Pulled from Wikipedia: http://en.wikipedia.org/wiki/Web_analytics

Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web site usage.[1]

There are two categories of web analytics; off-site and on-site web analytics.

Off-site web analytics refers to web measurement and analysis irrespective of whether you own or maintain a website. It includes the measurement of a website’s potential audience (opportunity), share of voice (visibility), and buzz (comments) that is happening on the Internet as a whole.

On-site web analytics measure a visitor’s journey once on your website. This includes its drivers and conversions; for example, which landing pages encourage people to make a purchase. On-site web analytics measures the performance of your website in a commercial context. This data is typically compared against key performance indicators for performance, and used to improve a web site or marketing campaign’s audience response.

Historically, web analytics has referred to on-site visitor measurement. However in recent years this has blurred, mainly because vendors are producing tools that span both categories.

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