A method for processing seismic data. The method includes predicting seismic data according to an earth model representing seismic properties of subterranean formations in the earth, determining a difference between seismic data acquired from one or more seismic receivers and the predicted seismic data, projecting the difference into a model space in traveltime, and updating the earth model according to the projected difference. As a result, the updated earth model more accurately represents the seismic properties of subterranean formations in the earth.