Are You Considering Alexa Rank to Determine Quality Score of a Website?

Alexa Ranking is used as a score card by many advertisers to determine whether or not to advertise on a particular website. This article will help you decide whether to consider alexa rank for estimating the quality score of a website.

How Alexa Ranks a Website?

According to Wikipedia, Alexa Internet, Inc. is a California-based subsidiary company of Amazon.com that is known for its toolbar and website. Once installed, the toolbar collects data on browsing behavior which is transmitted to the website where it is stored and analyzed and is the basis for the company’s web traffic reporting.
See what happens here (Facts about Alexa):
Alexa actually ranks websites based on the toolbar tracking.
I have an entertainment blog which had an Alexa Rank of 1,05,268 with an average of 2000 unique visitors daily. I have a friend who has a site with an AlexaRank of 45,025 which is a very high rank when compared with my site.

We’ve analyzed the traffic status for the last 30 days. He is getting only 800 unique visitors per day (in the same niche).
The report indicated that my site outperformed his blog by double the number of his total visitors, but the Alexa Rank for his site is higher than mine. So, Do you feel Alexa Rank should not be used to determine the overall traffic ranking of the websites or should it be weighed more?
Let me explain!

As per Google Analytics, there are 3 types of traffic indicators.
Direct Traffic: This is the traffic where the visitors come directly to our website either by bookmarking our site or by remembering its URL if they find the content interesting. This type of web traffic will convert very well.
Referral Traffic: This is the traffic coming from other sources (other websites, can be ours too) such as social bookmarking sites, Social networking sites like Facebook, Myspace, Twitter etc… According to my experience, most people will receive highest traffic percentage through this referral sites if you actively participate in social networks.

Search Engines: This is the free traffic that we get from search engines like Google, Yahoo, Bing, Altavista etc… This is the traffic what every webmaster, SEO Professional and Professional Blogger always dream about.
So, we should rely only on real statistics than the estimated traffic (Alexa) to determine the authority of a website. There are many free tools like Google Analytics, Sitemeter and many more…which provide you with real data. If someone wants to advertise on your website, he should request this data before making an investment.

So, Don’t worry about Alexa Ranks (even if it is high or low) if you are getting good number of unique visitors/day and your bounce rate is < 40%.
Now what you do? Start analyzing your Analytics Data Vs Alexa Traffic Status.
Do share your opinions in comments.