Just comparing the most recent month with the previous month is often misleading because it takes the numbers out of context. It also ignores factors that vary from month to month but often don’t vary from year to year.
“I had a lousy month last month. Visitors and advertising were both way down from the previous month,” goes a common complaint on webmaster forums.
But audience and revenue aren’t consistent from month to month for good reasons. Yes, some variations are normal for anyone who watches the numbers carefully. But major swings also have reasons for occurring. They include:
- Weather factors will lead to higher audience during school breaks for travel sites. People go on vacation during those times.
- Retail sales climb before Thanksgiving and Christmas, but they plunge during the first few months of the new year.
- The health of the economy will lift ecommerce sites during growth and drag them down during recessions.
- News sites experience steep spikes and declines according to the level of interest in breaking events.
Does a city have the same average temperatures in July as it does in December? Of course not.
But a city has temperatures in July that are similar to previous Julys.
So it’s almost worthless to compare the most recent month with the previous one. It’s much better to compare the most recent month with the same month in the previous year.
It’s even better to compare entire quarters (three months) with the previous year. Better yet, compare the most recent month or quarter with the same month or quarter of as many previous years as possible.
How to Build Better Insights
A spreadsheet offers all of the necessary insights for either revenue or audience. Place the monthly labels across the top from January through December.
On the left side, put the years starting with the current one at the top and oldest at the bottom. Fill in the cells with the numbers.
In either the top or bottom row, create a formula that tracks the average for each monthly column. A typical formula is “=average(f1:f6)” which should work for Excel, OpenOffice Calc and Google Docs (but don’t use the quote marks).
I like to compare the results of the most recent month with not only the previous year but also with the average.
I’m happy if I beat the previous year. I’m even happier if I beat both the previous year and the average for multiple years. If the previous year was bad for some reason, beating the average makes up for the difference.
Looking at the numbers on a quarterly basis is even better because quarters smooth out anomalies that may occur in a single month, such as a spike from a news story or from bad weather.
This historical monthly and quarterly chart is easy to do, needs updating only once a month and gives important perspectives about site performance.