PPC Market Analysis with PEST

March 26, 2013

This is the first post in a series entitled: “5 Analysis Tools: A Conceptual Look at PPC”. This series will focus on utilizing five marketing tools to help develop a strong paid online advertising strategy.</>The first tool we will look at is commonly known as a P-E-S-T analysis. Whether you’re familiar with this tool or not my hope is that this post will provide some useful ideas and perspectives.

How do you use this tool to create a PPC strategy?

Let’s define what P-E-S-T stands for: Political-Economical-Social-Technological.

You simply take one acronym letter at a time and define the associating factors that may have an impact on your marketing plan, advertising strategy, or other aspects of your business.

Political Factors impacting Paid Search

What laws or regulations govern online advertising in your local area, or region, or nation? What political bodies hold influence? What are their motives and goals? What tax regulations are in place, or soon to come, that will cut down your profit margins or cause you to raise your prices? In lieu of these regulations what are you going to do differently in your PPC strategy?

For example if you choose to raise product prices to offset increasing tax expenses how is that going to impact conversion rates? Think about the JND (just noticeable difference) concept (Babin, Harris). If you increase prices too much customers coming to your landing pages may blow a cork and choose to go somewhere else!

Economical Factors impacting Search User Demands

The most obvious impact here is the health of the economy in regards to the levels of disposable income your potential customers or clients may have.

Is the economy growing? Are more people employed and spending money on what you have to offer? Think about the current state of the economy and how it affects the population’s buying habits.

For example, in a down economy if consumers of fishing tackle who usually desire to have top quality products are now searching for cheap alternatives, how is this going to impact the keywords you’re targeting? Or the text you use in your ads? How about your bidding strategy?

Are CPCs going to increase due to increasing competition from more companies trying to flock to meet consumer demands?

Typically in a down economy luxury goods see a real drop in demand.

Social/Cultural Factors Influencing Search Behavior

Consider the many social or cultural factors that could influence consumer behavior. Does your brand appeal to their deeply held values? How do these values influence their purchase decisions?  How does their current lifestyle, or their desired lifestyle, influence their purchase decisions?

Thinking about these values, how should they influence the strategy behind your paid online advertising? Do your ads appeal to your target market? How do these values influence their online search behavior?

Technological Factors Changing the Search Funnel

As we learn from Google, users are spending time before they purchase a product or service researching and learning about it from multiple sources. This is known as ZMOT, or Zero Moments Of Truth (“The 2012 Handbook.”).

Where is your target market going for information about the product or service you are offering? What devices are they using to seek out this information? Who are they interacting with to gain insight on how others have experienced your brand? What sources of information are they finding?

What points of interaction do you want users to have with your brand? Where are these taking place? Where should these be taking place? Are you interacting with them through social media?

Are you carrying this influence over to your online advertising through social extensions in your Adwords campaigns? Are there certain websites your target market frequents? Are your display ads showing on these websites?

In Conclusion

This tool’s purpose is to get you thinking about and identifying the multiple influences that will have an impact on the success of your PPC campaigns, as well as your other advertising mediums.

Post 2: PPC Analysis with Porter’s Five Forces

Post 3: S.W.O.T. Analysis of Your PPC Advertising Strategy


Babin, Barry J., and Eric G. Harris. “Consumer Learning Starts Here: Perception.” CB2. Mason, OH: South-Western Cengage Learning, 2011. 48-50. Print.

“The 2012 Handbook.” A Modern Marketing Strategy –  Social Media Marketing & ZMOT from Google. N.p., n.d. Web. 19 Mar. 2013.

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