Instagram's visual format and focus on mobile has proven to be an addictive combo to its 1.21 billion monthly active users – and a marketing goldmine for brands and businesses.
Despite its potential as an advertising channel, it's easy to waste money on creating Reels, Stories or IGTV ads that nobody sees.
To help you make the most out of your Instagram ad spend, we've created a full guide to Instagram advertising costs.
Read on to find out everything you need to know about how much it costs to advertise on Instagram and the different factors that can influence your Instagram advertising cost – complete with actionable tips on how to get more bang for your buck.
Is it worth advertising on Instagram?
Yes, Instagram advertising is worth it, and it offers unique advantages as an advertising platform, including the following:
- Reach millions of highly engaged users: Over 500 million people use Instagram every day, with 80% of users following at least one business.
- The power of visual content: A recent study showed that posts with images received 650% more engagement than those without. In addition, video content has also surpassed all other forms of content in terms of popularity, and both video and images are Instagram's core content format.
- Hashtags make content discoverable: Hashtags are a key feature of Instagram, used by users to discover relevant content. The use of hashtags can help increase the reach of your content significantly.
- A host of advertising and marketing tools: There are a range of features and tools available on Instagram to help businesses with their marketing efforts, from business profiles and analytics to shoppable posts. All of these make it easy to set up and run successful advertising campaigns on the platform.
In short, Instagram advertising can be a powerful pillar in any business's marketing strategy – but only if it's done right.
How much do Instagram ads cost?
Instagram and Facebook may use the same Ads Manager, but the cost of advertising on the two platforms can vary significantly.
There are a number of factors that will affect the price of Instagram ads, including the following:
1. Targeting
Targeting refers to the process of defining your audience, aka who you want to show your ads to. For instance, Instagram allows you to target users based on interests, demographics, behaviors and even specific locations.
The more narrowly you target your audience, the less competition there will be for ad space, and the lower your costs will be.
2. Audience size
Whether you're advertising on Facebook or Instagram, expect your ad spend to be bigger if you want to reach a bigger audience. That's because you'll be paying for the platform to show your ads to more people.
3. Industry competition
The amount you spend on Instagram ads will also be affected by the level of competition in your industry. Let's take fashion, for instance. There are tons of both big and independent clothing labels trying to corner the market on Instagram. To stand out in such a saturated market, you'll typically need to run more ads, invest more money in content creation, and be more strategic with your targeting. All of which will increase your costs.
4. Advertising objectives
Generally speaking, ads that are designed to get users to take a specific action – such as making a purchase or signing up for a newsletter – will cost more than ads that are simply meant to increase brand awareness. That's because businesses are willing to pay more for ads that directly result in a conversion.
5. Time of year
The time of year can also affect how much you spend on Instagram ads. For example, costs typically go up during the holiday season as businesses compete for ad space to promote their seasonal sales and deals.
6. Ad placements
Instagram offers a variety of ad placements, from Stories and the Explore page to the general feed. The cost of each placement varies depending on a number of factors, including the size of the audience you're targeting and the competitiveness of your industry.
7. CTR
Finally, the cost of Instagram ads is also affected by your click-through rate (CTR). CTR is a metric that measures how often people who see your ad end up clicking on it.
The higher your CTR, the lower your costs will be because you're proving to Instagram that your ads are relevant and engaging. A low CTR, on the other hand, will result in higher costs because it tells Instagram that your ads aren't performing well.
To give you a more concrete understanding of how these factors affect ad costs, let's look at some figures:
- The average cost-per-click (CPC) for Instagram ads is $0.70
This means that for every click your Instagram ad gets, you can expect to pay at least $0.70. But if you're a player in competitive industries, such as food and apparel, every click will be more expensive.
That's simply because the stronger the competition, the harder it gets for people to click on your ads – which means every click becomes more valuable, too. In fact, CPC for clothing industries can hit as much as $3.00 per click.
