What does the PESO model look like in five years? 3 key takeaways from the recent USC Annenberg Center for PR Study
PESO. In case you haven’t heard, that’s Paid-Earned-Shared-Owned.
It’s the acronym that has come to define our generation of marketing and communications. But, it’s also a model in constant flux.
Ask today’s CEO what the PESO model looks like in five years, and here’s what they will say (according to the USC-Annenberg Center for Public Relations):
Now, there’s a few things I find interesting about this graphic:
- Just 12% for paid media? That doesn’t exactly jive with paid media budgets now does it? Then again, this is focused on PR and comms–I have a feeling CEOs are thinking about it from a PR perspective, not an advertising/marketing perspective. That’s a problem–we’ll come back to this.
- 38% shared media–without paid amplification, shared media these days isn’t really equating with a wide reach or big engagement numbers.
- And just 14% for earned media. This must be concerning for PR folks my age and older who grew up with earned media as a cornerstone of any comms or corporate comms team.
What do in-house communicators and agency folks think about the future of the PESO model?
Again, a few interesting takeaways:
- Agency folks, rightfully, see a decline in media relations budgets and work. But, no huge increase in owned media? That seems like territory they can and should own–big time.
- Not much fluctuation for in-house folks. In fact, they barely see earned media dipping at all (just 3%), while CEOs saw that as a minimal piece of the PESO model in the future. Big disconnect there.
- Similarly, in-house folks see owned media going DOWN in five years? Given all the stats and survey data we’ve seen lately about owned media, and the fact that social platforms like Facebook are on shaky ground lately, I find this confounding. I would have thought that number would have suggested a 10% increase AT MINIMUM.
As I thought more about this data, I see three big trends in the way CEOs, agency partners and in-house communicators think about the future of the PESO model:
CEOs seem largely out-of-touch with modern PR tactics–either that, or PRs are doing a lousy job of educating their executive partners. CEOs see shared media as one of the two clear winners in the future of the PESO model. Yet, in 2019, shared media (sharing on social channels) is largely (or almost completely) a paid media activity. Shared media is essentially a waste of valuable time at this point–yet CEOs think it’s the biggest area of opportunity for their comms teams in the future. Folks, that’s a HUGE problem.
While agency partners are smart to see the writing on the wall re: media relations and those shrinking budgets, they don’t see a big opportunity to gobble up more owned media dollars (or, paid media dollars, for that matter). PR/comms agencies are well-suited to earn this work–but, they don’t seem confident they will. Why? Maybe it’s because that work is going to any number of other agencies–digital, ad, social media. Or, maybe it’s because they don’t think they have the talent to pull it off–and talent is in short supply these days. Similarly, I’m surprised agencies don’t see a big opportunity with paid media either–just a 3% increase in the next five years? There’s a lot of money to be had in the paid media racket right now, and PR/comms shops seem to be saying “thanks, but no thanks.” Weird.
A 2% decrease in owned media? Just a 3% decrease in earned media? And paid media seeing just a 1% increase? To me, this is reflective of the attitudes and perspectives of the Baby Boomers who still run today’s in-house PR/comms teams. That attitude is (in my view): Earned media is still pretty important; I’m still unsure about “owned” media; and paid media isn’t out thing–someone else should be doing that. I don’t disagree that earned media still has a place, but the views on owned and paid media are hugely short-sighted and may lead to shrinking corp comms teams in the years ahead. After all, if you’re not adept at creating owned content and amplifying it, that’s a big chunk of work you’re leaving on the table–work that some other team will certainly gobble up.
I read some pretty damn surprising stats recently in a Content Strategist post. The post outlined the success the New York Times brand studio (T Brand Studio) is having with their custom advertising content (referred to as “paid posts”).
* When measured against Paid Posts created by third-party advertisers, T Brand Studio-produced content was found to generate 361 percent more unique visitors and 526 percent more time spent with the post.
* When evaluated against editorial content—articles with no advertiser affiliation at all—some T Brand Studio Paid Posts incited as much engagement as high-performing articles that run on nytimes.com.
And then, this one:
* BI Intelligence and the Interactive Advertising Bureau report that native advertising will generate $21 billion in ad spending by 2018—more than four times that of 2013.
So let me get this straight. You’re telling me sponsored content is “performing” (i.e., getting shared/read) as well as some editorial content on NewYorkTimes.com. And, native ad budgets will basically quadruple in the next few years.
And, it could be big trouble for PR.
First, read through these “paid posts” the T Brand Studio is putting together. They are fan-freaking-tastic (you can read the one titled “Grit and Grace” sponsored by Cole Haan here, and the one titled “Women Inmates: Why the Male Model Doesn’t Work” sponsored by Netflix here). No, they’re not written objectively, but they read very much like a news story you’d see in the paper. And, they’re both really interesting.
