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.

Connected Marketing Frameworks

Affiliate Marketing

affiliate-marketing
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Ambush Marketing

ambush-marketing
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Brand Building

brand-building
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.

Brand Equity

what-is-brand-equity
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.

Brand Positioning

brand-positioning
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Business Storytelling

business-storytelling
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.

Content Marketing

content-marketing
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.

Digital Marketing

digital-marketing-channels
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.

Growth Marketing

growth-marketing
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

guerrilla-marketing
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Inbound Marketing

inbound-marketing
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Integrated Marketing

integrated-marketing
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.

Marketing Mix

marketing-mix
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.

Marketing Personas

marketing-personas
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.

Other strategy frameworks:

Additional resources:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a 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 The FourWeekMBA Flagship Book "100+ Business Models"