- The average cost-per-thousand impressions (CPM) for Instagram ads is $6.70
CPM refers to the cost of having your ad seen by 1,000 people. The average CPM for Instagram ads is $6.70, but it can be higher or lower depending on your audience size, the level of competition in your industry, and other factors.
To give you a better idea of how these numbers compare to Facebook advertising, the average CMP for Facebook is $7.19.
So, as you can see, Instagram ads tend to be slightly cheaper than Facebook ads – although the difference is not significant.
Still, you'll want to keep your Instagram ad spend as low as possible without compromising on quality or results. This all comes down to your strategy.
How to keep Instagram advertising costs under control
How well you set up your Instagram advertising campaign has a huge impact on how much you end up spending. To keep your costs under control, there are a few key things you need to do. Here are some of them:
1. Define your advertising objectives
The first step is to clearly define your advertising objectives. What exactly do you want your Instagram ads to achieve? Do you want to increase brand awareness, drive website traffic, or promote a specific product?
Your answer will determine the ad type you create, your target audience, and your budget. For example, if you want to promote a new product, you'll need to create a video or image ad that shows off the product and includes a call-to-action (CTA), such as "Learn More" or "Buy Now."
Choosing the wrong objective will derail your entire campaign and cause you to waste money on ads that don't work. So, before you do anything else, take the time to think about what you want your Instagram ads to achieve.
2. Fix your spending beforehand
One of the best ways to save money on Instagram advertising is to put a strict limit on your ad spend. This means defining how much you're willing to spend on each ad, as well as your overall daily or monthly budget.
You can do this by setting a lifetime budget for your entire campaign or a daily budget for each ad set. If you choose the latter option, Instagram will automatically stop showing your ads once you've reached your daily budget. This ensures that you don't overspend and helps you keep better control of your ad spend.
3. Create a social media advertising plan
Once you know what you want to achieve with your Instagram ads, it's time to create a social media advertising plan. This will help you map out your ad strategy and ensure that your campaigns are aligned with your overall marketing goals.
Your social media advertising plan should include the following:
- Your target audience: Who are you trying to reach with your ads?
- Your budget: How much are you willing to spend on Instagram advertising?
- Your objectives: What do you want your ads to achieve?
- Your ad format: What type of ad will you create?
- Your call to action: What do you want people to do when they see your ad?
- Your content strategy: What kind of content will you use in your ads?
- Your timing: When will you run your ads?
Answering these questions will help you create an Instagram advertising strategy that's focused and makes the most of each platform.
4. Get your targeting right
Again, your targeting strategy can make or break your Instagram ad spend. The key is to get as specific as possible with your targeting. Before you can do this, you need to build a clear picture of your ideal audience persona.
To do this, you need to consider things like age, gender, location, interests, and behaviors. Go as detailed as you can. For example, instead of saying your audience are "young people," you might say "people aged 18-24 who live in the United States and are interested in minimalist fashion."
Once you've built your persona, you can use Facebook's ad targeting tool to reach them with your Instagram ads. This tool allows you to target people based on their demographics, interests, behaviors, and even life events, down to the type of device they're using.
The more specific you can be with your targeting, the better. That's because you'll waste less money on ads that are shown to people who are not interested in what you're selling.
5. Concentrate on great visual storytelling and brand marketing
Instagram is all about eye-catching visuals. The problem? It's difficult to make people stop scrolling long enough to pause and look at your ad.
To cut through the noise, you need to create visuals that are both attention-grabbing and informative. For example, if you're promoting a new product, forget about simply showing a picture of the product with a list of features. You need to be creative.
One way to do this is by creating a video that tells a story. For example, you could create a short video that shows someone using your product in their everyday life. Or, you could create an animation that brings your product to life. Try using influencers that you know your audience follows and whose content they enjoy.
The more original your ad, the more likely it is to stand out and make an impact.
6. Never stop testing and experimenting
Advertising is both an art and a science. While it's important to anchor your campaign on proven ad frameworks, it's equally critical to explore beyond that. Remember, you're selling to humans, not to robots. And humans are notoriously difficult to predict.
