The title is self-explained, darn I have to type and match 30 characters constraint
Your Website is not monitored:
They do not monitor your website traffic, they simply estimate your website traffic, exactly the same way Alexa estimates it. This is mentioned on both SimilarWeb and Alexa.
Alex mentions the traffic is estimated:
SimilarWeb mentions the traffic is estimated:
How do they estimate my website traffic then?
They estimate traffic from data obtained from their Toolbar Browser plugins, for example:
The reliability of their estimated data:
The reliability of the estimates is often low because too few people install those plugins and generally the reliability of data is often variable because certain niches will have more people install the toolbar than others.
If you want more reliable data you need to add your site with Alexa or SimilarWeb to their metrics system so they can monitor your true traffics, the same way Google Analytics does.
If you have added your sites on their service, they will know about how much traffic you're getting, and that data is accurate and other people can also see it. It means for some website, you can get accurate information, but most of people don't submit their site on such a tools because they have already implemented Google analytics, and Google did not sell their data to anyone.
They have also use many API service to gather data but it is not powerful as you think. They have also used ISP data in past, but many of government don't allowed it such as EU countries Also Most of people did not install such a toolbar, and freeware software on their system, so they are not getting such data now a days and hence they are doing massive marketing to grab webmaster attention and submit their site to them, so they get accurate information on low cost.
Alexa, quantcast, compete(Will terminate their service on 31st dec 2016), Similar web are not good at all. But if you want to check someone else traffic then still adword planner tool is good choice if website owner using Google Adsense, rest of tools are very poor, and you should not waste your time on it.
“Keep our competitors focused on us, while we stay focused on the customer” - Jeff Bezos, CEO - Amazon.com