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What is the difference between onsite and offsite analytic tools?

I am reading a book about web analytic tools and this is the definition (from the book):

Offsite web analytic's tools measure your potential website audience. They are the macro tools that allow you to see the bigger picture of how your website compares to others.

Onsite web analytic's tools measure the actual visitor traffic arriving on your website.

This doesn't make the distinction clear to me. I generally understand about onsite tools, but offsite tools doesn't make sense.

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    Offsite = data gathered from sites other than your own, eg your position in Google comes from Google, not you and so would require offsite analytics to collect that.
    – RichardB
    Jul 22, 2014 at 20:11
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    It's useful to know things like where you are in Google. It's also useful to know how many hits you have. Off-site and On-site is just about how this data is collected. Data is only as useful as you make it, and so it compliments if you can use both in your analysis.
    – RichardB
    Jul 22, 2014 at 20:19
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    Not just Google, that's an example - any data you can't gather from your site alone would require an offsite tool to get it.
    – RichardB
    Jul 22, 2014 at 20:33
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    Offsite is data which is gathered NOT on your site. For e.g GA (Google Analytics) provides you with industry benchmarking (how your site performs v/s the industry average).
    – Prasad Ajinkya
    Jul 22, 2014 at 20:54
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    All fine answers now that the question is open. @CRazyProgrammer you can add your own answer too if you've developed a better understanding.
    – dan ♦
    Jul 23, 2014 at 4:51

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Offsite analytics would include any tools that analyze traffic on your website through tools not served with the web page or directly connected to the web server in any way.

A good example would be Google analytics which can give you a good idea of the amount of traffic on your site, but because it does not have direct access to your website can only show traffic coming from Google. Another example would be Alexa which gathers data derived from various browser plugins to see how much traffic a site receives.

Onsite analytics would include tools like Google Analytics which is served as a cookie with the webpage, and cPanel's built in analytics would also be included since it directly monitors the traffic to and from your web server.

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