These kinds of posts continue to gain traction with readers. We’ve seen differing stats on the “effectiveness” of native advertising. And, we’ve seen many different formats for native advertising.
But, this level of native advertising is different. It’s sophisticated. It’s engaging. It’s using different media (note the videos in both pieces). It’s great storytelling written by professional multi-media storytellers (or, in this case, media “studios”).
And, as those consumer perceptions continue to evolve, the power of PR may evolve with it.
Here’s my thinking.
If you’re a big company, your “PR goals” usually revolve around a few different things (generally speaking, of course):
* Building awareness
* Changing/maintaining tonality or share of voice
* Driving leads
One PR strategy that gets at those goals revolves around media relations. Getting placements. Showing up in The New York Times. That sort of thing.
So, PR agencies and consultants spend tens and thousands of dollars trying to capture just that–a placement in The New York Times. The coup de grace of the PR world. Editorial coverage in one of the most respected publications in the world.
And why? Because of the trust The New York Times has with readers. Because it is respected. Because an article in The New York Times holds value.
But, getting that article in The New York Times isn’t guaranteed. We all know that. If you work in PR, you know you can’t guarantee placements.
But, what if you could?
What if you could pay X amount of dollars and get an article that would essentially do the same thing as the editorial coverage you were chasing?
How much would you pay for that?
Would that be more or less than the PR agency you’re hiring?
See where I’m going with this?
If native advertising, like the posts by Netflix and Cole Haan above, continue to gain more trust, the line will blur. And, those native stories created by content studios like T Brand Studios may end up becoming more and more attractive to brands looking for that “guarantee.”
Think about it from the brand side.
You have a big product launch coming up. A story in The New York Times would go an awful long ways. But, as the PR shop tells you, nothing is guaranteed.
Except, if you hire an agency like T Brand Studios, it actually COULD be guaranteed (and maybe for a lower price point). You could have a story in The New York Times. Sure, it would be sponsored content. But, audiences may not care about that as much as we once thought. And engagement rates are similar between sponsored content and editorial coverage anyway (according to their reports). And again, the content would be GUARANTEED.
So you tell me. What would you do? Isn’t the PR world in a little bit of trouble here?
A recent report from the folks at Edelman last week got me thinking about how we approach and work with our colleagues on the media side.
As our world has changed the last number of years, so has the media world. No big epiphany, right?
But, how often do you actually think about how those changes that are shaking up their world impacts the way you pitch these “modern journalists?”
Note: I couldn’t resist using this pic of two of my local favorite reporters/anchors, Jason DeRusha and Jamie Yuccas (courtesy of Jamie Yuccas’ Twitter account).
Let’s take a look at a few key stats from the Edelamn/Muck Rack study and talk about what they mean for US on the PR side of the coin:
Stat: More than 75 percent of journalists say they feel more pressure now to think about their story’s potential to get shared on social platforms.
What it means for PR: Like it or not, these numbers are likely to drive even higher in the coming years as media outlets continue to favor shareability of stories online. Again, no big surprise–we’ve seen this trend coming the last couple years. But, have you thought about how this impacts you and what you can do to help? As PR folks, we sometimes have a better handle on what gets shared online. Why not give our media friends a few ideas on items that might drive those clicks and shares online? Suggest positioning a certain article as a “How to” post. Point out a key stat that might work well in a headline. The key is not to over-step your boundaries. Journalists get paid to write objective stories. You just want to make sure you’re not telling them how to do their jobs.
Stat: Nearly 3/4 of journalists are now creating original video content to accompany their stories. However, very few journalists (13 percent) are relying on sourcing consumer-generated video and only 3 percent are using corporate video.
What it means for PR: The age of B-roll is slowly dying. Sure, it works in spots, but according to the stats in this study, more journalists are shooting their own video–probably more so than ever before. So, instead of wasting your time capturing your own corporate video to use in pitches (to be clear, I’m not suggesting you move away from video–just b-roll-type video), why not make suggestions to the journalist about video they can capture on their own? Then, do your best to make that process as easy as possible. It’s all about facilitating–instead of producing the video yourself.
Stat: Non-legacy media publishers make up the majority of the most-engaged sites on Facebook (top sources: The Huffington Post, BuzzFeed, Mashable, PlayBuzz).
What it means for PR: Again, no big surprise here that HuffPo, Mashable and Buzzfeed are among the more shared media properties on the social web. What is surprising is how often PR counselors can minimize the power of these more non-traditional sites and outlets. For example, did you know Buzzfeed publishes honest-to-goodness news? And, they have a business section? Would it be worth adding Buzzfeed to your national lists? Or, what about thinking creatively? Is there a way for you to pitch your client as part of one of the popular Buzzfeed lists, as my friends at Life Time Fitness did last year?