This week marks the conclusion of a four-month, six market social media beta test designed and delivered by the Pellet Fuels Institute. Our test was a first step towards attempting to answer the question of whether the PFI could, by itself, impact the number of pellet appliances sold in the United States. Over the next month, our team will conduct interviews with our participating retail partners hoping to answer that very question.

Still, there is data to parse, review and analyze right now. The one that jumps off the page for me is the number of unique clicks generated during the test, 2972. Interestingly, the total ad-spend with Facebook and Instagram over the course of the test was just under $3,000 which brings us roughly to $1 paid to achieve one click. As a reminder, the social media beta test featured imagery and short messaging about pellet appliances delivered to users in one of six test market areas connecting those consumers (if they clicked on the provided link) to our partner retailers in that market. Other data points were measured during the test and are certainly worth a mention.

During the beta test over 185,000 different individual users were reached with our ads, generating over 2.8 million impressions (one person seeing our ad 10 different times yields 10 impressions). Each of those is interesting to consider but the “click-through” number is the heart and soul of social media advertising efforts. A click through is understood to be an indication of interest. How much interest? Enough to spend a few seconds clicking through for more information.

For the PFI, our best-case scenario is our pellet heating image is displayed to a consumer who is currently thinking about investing in a new primary or secondary space heating option. Via the magic of the internet, they scroll by the pellet heating ad we’ve paid to have placed in their feed and they stop. Intrigued, they click through to learn that they can buy a pellet appliance just down the road from where they live. The next weekend, that consumer walks through the front door of our retail partner and when approached by someone at the store asks simply, “What can you tell me about pellet appliances?” From there, the retailer takes over and the consumer decides upon a pellet appliance to satisfy their heating needs. The story, of course, does not always unfold that way. In fact, it usually does not but in the same breath, it’s hard to believe that it never happens either. The question for the PFI, its retail partners and sponsoring members to work to answer though is, does it happen enough?

I’ve run this back of the envelope calculation several times over the last week. The 3000 impressions were nearly evenly distributed across our 6 test markets, meaning we generated 500 click-throughs per market at a cost of $500/market. Assuming five percent of those click-throughs ultimately leads to a visit to our retail partner we’re looking at 25 potential customers. Using a five percent conversion rate again, those 25 store visits would ultimately yield one appliance sale. If that appliance burns two tons of pellets per year at an average price of $275/ton that one pellet appliance sale generated $11,000 in pellet sales over the next twenty years.

My envelope math is loaded with assumptions, the accuracy of which is anyone’s guess. In our follow up interviews we’ll ask our retail partners to weigh in on our assumptions. Are they reasonable? Too optimistic? Too conservative? Our social media beta test is already driving us to ask questions informed by real experience gleaned via a live effort. Without the test, we’d still be stuck in the unenviable position of not even knowing what we don’t know.

—Tim Portz
Executive Director