Data Deep Dive: Google Trends, Part I
Google search data is widely accessible, but few understand how to use it correctly or the rigor required to ensure its reliability.
Welcome to the Data Score newsletter, composed by DataChorus LLC. The newsletter is your go-to source for insights into the world of data-driven decision-making. Whether you're an insight seeker, a unique data company, a software-as-a-service provider, or an investor, this newsletter is for you. I'm Jason DeRise, a seasoned expert in the field of data-driven insights. As one of the first 10 members of UBS Evidence Lab, I was at the forefront of pioneering new ways to generate actionable insights from alternative data. Before that, I successfully built a sell-side equity research franchise based on proprietary data and non-consensus insights. After moving on from UBS Evidence Lab, I’ve remained active in the intersection of data, technology, and financial insights. Through my extensive experience as a purchaser and creator of data, I have gained a unique perspective, which I am sharing through the newsletter.
Google Trends is often used as an Alternative Data1 source. But I get frustrated when I see Google Trends misused to support arguments. The data itself isn’t flawed; rather, it’s the misunderstanding of the data that leads to misinterpretation and poor application.
This is an article I have wanted to publish for about a year. The biggest challenge I faced in creating the final version was avoiding going down the rabbit hole that is Google Trends (each returned search data may spark another idea and another search to investigate). The second challenge was picking examples of Google Trends use that are relevant for readers of the Data Score, but without turning it into a full investment thesis (this isn’t investment research). And the final challenge was avoiding writing about anything that would conflict with my day job.
Rick Beato, a well-known YouTuber in the music industry, recently used Google Trends to argue that music is not as good as it used to be and that music is becoming less popular—yes, he does admit he sounds like an old man yelling at clouds. Here’s the part of the video where he uses Google Trends data.
I appreciate what he was trying to say, but he used Google Trends incorrectly. I thought this question of the popularity of music compared to other activities provided a great low-key topic to explore via Google Trends, using the best practices for getting quality results. It also helps contrast good and poor uses of Google Trends.
In the Data Deep Dive Series of The Data Score, the format covers the following topics:
Common questions addressed with the data
Underlying Data
Cleaning the Data
Enriching the data
Limitations to consider
Action items to begin using the data
I went deep into the underlying data in this part of the deep dive. We’ll approach the remaining topics in Part II of the Google Trends deep dive.
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Common questions addressed with the data
As a starting point, we need to understand what Google search is and isn’t. It’s not a proxy for purchases. It’s not even a proxy for intent. Google search data serves as a proxy for “top-of-mind awareness,” which refers to the topics or brands that are most immediate in a person's thoughts. When someone uses Google, what they type into the empty search bar reflects what's currently occupying their mind, whether it's curiosity, concern, or intent.
That could be to find a product to purchase or a video they want to watch. Or, it could be that the search term entered is because they want to know more about something that has negative implications for the searcher. For example, a major controversy affecting a brand or product leads to higher search activity. That’s not a positive signal for purchase intent.
For instance, the surge in searches for Delta Airlines during July 21–27, 2024, wasn't indicative of increased purchases (the Crowdstrike/Micrsoft outage affected Delta Airlines materially), just as the spike for Southwest Airlines in December 2022 wasn’t a good signal either (bad weather caused a significant number of Southwest flights to be cancelled).
Investment questions that can be answered:
The types of questions that can be answered cover most sectors and geographies. The primary use is to address investment debates, where knowing top-of-mind awareness of a topic would be critical to assessing the potential for outcomes. This could be any topic, primarily with a consumer lens, but is possible for B2B product or service awareness. When does top-of-mind awareness matter the most?
Assess if a disruptive innovation is gaining mindshare
Assess if new consumer behaviors are long-term trend or fad by monitoring awareness
Assess potential success of a new product launch compared to prior product launches based on initial search activity
Assess if the latest media release is likely to be a blockbuster
Assess the rising public consciousness of political topics and themes
Keep in mind each of these questions is an example where there is little known or measurable information about the downstream impacts of changing top-of-mind awareness. Top-of-mind awareness refers to how prominently a topic or brand is in people's thoughts, which is the first step in the marketing funnel toward trial and repeat purchases. High top-of-mind awareness can eventually influence consumer behaviors that impact a company’s sales and profitability, reflected in the company’s revenues and profits. If there are known measures available that capture behaviors further down that marketing funnel, the importance of the questions Google Trends can address as a data point becomes less important (e.g., if we care about the current revenue trend of a retailer, transaction data is a closer proxy). However, combining top-of-mind awareness with a dataset covering purchase or usage behavior allows for a deeper understanding of the conversion of awareness to purchase and usage.