with direct tracking on websites (when they can get it) to estimate traffic. Comscore also does this with certain sites.
The third way is to track surfing behaviors via records from ISPs. Hitwise uses this method to provide web analytics to clients.
Read more here!!