Tuesday, August 18, 2009

The Predictability of Search Trends

Google today posted a new insight into the predictability of where search trends will move. The study revealed that with a simple time series forecast, slightly over half of the queries on Google are able to be predicted with high accuracy.

These time series analyses allow you to create a deviation away from where a predicted trend will move toward. Positive and negative misses can help you in benchmarking where a current trend is deviating toward. The other (glass half empty) view is to showcase that another half of Google queries are unpredictable. As we saw with the iPhone data, major releases can serve as an indicator of where current performance of sales is trending. This allows us to get a pulse on where the purchases move relatively.

Using search data to influence your investment decisions is a happy medium between those queries that we can predict and those which roll with the tides. The Google Research Blog post shows the full white paper analysis.

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