Keeping track of internet traffic during the phenomenal growth of the last five years has been a frustrating activity.

With so many businesses reliant on accurate data on unique user or page impressions to attract advertising or plan where to place it, or simply to impress upon analysts and commentators the popularity of a site, a lack of reliability and homogeneity has hampered revenue growth and business development.

The emergence of a number of panel measurement companies and the growing sophistication in their data capture technologies, has helped to ease those difficulties, although it has not yet removed them altogether.

Media Metrix, the US group that published its first report in January 1996, remains the sector leader but has been joined in an increasingly competitive market by Nielsen//NetRatings and PC Data in the US and elsewhere by companies such as NetValue of the UK.

David Day, Nielsen// NetRatings' director of analytical services in Europe, explains exactly what the companies do.

"It is really the who, what and where of the net. As a result of our tracking we can see where users go and the demographics of age, occupation and income. As a result, we can see what they do on a site, how long they spent there, where they came from and where they leave to," he says.

Despite each of these companies having a broadly similar methodology - collecting data from a representative panel chosen following an enumeration study of the entire internet universe - they differ in the size of their panels, the method of data collection and exactly what they measure. Consequently the results of their research can also offer a variable picture of a company's performance.

For example, in December of last year, MMXI reported that Amazon's aggregated US sites attracted 21m unique visitors while Nielsen//NetRatings placed the number at 18.1m.

Advantage

Despite the discrepancies, however, the advantage of the panel measurement system is its ability to keep track of the usage patterns of a large number of people and through the enumeration study, ensure that the panel is representative of the wider activity on an ongoing basis.

Data from the panels is also becoming available increasingly quickly. When Media Metrix started collecting its data, the company required the panel member to return a diskette to it in the post before it could aggregate and present results.

Today, however, the state of the art measurement meters employed by all companies can measure a wider range of PC activity, from use of Microsoft office applications to that of streaming media and e-mail, and then send it back electronically.

At its best, this allows the measurement companies to return statistics to customers within a matter of days, giving customers an immediate snapshot of the shape of the market. For some the neutrality of the hidden meter ensures an accurate picture of usage.

Alki Manias, the chief executive of NetValue, argues that the meter does nothing more than observe the user's normal activity on their PC, rather than requiring any calculated input from them.

"The best research is done when you don't have to ask anything, and the key to me that proves that this works is when a meter is attached the level of pornography viewed goes down at first before returning to normal levels later," he says.

The obvious downside to that neutrality, however, is that panels do not provide information on users' attitude to the sites they find, leaving companies to decide, for example, why their customers left their shopping basket without purchasing their chosen items.

Media Metrix moved to fill that gap in their service by merging with Jupiter Communications, the analyst-based online research group which can provide interpretation of the Media Metrix numbers.

"We find as a measurement company that our clients are looking for a full solution," says Mari Kim Coleman, vice president of MMXI Measurement products in Europe.

"Jupiter picks up where we leave off. We show how many visitors are going to a site, and then they give the why and the what's happening in the future."

Despite the growing sophistication of panel measurement techniques there are still weaknesses in the system which customers would like to see addressed.

Frustration

Andrew Wilkinson, European chief executive of Monster.com, the online recruitment company, feels that his company's performance is not fully reflected in ratings because of the lack of monitoring of workplace usage of the net.

"If we have a frustration it is that we have a huge number of users between 11am and 5pm from Monday to Wednesday. So we know that a substantial number of people are visiting during work hours and we don't get the benefit of tracking that traffic," he says.

In common with other panel companies, Nielsen, which Monster uses, has yet to fully develop its workplace measurement outside the US, although it is planning to implement it soon.

Despite this problem, however, Mr Wilkinson and Monster find the Nielsen service of great benefit to planning the different campaigns it needs in international markets. Indeed, Nielsen was chosen by Monster because its international profile - with panels in more than a dozen countries across three continents - best fits Monster's international outlook.

"We get a range of additional data that we can use to develop our marketing profile. We access information as it pertains to a local market and can then make sure our activity fits a particular country," he says.

Going forward, the challenge for measurement companies are to fill in those gaps that already exist in their coverage and to prepare for the change in access to the internet that will see the PC challenged by mobile phones, PDAs and interactive television as the primary point of entry for net users.

Mari Kim Coleman says that, at present, neither interactive TV nor the mobile internet is easily monitored by panel, but the company is tracking developments.

"The population using Wap and digital television isn't of a level of mass that we can use an audience measurement tool, and with wireless everything is defined differently - and there must be a certain conformity of what needs to be assessed. But Media Metrix will advance its product in the direction that the industry moves," she says.