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Instagram Ads Cost: What You Need to Know

Fatjon Kabashi

Head of Social Media

Instagram Ads Cost: What You Need to Know

In today’s digital age, mastering the art of Instagram advertising is not just a skill but a strategic imperative for businesses seeking to reach their target audience effectively. With Instagram’s extensive reach, diverse ad formats, and ever-evolving features, it’s a goldmine for marketers. This article serves as your comprehensive guide, unveiling the secrets to crafting Instagram ads that captivate, engage, and drive results. Join us on this journey as we explore the intricacies of Instagram advertising and equip you with the tools to create compelling ad campaigns that stand out in the crowded social media landscape.

Understanding Instagram Ads

How do Instagram advertisements function? Depending on the goal of your advertising campaign, Instagram ads offer a variety of up to 18 call-to-action buttons. They can direct users to your website, enable them to download apps or facilitate online shopping.

 

Interestingly, you don’t necessarily require an Instagram account to advertise on the platform. Since Instagram is owned by Facebook, having a Facebook Business Page is sufficient. It is advisable to have an Instagram account. This will allow you to become familiar with the type of content that resonates most effectively with your target audience and enhances your organic Instagram marketing efforts.

 

To set up Instagram Ads, use Facebook’s Ads Manager. Through this tool, you can establish campaigns and define ad sets that include budget allocation, target audience selection, ad placement, and optimization preferences. Much like Facebook Ads, your advertisements will run according to the designated time frame, budget parameters, audience targeting, and optimization objectives.

How Much Do Instagram Ads Cost?

Let’s delve into the average expenses associated with Instagram advertising, including the cost per click (CPC), cost per engagement (CPE), and cost per thousand impressions (CPM).

Instagram Cost Per Click (CPC)

The cost per click (CPC) for Instagram typically falls within the range of $0.40 to $0.70. This encompasses all clicks that occur on an ad, encompassing not only link clicks but also interactions such as likes, reactions, comments, and shares.

 

For ads that include a destination URL, the Instagram cost per click ‌varies between $0.50 and $0.95.

Instagram Cost Per Engagement (CPE)

Instagram’s cost per engagement (CPE) ‌falls within the range of $0.01 to $0.05.

Instagram Cost Per Thousand Impressions (CPM)

The cost per thousand impressions (CPM) on Instagram typically ranges from $2.50 to $3.50 for campaigns and ad sets that perform well.

 

It’s noteworthy that in terms of CPM, our findings indicate Facebook tends to have higher costs compared to Instagram, often nearly twice as much. Conversely, CPCs are generally lower on Facebook, often approximately half the cost of Instagram. These variations in costs highlight the differences in advertising dynamics between the two platforms, with Instagram offering competitive CPM rates but slightly higher CPCs in comparison to Facebook.

 

Cost Factors of Instagram Ads

The cost of running Instagram ads varies depending on several factors, including your overall budget, campaign duration, and set objectives. You have the flexibility to set a daily or lifetime budget for your Instagram ads, giving you control over your expenditure. While there’s no one-size-fits-all budget recommendation, Meta suggests a minimum daily budget of $5.00 to start with.

 

Here are some key factors that influence the cost of your Instagram ads:

Audience Targeting: The specificity of your audience targeting.
Industry Competitiveness: How competitive your industry is on Instagram.
Seasonal Variations: Costs can rise during peak holiday shopping seasons like Black Friday.
Ad Placement: Costs may differ between Facebook and Instagram placements.


As a newcomer to Instagram advertising, it’s advisable to begin with a modest maximum bid to gain valuable experience. Once you’ve gathered insights into your industry and demographics, you can consider adjusting your maximum bid accordingly.

 

To determine an appropriate budget, create a draft campaign in the Instagram Ad Manager and consult the Audience Definition and Estimated Daily Results modules. These tools will help you assess whether your budget aligns with your campaign objectives.

What Justifies The Cost Of Instagram Advertising?

