Prophet - External Predictors (Extra Regressors)

You can add ‘External Predictors’ (or Extra Regressors), which can be used as one of the components to forecast the outcome.

For example, let’s say we want to forecast Sales values.

We can simply forecast the Sales based on the past Sales data.

And RMSE is $16,726, which is considered to be as an ‘average’ difference between the forecasted values and the actual values.

Now, we can add another variable (or column) called ‘Marketing’, which I know it has some degree of correlation with Sales, as the External Predictor.

Notice that the difference between the actual values (blue) and the forecasted values (orange) got smaller.

And the RMSE got smaller, too, as you would expect.

We can add multiple External Predictors.

Here, I’m adding a Sales Compensation variable as one of the External Predictors. And the result looks even better than before.

And the RMSE got even smaller, it’s 5,405 now.