PEST, SLEPT Analysis for Online Marketing

by rishil on October 22, 2010

When I started learning Marketing Theory  ( I was 17!) we had a model that has stuck to the back of my mind to this day – PEST, Political, Economic, Social, and Technological analysis. When I went to university, that model first changed to SLEPT, where the L stood for Legal, to further expand it to PESTLE and then STEEPLE, which is now wavering at STEEPLED:

  • Social
  • Technological
  • Economic
  • Environmental
  • Political
  • Legal
  • Educational
  • Demographic
STEP ANALYSIS

STEP ANALYSIS

It sounds rather convoluted from the early days, but unfortunately (or fortunately – depends on how you look at it) our world is expanding, and marketing can no longer rely on the simplicities of bygone eras to work out manageable frameworks for crafting strategies. The framework is part of the external analysis when conducting a strategic review or carrying out market research. The aim of the framework is to supply a reasonable an overview of the different macro-environmental factors that affect a company’s marketing strategy.

It is promoted amongst my marketing peers as useful strategic tool for understanding market growth / decline, business position, potential for growth and direction for operations. To me in particular, the framework is useful for understanding the online landscape of a business, especially when considering all the online channels of marketing available. Often when working with large sized brands, I have found a massive disconnect between different channels, from Paid Search to Organic, to independent  Affiliate marketing, and a disjointed email and Display advertising strategy.  Any decent online marketer will not look at these channels individually, but should take a macroeconomic view of them.

It sounds like a lot of work, but realistically it isn’t, identifying most of the conditions within which a business is operating shouldn’t be a large scale exercise, but a simpler checklist approach in my opinion.

Why does this help?

RulesWell to start with it builds a boundary within which you can operate and run the various online channels, for both, limiting risk, and to increase efficiency.

For example, a business may put itself at risk if it allows an agency representing them to ignore legal ramifications –  in the UK and Europe, it is illegal to pose as a customer when supplying online feedback – you will be surprised how many businesses are ignorant of this law. In the US, FTC regulations imply that affiliate links need to be disclosed.

Similarly, when I run this framework, I make sure that Google rules, guidelines etc are also covered under Environmental for SEO / PPC – after all, it is the Online Environment I am talking about (this is actually a misplaced used of the original intention of the word Environmental in the framework. But this suits me better).

An example of increased efficiency actually runs off a number of these – an example is when you have taken the time to understand the businesses / brands demographics, you could narrow your target focus to that group. No point me creating a link bait piece about socks colours, if my demographic is “environmental geek”. On the other hand, a piece on the “Your cheap socks cause x volume of C02 every year. Buy plain black socks to reduce it by X” (that’s a daft example, but I hope you get the gist).

Similarly, you could use Google’s display network to fine tune demographic targeting, age, sex etc. On the other hand, if a large number of a business’s customers are in a particular town or country, I can make sure that my generic paid search activity is given that geographic boost.

How Do I Carry Out A PEST Analysis?

The simplest way to create these frameworks is to form an ongoing Work-In-Progress document, these factors are subject to change, and as such you should be constantly adding and taking away from it.

The easiest way to start the process off would be to create an arbitrary SWOT (Strength, Weakness, Opportunities and Threats) for each one, along with any relevant references.

An Example of a Simple PEST

Business: A UK Digital Company Specializing in Education Material for Online Marketing

Online Jobs Trends Boost (click for full size)

Online Jobs Trends Boost (click for full size)

  • Political: The UK government recently formulated a plan to cut spending by £6.2 Billion. The biggest of all the departmental cuts will be at the Department of Business, Innovation and Skills, totaling £836m.
  • Economic: Due to the current lingering recession, many people are out of jobs, and people are trying to pick up any jobs available to make a living. (this may leave them open to online make money scams )
  • Social: Attitudes towards making money online are changing. Like the US, many people are resorting to the web for making money ideas, and looking for online jobs.
  • Technological: the reach of broadband in the UK is very high, and mobile internet has expanded that reach even further.  This means more households have access to the internet and are better laced at remote working, or for working online.

Crafting a Marketing Strategy from the PEST

The key premise I wanted you to take away from the above is that the business has analysed the current framework which it operates in.  Reduction in the spending available to the Dept of Business means that they may have less funds to create resources, which mean that they may be amenable to content provided gratis (AKA free) by a third party, especially one that has done its due diligence and has really good content that may be of use to it population.

Due to the Economic, Social and Technological trends, there will be more people that will be interested, vested in and available to access that information and any further resources you may be able to put in front of them. This means that the clever agency will strive to build relationships with such organizations to create simple bite sized, yet helpful resources that may further whet the appetites of their readership. This can then over time be translated to selling of more advanced courses to those who may be able to afford them.  On the other hand the data may help craft a pricing strategy that isn’t predatory and attractive to this growing niche.

And the beauty is that the government agency will help push this information in front of the key audience.

Summary

Of course the example I demonstrated above I very simplistic, but in my opinion not an impossible one. But it gives you a visual demonstration of the benefits of conducting traditional Marketing analysis, even if you are on the online field.

Marketing theoretic models have various uses, but to me the key use is to enhance focus. A structured approach will usually give you very interesting dividends.

Resources

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Rishi Lakhani is an independent Online Marketing Consultant specialising in SEO, PPC, Affiliate Marketing and Social Media. Explicitly.Me is his Blog. Google Profile

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