Often, you want to look at your metrics over a longer time period than usual. This is especially true if your metrics are “jagged” and move around a lot. You have two choices:
The Exponential Moving Average (“EMA”) is a very useful tool in your metrics arsenal because in the EMA the memory of past metrics values is never forgotten, though it is gradually given less and less weight over time. Further since the EMA is based on what the value of your metric is today combined with what the EMA was yesterday, you don’t have to keep large amounts of past data on hand to update each day’s new values.
Google AdWords almost certainly uses an EMA to track your keyword Quality Score.
Read this entire article over at my MarketingLand.com column
Keep An Infinite Memory for your Metrics