Instagram advertising offers several advantages that make it a worthwhile investment, distinct from running campaigns and promotions directly from your business’s account.

Advanced Targeting

Instagram boasts over 1 billion monthly users, second only to Facebook. Both platforms possess a robust set of targeting data. Since Facebook owns Instagram, the advertising on Instagram benefits from the same comprehensive demographic and geographic data. This advanced targeting capability is a key factor in the success of Facebook Ads. 

It allows you to be highly specific when targeting diverse audiences. Whether you are using Facebook’s predefined audiences based on interests, behaviors, or other demographics, or crafting your own custom audiences using tools like Pixel or SDK, email lists, or other sources, you can effectively reach the right people in your prospecting and retargeting campaigns.

Higher Engagement

Rates: Instagram is renowned for its high engagement rates, both organically and through paid ads. Images posted on Instagram receive an average of 23% more engagement compared to when they are shared on Facebook. In terms of organic engagement, brands on Instagram report that approximately 4% of their followers see their content, in contrast to Facebook’s almost non-existent organic reach today. 

While organic engagement is better on Instagram, investing in paid ads is a wise choice to expand your reach and visibility. Visual content, particularly video ads, typically generate about 38% more engagement. Instagram’s visual nature makes it a potent platform for driving engagement compared to text-heavy social platforms.

External Links

In organic Instagram posts, clickable links are not allowed. You can include a link in your caption or message, but users need to manually copy and paste it into their browsers or visit the link in your Instagram bio. 

With Instagram advertising, you have the option to include external links, allowing you to direct users to your website or another external URL. To effectively track website traffic from your Instagram Ads, it’s advisable to use your own domain, where you likely have your Pixel implemented, whereas other website URLs that you don’t control might lack this tracking capability.

Longer Videos

Instagram permits longer video durations in various ad placements. In the Instagram Feed and Explore sections, videos can be up to 60 seconds long, while Stories typically allow up to 15-second videos. When running ads in these placements, you can have up to 2 minutes of video content. This extended video duration provides more opportunities to convey your brand’s message and highlight the features and benefits of your products or services.

Diverse Types of Instagram Ads

Instagram offers a diverse range of ad formats to cater to various business goals. These include:

  • Image Ads: Ideal for showcasing products or services using single images.
  • Story Ads: Full-screen image or video ads that appear between users’ Stories.
  • Video Ads: Engaging and eye-catching videos that can demonstrate product features or brand stories.
  • Carousel Ads: Series of swipeable images or videos, often used to display related products.
  • Collection Ads: Combining carousel and shopping ads, allowing users to purchase products directly from the ad.
  • Explore Ads: Displayed within the Explore tab, offering exposure alongside trending content.
  • Reels Ads: Advertisements featured within Instagram Reels, provide an immersive experience.
  • Shopping Ads: Designed for e-commerce, these ads enable in-app product viewing and purchasing.

The variety of options ensures you can choose the ad type that best aligns with your business objectives. Each ad type comes with specific call-to-action options tailored to your campaign’s goals.

Step-by-Step Guide on Creating Instagram Ads

There are two primary methods for creating Instagram ad campaigns: boosting an existing post and using the Meta Ads Manager (formerly Facebook Ads Manager) to create a new ad. We’ll guide you through both approaches.

Method 1: Using Instagram Boost

The simplest way to advertise on Instagram is by promoting an existing post. This method resembles Facebook’s Boost Post feature. To get started, ensure you have a business or creator account linked to a Facebook Business Page. Follow these steps:

  1. Select a post with a high engagement that you wish to promote.

  2. Click “Boost Post” on the chosen post.

  3. Choose your objective: more profile visits, more website visits, or more messages.

  4. Define your audience, either automatically or manually.

  5. Set your daily budget and campaign duration.

  6. Review your ad and click “Boost Post” to launch it.

Method 2: Using Ads Manager

For more extensive customization and control over your Instagram ads, you can opt for the Meta Ads Manager. Here’s a step-by-step guide:

