While Bill Tancer’s last post on Branded Terms per Search Engine was less than satisfying, his last post correlating Hitwise data with economic indicators is much, much closer to what I find is HitWise and Bill Tancer at his best - doing some real predicting with HitWise data - the kind of stuff that’s really hard to do if you don’t own HitWise.

And that’s what they should be posting about - things you can’t do any other way - like predict a upswing in the July Unemployment number based on search behavior - which HitWise tracked.

This week, news broke that the U.S. unemployment rose unexpectedly to 4.8%. Based on Hitwise data I anticipated this rise in unemployment over two weeks ago. Here’s the Department of Labor Chart:

Compare that with the Hitwise chart below:

The blue line is market share of visits for a custom category that I created of the seven largest state unemployment website. The red line is the weekly volume of searches on the term "unemployment." Correlating these data points to the DOL number is not an exact science. However, over the last two years, I’ve noticed that when both the visits to the unemployment sites and searches on "unemployment" show a directional change (either increasing or decreasing) that change is reflected in the DOL announcement.

This is just a rudimentary demonstration of how we can leverage online behavior to form leading indicators to traditional leading indicators. I’ve been experimenting with some others, such as predicting housing starts, consumer confidence and retail spending to name a few. If anyone has suggestions for additional indicators or ways of refining the unemployment example above, I’d be interested in hearing your thoughts.

This is why companies that really need to forcast SHOULD by HitWise - but you need skillful analysts to pull the data and make intelligence out of it.  Bill has done that - he’s delivered something you can’t get without HitWise (unless you want to read the Unemployment Stats when they come out).

Personally, I can imagine Hedge Funds using HitWise to determine how to invest (but it’s a bit of a strech to see them investing in the detailed monitoring of Search Behavior).  However, I predict within 5 years, or much sooner, this will be the standard practice - and this should be one major way to sell HitWise.  

Let’s see a lot more of this kind of analysis - how about looking at the behavior of the Dow, see if we can develop a model to predict if it’s going to be up or down a couple of weeks in advance based on Search Behavior.