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logfile analysis is the direct processing of the logs generated by webservers.
Both have their pros and cons, and as a general rule of thumb, both should be used to best understand your traffic.
We largely use page tagging rather than analysing raw log files. However, what I would say is that consistency is key. So if you use one or other, or both, make sure to compare like with like i.e. don't look at page tagging results one week then log files the next. It's unlikely that they'll match ... and you'll think you have flucuating traffic.
Not important to which you decide to use, but important when comparing week on week stats.