Want to know why the Alexa toolbar being released on Firefox is important?

The Alexa ranking of a site is used for two purposes. Firstly, it’s the best way to find out the approximate traffic levels of other sites. The other (and more important) purpose is that many marketplaces value how much advertising space on your site is worth by using your Alexa ranking. The better ranking that you have - the more money you can make!

However, the Alexa ranking has often been criticized for being inaccurate and those claims are quite justified. Your Alexa ranking isn’t based upon how many visitors that you have, but upon how many Alexa toolbar users visit your site. You could have 50 million hits per day, but if your site doesn’t attract Alexa toolbar users, your ranking isn’t going to be great.

In the past, the Alexa toolbar has only been available on Internet Explorer which meant that your ranking was only based on traffic from visitors who used IE and had the Alexa toolbar installed - a very small demographic indeed!

Why the Alexa toolbar on Firefox is important

Imagine that you have a site that attracts 100 visitors per day. Based solely on Cash Quests traffic data, approximately 31% of visitors are using IE and I would predict that only a small percentage of those visitors have the Alexa toolbar installed. I’ll be generous with my assumptions and say that 10% of IE users have the Alexa toolbar installed (although I’m sure that it’s actually much less).

What that means is that for a site with 100 visitors per day, the average Alexa ranking of the site is based upon the data from just 3.1 visitors per day. That’s right - just three visitors!

If those visitors don’t show up for the day - your Alexa ranking is going to take a dive!

With Firefox users being able to use the toolbar, the data obtained by Alexa is going to be a lot more accurate and will create a better representation of a site’s traffic. If we continue with the assumption that 10% of all visitors will have the toolbar installed, the ranking for a site with 100 visitors would be based upon the data from 10 visitors across both browsers which is three times more than under just IE.

Even if you don’t agree with the methods or numbers presented here, there is no denying that the rankings are about to become a lot more accurate.

Is this good or bad?

Having a more accurate ranking system is a good thing. However, it also means that I expect the rankings to change a lot over the next few months. As it is now, many top bloggers have a ranking around the 2,000 mark which means (according to Alexa) they are in the Top 2000 most visited sites on the internet.

I doubt that they really are!

As the accuracy of the rankings improves, I expect that many bloggers will find their rankings slip as the data adjusts and takes into account all the major sites that have previously not performed well under the ranking system as they didn’t attract the typical IE/Alexa toolbar user.

While there will undoubtedly be some money lost because of this change, it also means that the money earned will be deserved and a better reflection of market prices.

The next step

If you feel that your Alexa ranking isn’t as good as it should be, the next step is obviously to download the toolbar and help the internet work towards a more accurate ranking system!

As traffic is essentially the only metric that matters, I predict that Alexa will have a lot more influence in the “make money online” world in the next few months and that we may see manipulated ranking systems like Technorati slowly fade into oblivion. At least there wouldn’t be any more annoying link trains!

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