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The PESO Model: A Guide To Understanding Earned, Owned & Paid Media

Table of contents

Introduction

The types of media explained

Why is it so crucial to understanding the PESO model? 

When does this model work?

What are the benefits of the using PESO model?

What are the disadvantages of the PESO model?

How should you budget for the model?

How should you use each type of media?

Conclusion

Introduction

An image illustrating the PESO model

Source: Spin Sucks

As the world of marketing and advertising evolves, so does the language we use to talk about it. One of the most commonly used terms in the industry today is the "PESO Model," which stands for Paid, Earned, Shared, and Owned Media. 

In this blog post, we'll take a closer look at the PESO model and explain what it means for your business. We'll discuss the different types of media that fall under each category and why it's essential to understand the difference.

We'll also give you some tips on how to make the most of each media type for your business to develop an effective communications strategy.  

Gini Dietrich, CEO of Spin Sucks, described the relationship between media types as four intersecting circles in her book Spin Sucks: Communication and Reputation Management in the Digital Age published in 2014.

It's been used by marketing and communications professionals ever since.

The idea is that each type of media has a different "weight" or value and that you should spend your marketing budget accordingly. 

For example, earned media (such as press coverage or word of mouth) is worth more than paid media (such as advertising) because it is more credible and trustworthy.

Owned media (such as your website or blog) is also worth more than paid media because you have more control over the message and can use it to build long-term relationships with your potential customers. 

Although each type of media has its benefits, the PESO model emphasizes the importance of using all four types of media in a coordinated way.

The types of media explained

There are four types of media you can use to promote your business:

  1. Earned Media

  2. Paid Media

  3. Shared Media

  4. Owned Media

Each type has its advantages and disadvantages, so it's imperative to understand how each type works before you decide which one to use.

Paid Media:

This is any type of marketing that you pay for, such as:

  • Display advertising: This includes banner ads, rich media ads, and video ads that show up on websites, apps, and social media channels.

  • Search engine marketing (SEM): This consists of purchasing search ads (such as Google Ads) that are displayed on search engine results pages (SERPs) via social media ads (such as Facebook Ads).

  • Social media advertising: This refers to paid ads that appear on social media platforms such as Facebook, Instagram, Twitter, and LinkedIn.

  • Traditional advertising: This includes paid ads that appear in television commercials, radio, and print ads.

Its advantage is that you can control the message, and it can be an effective way to reach a wide audience with your marketing message, but its disadvantage is that it is often expensive.

Earned media:

Media coverage that does not require you to pay for. This can include anything from:

  • Word-of-mouth

  • Mentions in the press

  • Coverage in magazines

  • Blog posts

  • Mentions on social media networks

  • News articles

  • Television features

  • Link building
  • Influencer marketing

This is mostly for Public Relations (PR).

The advantage of earned media is that it can help you build credibility, reach new audiences, and even increase sales. Most importantly of all, they are free! But the disadvantage is that you cannot control what people say about you.

Shared media:

The term "shared media" describes the different types of media that can be used to promote your brand or product on social media sites, such as:

  • User-generated content (UGC)

  • Blog posts

  • Infographics

  • Video content

Sometimes it can be categorized as paid, earned, or owned media.

Owned media:

Owned media is any type of content that you create and distribute yourself and have control over, such as:

  • A blog post.

  • An infographic

  • An email marketing list

  • Video 

The advantage of owned media is that you have control over the message and it is usually less expensive than paid media. The disadvantage is that it takes more time and effort to create quality content.

The key to this model is to find the right balance between these four types of media, based on your budget and goals. 

Read: A comprehensive guide to content marketing

Why is it so crucial to understanding the PESO model? 

As a framework for thinking about paid, earned, shared, and owned media. Understanding the paradigm is critical because:

  • It is a helpful tool for companies and organizations looking to develop an integrated communications strategy.
  • It is a helpful tool for thinking about your overall media strategy and how to allocate resources among paid, earned, shared, and owned media.

By thinking about all four types of media, you can create a well-rounded plan that leverages the strengths of each.

When does this model work?

The answer is that it depends on the goals of the organization. For example, if a company wishes to build thought leadership, earned media may be the most suitable option.

If a company wants to drive sales, paid media is the most effective option.

And if a company wants to build brand recognition owned media is the most effective option.

Ultimately, the PESO model is flexible and can be used in a variety of ways.

It is a very effective way to understand how earned media, paid media, and owned media work together, and as a communications planning model, it can help you determine when to use what type of media to achieve your desired goal.

What are the benefits of the PESO model?

The PESO model is a tool that can help organizations achieve their communication goals. It's a holistic approach that considers paid, earned, shared, and owned media and can be of substantial benefit to organizations of all sizes.

