It should be measured at the same place the track is measured, center of the wheel from full droop, to full bump (metal to metal) but this is not always the case for some class rules they pick an easyer spot to measure from.
If you're measuring to see how much usable travel you have for development or comparison purposes, there is nothing more realistic than the middle of the tread on the top or bottom of the tire. If the wheel is off, the measurement should still be in line with the tire center line.
Generally, the reading should be taken in the direction of suspension travel, which is rarely straight up and down. An exception to this is if you are working with a solid axle. This reading should always be taken as a straight up and down line (as in no camber change). With independent suspension, either is OK as long as you are consistent in it's use.
In any case, it should be a straight line between two points and not a curved measurement.
There is no use in getting too picky, because untrackable curves and the tire itself add to movement.