peso-model

PESO Model And Why It Matters In Business

To optimize its marketing communications, a business can categorize media as either paid, earned, shared, or owned media (PESO). Analyzing these four categories is particularly useful for content-driven, online marketing strategies to build brand awareness, customer loyalty, and gain market share.

Understanding the PESO model

There is no more effective means of lead generation than online media. Businesses who use online media to their advantage build brand awareness, customer loyalty, and market share. To derive maximum value out of online marketing, however, brands must use a variety of strategies across different mediums.

These mediums encompass four categories of media. While each category will require professional strategies to be developed, it is important to note that the PESO model seeks to help each media channel act as a single, cohesive unit.

Let’s now look at them in more detail.

The four categories of online media

Paid media is what most consumers associate with traditional advertising. Think print advertisements, TV commercials, or banner ads. In most cases, one business is buying access to the audience or platform of another business.

Paid media can be tracked through performance metrics such as clicks, conversions, visits, or views. It is a highly effective (though resource-intensive) form of advertising. But to maintain its efficacy, it does require continuous investment.

Earned media

Earned media is content that is created about a business by a separate entity, whether that be an individual or another business. Earned media is not paid media, in a sense that earned media results when a business does something worth talking about.

Earned media includes backlinks, press coverage, reviews, and awards. Because of its association with viral content, earned media has the potential to reach many more consumers than paid or owned media.

Shared media

Shared media is content shared across social media. It is a less explicit form of media since social media is a constantly evolving landscape.

Shared media includes social media content, but it also encompasses user-generated content and co-created partner content.

Owned media

As the name suggests, owned media is any type of media content that a business creates itself. This includes websites, videos, podcasts, e-books, and blog posts.

Owned media also includes content a business outsources to a freelancer – so long as the copyright is transferred from the freelancer to the business after completion.

The importance of integration in the PESO model

A fundamental concept of the PESO model is that each category is more effective when used in conjunction with other categories than it is in isolation.

Some businesses may be tempted to incorporate paid media as their only strategy, but this approach only works as long as funds continue to flow. However, paid media is important when a business has high quality owned media that it needs to showcase in front of a large audience. 

Super Bowl advertisements are one example of this process in action. Brands use a combination of paid, shared, and owned media to generate buzz. This in return creates earned media, where brand awareness increases through organic referrals, backlinks, and press coverage.

Key takeaways:

  • The PESO model is a marketing strategy where businesses use a combination of paid, earned, shared, and owned media.
  • The PESO model is used to increase brand awareness, customer loyalty, and market share.
  • The PESO model is most effective as a holistic and fully integrated marketing strategy. While each media category is effective in isolation, integration ensures a stronger and more cohesive strategy that drives outcomes.

Other strategy frameworks:

Additional resources:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here