The main goal of a web site is providing information and content to its visitors, but how do you know how many people visited your websites, which pages did they visit, which content is more likely to attract visitors, are there any returning visitors... Usually when you invest time and money optimizing your website, or promoting it, or managing a pay per click campaign, you have to know how effective it was, that way you can decide If it's worth it or not. In fact, every webmaster has to track his online visitors and their behaviour.
Web analytics is the measurement of a website's visitors behaviour. It refers to the measurement of the best converting pages, the number of visitors, unique visitors, returning visitors, goals, entry pages, exit pages, geolocalisation... in order to determine which pages of the website succeeds and helps you reach your objectives. For example, You need to understand where your traffic comes from, which landing pages encourage people to make a purchase, which affiliate or partner site sends the most converting traffic, which one sends low quality, non converting traffic, which marketing effort generates the best Return On Investment (ROI)... thus Web Analytics is critical to improving the measurable results of a marketing campaign in order to improve the return on investment (ROI) or you are simply wasting your money.
The main advantages of logfile analysis are the fact that the data is already logged by your webserver. Every transaction is recorded by the webserver regardless of the visitors browser, and this data is on your server directly in standard format so you don't rely on a third party server. Another advantage is the fact that logfiles provides information about visits from search engine spiders, bots, and failed requests which is really important if you want to optimize your website.