Marketing has always been about getting the right message to the right audience at the right time, but as the landscape evolves, the way we think about marketing media has shifted. Traditional models like Paid, Earned, and Owned (PEO) helped marketers streamline their strategies. However, as social media platforms and digital ecosystems have grown in influence, there’s now a need for a more comprehensive model. Enter the PERO model: Paid, Earned, Rented, and Owned media.
PERO Marketing Media Type Model with suggested starting point allocation (40% Paid, 30% Earned, 20% Rented, 10% Owned).
The History of Marketing Media Types
Marketing strategies have long relied on clear distinctions between different types of media. Historically, the Paid, Earned, and Owned model (PEO) served as the backbone for marketers’ media allocation strategies:
- Paid Media: This includes all forms of advertising that require a budget, such as Google Ads, social media ads, and influencer marketing.
- Earned Media: Media coverage you earn through organic PR, media mentions, and social media shares. It’s the most credible type of media because it’s not directly controlled by the brand.
- Owned Media: Content and platforms that you fully control, such as your website, blog, and social media profiles.
As digital and social media platforms grew in prominence, the PESO model (Paid, Earned, Shared, Owned) was introduced by Gini Dietrich to better account for the growing importance of Shared Media, content generated by users and amplified through social interactions. PESO captured how brands should leverage these types of media:
- Paid Media: Paid advertising, such as Google Ads or social media ads.
- Earned Media: Media coverage earned through PR, mentions, and organic social shares.
- Shared Media: Content shared through social media, including organic shares and user-generated content.
- Owned Media: Content that brands fully control, such as websites and email lists.
PERO takes the PESO framework a step further by adding Rented Media as a distinct category. As social media and digital platforms have grown, brands increasingly rely on these third-party platforms where they ‘rent’ access to large, engaged audiences, making Rented Media a crucial part of modern marketing strategies.
This led to the development of the PERO model, which introduces Rented Media as a distinct category to reflect the increasing reliance on third-party platforms.
- Paid Media remains the same.
- Earned Media continues to reflect organic PR and social mentions.
- Owned Media still refers to what the brand controls.
- Rented Media was introduced to account for the increasing reliance on third-party platforms where brands rent access to large, engaged audiences without owning the platform. These platforms, such as Facebook, Instagram, and TikTok, allow you to engage with audiences but you don’t control the platform or its data.
The PERO model helps marketers understand the full scope of modern marketing media, balancing long-term investments in Owned media with the more immediate, but sometimes volatile, benefits of Rented media.
Why the PERO Model is a Better Approach
The PERO model offers a comprehensive view of modern marketing media for the following reasons:
- Inclusivity of Rented Media: With social media platforms, websites, and other third-party services, businesses rent access to vast, engaged audiences. By distinguishing Rented media from Paid and Earned assets, the PERO model helps marketers understand how to strategically use these platforms without becoming overly dependent on them.
- Balanced Resource Allocation: The model encourages a balanced approach to media allocation. Paid media gives you immediate results, while Earned media builds credibility and Owned media nurtures long-term customer relationships. Rented media serves as a short-term solution to expand your reach.
- Clarity in Strategy: By separating Rented media from the rest, marketers can treat it as a tool for reaching specific audiences, understanding that it can change or disappear (platform shutdowns or policy changes), unlike owned assets.
Suggested Media Allocation: 40/30/20/10 Breakdown
A common approach to allocating your marketing budget across Paid, Earned, Rented, and Owned media is the following 40/30/20/10 breakdown. This is a starting point and should be adjusted based on your experience, goals, business size, and industry.
Below is a quick reference table that breaks down the most common types of media within the PERO model: Paid, Earned, Rented, and Owned. This will help you understand how different marketing activities fall into each media category, enabling you to better allocate your marketing resources.
| Paid | Earned | Rented | Owned |
|---|---|---|---|
| Google/Bing Ads | Media Mentions | Facebook, Instagram, TikTok, YouTube, X (Twitter) | Website |
| Social Media Ads | Organic Social Shares | Online Communities (Facebook Groups, LinkedIn Groups, Reddit) | Blog |
| Display Ads | Public Relations (PR) | Influencer Partnerships (on rented platforms) | Email List |
| Sponsored Content | Influencer Mentions | Organic Social Media Posts (not paid for) | Customer Databases |
| Affiliate Marketing | User Reviews | Display Ads on Third-Party Sites | Mobile App |
| Remarketing Ads | Word-of-Mouth | Social Media Engagement (Likes, Shares, Comments on Platforms) | Content Libraries |
- 40% Owned Media: Long-term assets like your website, blog, and email list that are crucial for building brand loyalty.
- 30% Paid Media: Immediate results and conversions through paid ads across platforms like Google and social media.
- 20% Earned Media: PR, influencer mentions, and organic social media to build credibility and trust.
- 10% Rented Media: Platforms like Facebook, Instagram, and TikTok offer short-term reach, but remember that control can change.
B2B vs. B2C: Tailoring the Model for Your Business
B2B and B2C companies may adjust these percentages based on their specific goals:
- B2B: Owned Media (like white papers, case studies, and professional blogs) may take up a larger portion of the budget, while Paid Media may focus on LinkedIn Ads and other professional networks.
- B2C: Paid Media plays a more significant role, with a higher allocation to ads on platforms like Facebook, Instagram, and Google to drive direct sales.
Flexibility is Key
The PERO model is a flexible framework that can be adjusted based on business size, goals, and market conditions. Continuous testing and optimization of media allocation will allow you to fine-tune your strategy over time.