Web searches as a leading indicator

The dream of business forecasting would be to find a single easily accessible indicator that would predict your company’s future business demand with perfect accuracy. In the last few years we’ve been able to get more prospect behavior data than ever. Examples include whether email campaigns were actually opened and patterns of customer behavior on websites. These are certainly great leading indicators of potential customer interest in products or services.

But what if we could get these same indicators of customer interest without the effort and expense of promotional campaigns? A recent article explained how using Google Correlate helped an auto manufacturer create a forecast that was 18% more accurate. This toolset allows anyone to analyze the correlation between web searches for particular words or phrases and their business performance. This in turn can be used as an input to a more accurate fitted model for forecasting.

Our best demand forecasting models include broad indicators like Google Correlate as well as more geographically specific indicators. This combined with sophisticated statistical models of historical performance to capture trends and seasonality let us get closer and closer to the dream of business forecasting.