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Do not trust your web analytics

There are benefits to panels. Unlike server logs, which measure individual users by the number of times an unrecognized Internet protocol address visits a site, panels can tell companies more about the audience’s demographic composition. This is possible as panel members share such information as age, gender, and income level. Unlike using IP addresses, panels can also help distinguish between visits by different computers, which may have the same user, and visits by actually different people.

This BusinessWeek article does well to explain, without much tech jargon, the different approaches to measuring web traffic.  So, what can you do if you need to monitor site traffic?  Use a mix of measurement strategies, if you can combine log file analysis with a tag-based approach, like google analytics.  Look at overall trends, at a monthly time scale.  Finally, identify ways people can participate on your site and start measuring those actions, whether its number of comments posted on a blog, number of registered users, number of contributing users, and so on.