Using the PESO model can help:

  • Create a more comprehensive marketing plan.

  • Clearly and concisely illustrating the relationships between these four media types can help organizations make more informed decisions about their marketing mix.

  • Organizations maximize their reach and amplify their messages.

  • Save organizations time and money by avoiding duplication of effort.

  • Make the most of their budget and get the most bang for their buck. 

  •  Organizations can measure and track their progress over time and identify which strategies are most effective.

  • Create a more coordinated and integrated approach to communications.

If you're looking for a universal approach to your marketing, the PESO model is worth considering.

What are the disadvantages of the PESO model?

While the model is a smart way to balance your marketing mix and ensure you're making the most of your budget, there are some drawbacks to using this model that you should be aware of.

  • It can be complex and time-consuming, especially for businesses that are inexperienced in the world of digital marketing. You need to carefully consider each type of media and how it can best be used to achieve your goals. It can take some time and effort to get this right.

  • It requires a great deal of coordination among various team members, including the PR, marketing, and advertising teams. Everyone needs to pull together to make this model effective. This can be a challenge, especially in larger companies.

  • It can be expensive to implement, requiring significant investment in digital marketing tools and resources.

  •  It doesn't take into account the potential reach of each media, which can vary widely. 

  • It doesn't take into account the different ways people interact with each.

How should you budget for the model?

Approach 1:

There's no blanket answer to this question, as the amount you should spend on each type of media depends on your budget, goals, and industry.

However, the generally accepted rule of thumb is that you should spend most of your budget on earned media.

This is with a smaller allocated budget dedicated to paid media and an even smaller portion allocated to owned media. 

The "80/20 Rule" states that you should spend 80% of your budget on "Earned Media" while the remaining 20% can be split between "Paid Media", and "Owned Media". 

(Owned, Earned, and Paid, in order of priority).

The reason for this is that "Earned Media" is generally more effective than "Paid Media", and "Owned Media" can be a very powerful way to complement your other efforts.

For example, if you want to increase brand awareness, you should focus on earned media, such as press releases or publications in trade journals.

If you're trying to build brand loyalty or increase engagement with your audience, you should focus more on earned and owned media. 

If you're trying to increase sales, you should focus more on paid media, such as online advertising or sponsorships.

If you are launching a brand-new product, you should allocate a larger portion of your budget to paid media to attract attention and generate buzz. 

Of course, there are exceptions to this rule, and you'll need to experiment to find what works best for you. You may need to adjust your budget depending on your specific needs and goals.

But in general, the model is a practical way to think about how you should allocate your marketing budget. Whatever your budget, remember that it's crucial to create a mix of all types of media to achieve the maximum results.

By understanding how each type of media works, you can create a well-rounded campaign that maximizes your reach and impact.

Approach 2:

There are several ways to implement the Peso model. Another approach is to use a "media mix" that includes a mix of earned, paid, and owned media.

An alternative approach is to use a "media weighting" system where you allocate a percentage of your budget to each type of media. 

Which approach works best for you depends on your goals and your resources.

If you are trying to reach a broad audience, a media mix might be a worthwhile option.

If you want to target a specific audience, a media weighting system may be more effective. 

Regardless of which approach you take, your budget should be allocated strategically across the various types of media. 

How should you use each type of media?

All four media types have their advantages, but also work well when used in an integrated fashion.

There is no blanket answer to this question, as the most efficient and effective way to utilize each media type depends on your specific business objectives.

However, we can give you some general guidelines on how to properly use each type to achieve your marketing goals.

Paid media are effective for building brand awareness as well as driving traffic to your website or product.

They can also be used to target a specific audience with laser precision.

Earned media is a very effective way to build credibility and trust with your audience. It can also be used to build relationships with influential people in your industry.

Owned media can be used for creating and curating content that supports your business goals.

It can also be used to build an engaged community around your brand. Plus, it's a great way to tell your own story and build a loyal following.

So how should you use each type? The answer is that it depends on your specific communication goals. 

Conclusion

So there you have it! An overview of the PESO model and how earned, paid, and owned Media can be incorporated to develop a successful marketing strategy.

While each type of media has its strengths and weaknesses, they can all be applied helpfully.

This will enable you to think about how to efficiently use your marketing budget to reach your target audience and achieve your marketing goals.

By using all four types of media, you can develop a well-rounded PR and digital marketing strategy to reach your target audiences.

When it comes to media spending, knowing how earned, paid, and owned media are weighted can help you make the most of your resources.

Are you ready to get started? Plan your implementation of the model today!

Having trouble with your internet marketing efforts? Get in touch with us today. Our online marketing agency can help you develop the most effective marketing campaigns to enhance your return on investment (ROI).

Abala Tom
Date: Sep 10 2022

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