12 May 2008

Why Do Alexa Rankings Even Matter?

Google admitted somewhat recently that PageRank does not necessarily affect a page's search ranking. After all the hype about the importance of PageRank, and after Google adjusted their algorithm causing many highly ranked pages to drop down a notch or two, most of the gurus came out and told us PageRank doesn't matter... focus on keeping a high Alexa ranking instead.

Now, Alexa has announced that they are changing their ranking system, too. Instead of basing a page's ranking via those who have the Alexa toolbar installed on their web browser, they are expanding to include every user on the net (or something similar). Why? Well, most of the people who install and use the Alexa toolbar were programmers and site owners. I had no idea!

This change has caused me to think about the legitimacy of Alexa rankings. After all, if it was only the programmers and online marketers who used the toolbar, how are the rankings an accurate reflection of a site's popularity?

I don't know why Alexa chose to switch their ranking system, but I'm glad they did. In making the switch, they have stepped into the Web 2.0 era and handed control back to the people, those who use and populate the internet in greater numbers than the programmers and marketers.


Anonymous said...

Alexa Internet, is a California-based subsidiary company of Amazon.com that is best known for operating a website that provides information on the web traffic to other websites.
Alexa collects information from users who have installed an “Alexa Toolbar,” allowing them to provide statistics on web site traffic, as well as lists of related links. It uses these data to form Alexa ranking. There is some controversy over how representative Alexa’s user base is of typical Internet behavior. If Alexa’s user base is a fair statistical sample of the internet user population, Alexa’s ranking should be quite accurate. A known source of bias is the self-selecting, opt-in nature of Alexa traffic tracking software installation, but the significance of this bias on rankings is not reported. Alexa ranking measures traffic ranking collected from Alexa toolbar users. High alexa ranking has no relationship with high google ranking, yahoo ranking, and etc.
Ranking in Alexa is significant as it can significantly increase your bargaining power when it comes to selling advertising on your site. If advertisers see that your site has a higher ranking, they are likely to think that they can sell more of their products and services by having a link on your site. This means that you can charge them higher fees for that link.

Kyle Stich said...

Thanks for the detailed explanation of Alexa. I know what it is and how it works, and I am especially aware of how a site's Alexa ranking is used to leverage sales.

The greater question for me revolves around this fact: "Alexa collects information from users who have installed an 'Alexa Toolbar'." I find it hard to believe that the average internet user is downloading the Alexa Toolbar, so I remain confused as to how the rankings they generate carry so much weight in the financial world.

I am most interested to see how rankings change now that Alexa has moved away from collecting their data from these installed toolbars. I think many sites that previously ranked high will begin to notice a dip. Just a prediction, but the more that the actual populous is pulled into the data, the average user, the more that self-inflated rankings will begin to reveal their pomp.