To stay ahead of the curve, you need to continually test and experiment with new ad formats, targeting strategies, and creative ideas.
Over time, you'll develop a sixth sense of what works and what doesn't. But it takes time and effort to get there.
So don't be afraid to try new things.
One essential tip: make sure you're always testing different versions of your ad against each other. This process is called A/B testing, and it's essential for helping you optimize your campaigns and get the most out of your ad spend.
7. Use automated rules
Unless you have nothing better to do, there's no need to check the performance of your campaigns, ad sets or ads manually every day. Instead, you can use automated rules to do this for you and take appropriate actions.
This feature is available in Facebook Ads Manager and allows you to specify the conditions under which certain actions should be taken.
For example, you could create a rule that automatically pauses an ad set if it's not meeting your specified ROAS goals.
To use this feature, simply go to the Automated Rules tab in Ads Manager and click 'Create Rule.' From there, you'll be able to specify the conditions under which the rule should trigger and what actions should be taken.
Remember, the goal is to save time and money by making your reporting process as efficient as possible. So take advantage of automated rules and free up some time in your schedule.
8. Understand Instagram bid strategies and use them appropriately
When it comes to bidding on Instagram, you have three options: spend-based, goal-based, and manual.
Spend-based bidding is the simplest option, and it basically means that you're willing to spend a certain amount of money per day on your ads. The downside of this approach is that you have no control over how much you'll spend on each individual ad.
Goal-based bidding, on the other hand, allows you to set a specific goal for your ad campaigns, such as a certain ROAS or CPA. With this approach, Instagram will automatically adjust your bids in order to try and meet the goal you specified.
Finally, there's manual bidding. This gives you the most control over your ad spend, but it requires a bit more work on your part. With manual bidding, you'll need to set a bid cap for each ad that you run.
The best approach for you will depend on your specific goals and objectives. But in general, we recommend starting with goal-based bidding and then experimenting with manual bidding if you want more control over your ad spend.
9. Use social proof to boost your ads
Social proof is a powerful psychological phenomenon that occurs when people copy the behavior of others in order to fit in or feel like they belong.
In the context of advertising, social proof can be used to make your ads more persuasive and effective. For example, if you're selling a product or service, you could include customer testimonials in your ad copy.
Or, if you're promoting an event, you could use social proof by featuring a celebrity endorsement. The point is that people are more likely to take action if they see that other people have done it first. So if you want to make your ads more effective, find ways to incorporate social proof into your ad copy and content.
10. Segment your ads by placement
When running ads on Instagram, you have the option to choose where your ad will be placed. You can choose between the Instagram feed, Stories, and Explore. Again, you'll need to experiment here. But in general, we recommend segmenting your ads by placement and running separate ads for each one.
The reason for this is that people use these different platforms in different ways. For example, someone scrolling through their Instagram feed is likely to be in a more passive mindset than someone who's actively looking for something on Explore.
So, depending on your placement, Instagram sponsored ads cost more than other types of ads but may be more effective at the same time. You'll need to do more testing to see which placement fits your campaign best.
11. Optimize your landing pages
Once your Instagram ads are ready, don't forget to optimize your landing pages accordingly. Once someone clicks on your ad, they should be taken to a landing page that's relevant and consistent with the ad they just saw. Otherwise, you'll lose an opportunity to nudge them closer to becoming a customer.
And the same goes for landing pages - always be testing and learning, are there opportunities to improve your conversion rate on the landing page?
Track, measure and improve your Instagram Ads
Finally, keeping your Instagram ad spend down involves keeping a close eye on your analytics and reporting.
This way, you can quickly catch and stop ads that aren't performing well. Similarly, you'll be able to identify successful ads and replicate those results.
Reporting Ninja's powerful software makes it easy to track, measure, and improve your Instagram ads thanks to our ads integration tool. So if you're looking for a way to save time and money on your reporting, sign up for our free trial today.
