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.
However, the marketing landscape evolved with the rise of social media and digital platforms, which prompted the development of the PESO model. Gini Dietrich introduced the PESO model (Paid, Earned, Shared, Owned) to reflect the growing influence of Shared Media, user-generated content and social media interactions. Here’s how PESO works:
- Paid Media: Same as in the traditional PEO model.
- Earned Media: The same as in PEO, but with more emphasis on social mentions and media coverage.
- Shared Media: Content shared via social media, whether through organic shares, retweets, or mentions. Shared media recognizes the power of social connections and word-of-mouth.
- Owned Media: Content that brands fully control.
While PESO was an important refinement, the rise of platforms where brands do not own the audience, but rent access (e.g., Facebook Ads, Instagram, Google Search) became increasingly prominent. This led to the development of the PERO model.
The PERO model (Paid, Earned, Rented, Owned) took the PESO concept further by recognizing Rented Media as a distinct category. In this model:
- 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 that allow brands to rent access to large, engaged audiences.
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 more comprehensive view of modern marketing media for the following reasons:
- Inclusivity of Rented Media: With social media platforms, websites, and even Google Ads, businesses rent access to vast, engaged audiences. By distinguishing rented media from owned 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.
- 40% Owned Media: Your website, blog, email lists, and social media channels are essential for building long-term brand value and customer loyalty.
- 30% Paid Media: Paid ads (Google, social media, display ads) are perfect for driving immediate awareness and conversions.
- 20% Earned Media: Earned media includes PR, influencer mentions, and organic social media coverage. This type of media helps build credibility and trust.
- 10% Rented Media: Platforms like Facebook, Instagram, and Google Ads allow you to reach new audiences, but remember, you don’t own these platforms, and they can change their algorithms at any time.
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.