  • Step 1: Create a new Instagram ad campaign for Meta Ads Manager.
  • Step 2: Choose your campaign objectives, such as awareness, traffic, engagement, leads, app promotion, or sales.
  • Step 3: Name your campaign for easy tracking.
  • Step 4: Set your budget and schedule, whether daily or lifetime.
  • Step 5: Define your target audience, either using saved audiences or creating a new one.
  • Step 6: Choose your ad placements, either Advantage+ or Manual Placements.
  • Step 7: Create your Instagram ad by customizing elements like images, videos, headlines, and CTAs.
  • Step 8: Publish your Instagram ad.

6 Proven Instagram Ad Tips

Now that you have the know-how to set up Instagram ads, let’s focus on crafting compelling visuals for your ads. Here are six tips for designing attention-grabbing creative:

  • Design for Mobile: Given that most social media users access platforms via mobile devices, create mobile-first ads. Film in vertical format for videos, minimize text, use large fonts for readability, incorporate animations, and keep videos concise (15 seconds or fewer).
  • Emphasize Branding: Capture viewer attention immediately by showcasing your branding and key message within the first 3 seconds of your ad.
  • Sound Considerations: Given that a significant portion of users consume social media content with sound off, design ads that can convey your message visually. Add captions and text overlay to ensure message delivery even without sound.
  • Pitch, Play, Plunge: Create a mix of short, attention-grabbing assets (Pitch), interactive content for interested audiences (Play), and immersive experiences (Plunge) to engage viewers effectively.
  • Diverse Ad Types: Experiment with various ad types, including video ads, Story ads, carousel posts, collections, shoppable posts, and more, to resonate with your target audience.
  • Leverage Analytics: Regularly measure ad effectiveness through Instagram’s native reporting tool, tracking metrics like impressions, clicks, engagement rate, and ROI. Consider using third-party tools for more in-depth analysis.

How to Reduce the Cost of Your Instagram Ads

To reduce the costs of your Instagram ads and optimize your budget effectively, consider the following strategies:

  • Choose Appropriate Campaign Objectives: Begin by selecting campaign objectives that align with your marketing funnel. For targeting broader, less familiar audiences, start with cost-effective campaigns aimed at creating awareness, and engagement, or driving website traffic. This allows users to visit your website and be tagged with the Pixel, enabling you to re-target them later if they don’t convert on their initial visit. Building trust and nurturing potential customers through multiple interactions is often necessary before they make a purchase. However, if you offer low-cost products that require minimal research, you can aim for immediate sales through Instagram ads.
  • Use Automatic Placements: In the ad set level, opt for automatic placements to serve your ads on both Facebook and Instagram. This provides more placement flexibility, allowing the advertising system’s algorithm to decide where to display your ads most effectively. This broader reach across both platforms can result in lower competition on Instagram’s ad placements, ultimately reducing your advertising costs.
  • A/B Testing: Experiment with different ad variations, including ad copy, images, and videos, to target different audiences. Conducting A/B tests helps you identify what resonates best with your audience, leading to improved engagement rates and click-through rates (CTR). Higher engagement and CTR can contribute to lower advertising costs, as your ads become more effective at capturing your audience’s attention and driving desired actions.

By implementing these strategies, you can optimize your Instagram advertising campaigns, lower your costs, and make the most of your advertising budget. This approach allows you to build brand awareness, engage with potential customers, and ultimately increase your chances of driving conversions and sales on the platform.

Final Thoughts

In today’s competitive digital landscape, Instagram advertising stands as a potent tool for businesses to connect with their target audience. As you embark on your Instagram advertising journey, remember that success often lies in a combination of smart budgeting, creative content, and data-driven optimization. With these elements in harmony, Instagram can be a powerful platform to elevate your brand and achieve your marketing goals in the ever-evolving world of digital marketing.

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