A few thoughts on forecasting

It seems fitting that my first post should involve something that occupies a tremendous amount of importance (and potentially, debate) within an organisation (and certainly involves a lot of sleep loss for me personally!)


If you are new, or fairly new, to forecasting on your website, I’ll share some hard-learned truths.

You’re always going to be wrong. Always. The very nature of a forecast means you will always be wrong … and that’s okay. (Don’t get me wrong. When it actually happens, it’s thoroughly depressing, and often has you chasing your tail to find out why, but it’s still okay.) Your aim is just to be wrong as little as you can – and to be able to identify why your resulting actuals are off from your forecast. I would argue that divergence from your forecast today will make tomorrow’s re-forecast better, but only if you can explain it and learn from it.

Your forecast is only as good as the information you have. As you look back over your site’s history, if there are events you can’t explain, or inputs into your traffic that you fail to identify, your forecast will be more off than you would like it to be.

Don’t have all the information you need? Get it. Gather anyone/everyone/any information or inputs you need. If the company’s eyes are on your forecast, their gaze will stray if you frequently prove too far off. If they’re not yet looking at your forecast, they won’t ever start if you can’t prove your history of accuracy.

There is a difference between a forecast and a goal. As you start forecasting site traffic, ad space, conversion rates, lead generation (etc), you’ll need to explain this. Many times. Your forecast will be based on your site’s history and its inherent trends. But as an analyst/statistician/forecasting guru, you alone can’t identify everything that will happen in the future. (And if you can, give me your number – I have a few questions I would love answered.)

This is where your business/development/product team come in. Your forecast can estimate where your site will be in the future, based on your current trajectory. But you need inputs from others to anticipate future planned growth, that’s not evident in the data.

Let’s say your forecast suggests your site will be up 5% year-over-year. If your executive team want your site to  be up 20%, you need your business/development/product team to either a) temper this expectation, if it’s not reasonable, or b) advise how they will achieve this. If your fine-tuned, well-informed forecast suggests you’ll be up 5% year-over-year, 20% is not a forecast, it’s a goal. You can’t reach 20% YOY without at least a basic idea of how you’ll get there, and any attempt to incorporate it into your forecast without a skeleton of a plan will reflect poorly on your forecast, rather than reflecting on the failed execution of the plan for growth.

The moral of the story? Forecasting can’t occur in a silo. Analysts, business and executives must all get their “feet wet” to produce something that all are comfortable with and can rely on.

Not forecasting (yet)? Even if it’s rudimentary (forecasting your basic web traffic metrics only, e.g. Visits, Unique Visitors, Page Views) get cracking. It’s wonderful to be able to analyse, segment and test your history, but your business and executive teams will really appreciate even a lightly dotted line of where they’re headed.