Marketing

How Much Does it Cost to Advertise on Instagram?

By May 21, 2020 No Comments

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Instagram is a component of the Facebook brand, which means advertising on the platform is not much different than doing so on Facebook. Yet, it is a different platform with a different user base. What’s more, it’s not always easy to know the actual cost to advertise on Instagram. To determine if this is a platform you should be using for advertising, there are a few key things to consider.

Like many other social media platforms, there’s no set price associated with advertising. You choose to bid on ad placement. The brand with the highest bid will have their ad placed by the site. This is a very simplistic view of the process. What’s important to know is that you are not guaranteed to have your ad accepted by the platform or to have it placed in front of the site’s users.

When it comes to the average cost for an Instagram ad, expect to pay between 20 cents and up to $2 per click on your campaign. You can also run ads on a cost per mile basis. This means you pay based on the number of impressions your ad receives. The average cost here is about $5 for every 1,000 visitors – though there is a significant amount of range in that.

Of course, what you spend on Instagram ads, then, needs to relate back to the results you get. In one survey, Instagram had a click-through rate of 0.8 percent. Facebook, by comparison, had a click-through rate of .06 percent. The cost per mile for Instagram was $5.14, while the Facebook cost per mile was $5.12. Facebook’s cost per click came in at $0.80, while Instagram’s cost per click was $0.61.

Now, let’s take a closer look at some key factors impacting your decision to use the site.

Instagram and Facebook

Facebook’s ad platform allows marketers to place ads on Instagram as a part of the service it offers. It’s one of several locations you can use to place ads. You can choose from locations such as Facebook’s desktop News Feed, right column, mobile news feed, audience network, messenger, and the Instagram mobile news feed. It is a very simple way for you to get your ads on both platforms if you would like to do so.

Facebook advertisers should highly consider adding Instagram to their advertising campaigns. While you do not have to, if your target customer is using the site, it can be well worth the investment. One key reason is that they even provide discounts to advertisers who do, which can stretch your ROI just a bit more.

Instagram Is Ideal for Its Engagement

One of the key reasons why you want to use Instagram as a component of your campaign is because the platform’s users are more likely to respond and interact with them. Some research found that Instagram users are about 10 times more likely to interact with a brand they are a follower or a fan of than the same users on Facebook.

What does that mean for you as an advertiser? If your brand wants to communicate with your followers – and you want to build brand awareness- Instagram can be an excellent place to do so.

Is your target demographic using the platform? Instagram users tend to be female and younger. If you are targeting young women in your ads, then this is an excellent place. This is also going to drive up your costs a bit (you’ll pay more for advertising to young women, for example).

Some insight into the cost found that you can expect to pay an average cost per click of 70 to 80 cents. The highest costs are associated with those in the age group of 25 to 34. There, the cost per click can climb to as high as $1.23 per click. The lowest cost per click prices are around $0.47 per click for 13 to 17-year-old users.

You’ll Spend a Bit More with Instagram

It is clear that your target audience will make or break your ROI when it comes to ads (even if you spend more on ads on Instagram, if that’s where your audience is, you get a better return if you advertise there). If you need and want more engagement with your ads, you will pay a bit more for it by using Instagram instead of Facebook as your advertising platform, but for many brands, it can be well worth it.

What we know is that Instagram has about 10 times the engagement with users as Facebook does. That means you are going to get better results – which includes clicks and purchases – by using Instagram.

Of course, this is just a basic statement. The costs you will pay will range widely based on the business as well as the market. If your target market is a business professional or a Generation X buyer, you may not have as good of luck using Instagram. Still, it can be an excellent choice for those who want to stand out with the limited demographics on the platform in those circles.

What Factors Play a Role in Cost?

There are several factors that impact what you will pay for Instagram ads. The first is the amount you set as your highest level bid for your campaign. In addition, the ad’s Relevance Score is a factor. This is a rating based on how relevant the platform considers your ads in relation to the people you are targeting in them. It sounds complex but really does not have to be.

The third component of the cost you will pay is your Estimated Action Rates. This is a figure representing how likely the platform believes people will take action using your leads. For example, how likely are they to convert when they see the ad you’ve created?

What’s important to focus on here is that your price is not just based on the bid you make. You can reduce what you pay, for example, by providing a more effective and higher quality ad or one that focuses on a more specific audience base. This impacts your ROI significantly.

How to Create Affordable Instagram Ads

Before you begin to place ads on Instagram, invest the time in learning the process. Use the platform to really uncover the way it works and what works. As noted, your ROI is greatly impacted by the type and quality of the ad you use.

Start by understanding who your target audience is on the platform. Then, create the type of ad that is going to get their attention. How do we do this?

There are three main sections to consider in the process: the campaign, the ad set, and the ad itself. Here’s a look at how that breaks down.

Set Campaign Details

The first step is to set your campaign details. What is your objective for the Instagram marketing campaign you’re creating? In other words, what do you want to get out of it? You have 11 different marketing objectives you can choose from across three different categories.

In Awareness, you can choose brand awareness and reach.  Consideration provides you with options such as traffic, engagement, app installations, video views, lead generation, and messages, all of which can be important to any brand. The third category is Conversion with options such as conversions, catalogue sales, and store visits.

It’s important to choose an objective that is actual – don’t just choose one. It’s always a good idea to optimize your conversions. This will allow the platform to target your campaigns to provide the best results to you but at a more affordable price.

Ad Set Details

The next step is to choose from the various settings based on your preferred objective to create your ad set. If you want to increase traffic, for example, you will then have to choose between targeting Messenger, app, or website traffic. It is a way of further breaking down the goals.

You can then create an offer and better define your audience. A selected audience is valuable – it gives you better ROI hands down. You can target your ads in numerous ways – it’s worth spending some time comparing those options. Keep your focus narrow for the best results. You can use targets based on things like age, gender, location, interests, behaviors, languages, and so on.

You then get an indication of your estimated reach and engagement. Then, choose your placements, as noted previously. Then, you need to set your budget. You can choose a daily budget limit or a lifetime budget. You can also choose your desired timeframe for ads to run. Instagram then lets you choose your ad delivery optimization options, such as whether you want the ad to run just once a day or more often. You may want, for example, the site to show your ads to many people rather than just a targeted few.

After this is complete, there are a few more decisions to make. Choose the method you’ll pay (cost per click or by impressions). Some people may select manual bidding, which allows you to choose either a maximum or average bid. The maximum bid option means your ad will not run if the cost per result is higher than the bid amount you select. This option gives you better profits. If you select average bid, you’ll get the maximum ROI in the pacing method. You will not be using up your budget too quickly and miss out on opportunities later in the day, for example.

Set Details to Your Specific Ads

You’ll need to create your actuals at this point. That means selecting a format (carousel, single image, single video, or slideshow). If you plan to use Instagram Stories, you can then choose a single video or a single image option.

The most affordable options tend to be carousel ads. They tend to offer the best ROI overall.

Utilize Native Ads on Instagram

A final important component is using native ads. Don’t try to place sales-focused, traditional advertisements on the site. These do not work well. Instead, you’ll want to create native ads that feel like they belong on the platform. Doing this will also improve your relevance score, ensuring you are paying fairly for quality content.

There’s no doubt Instagram has much to offer today’s brands looking for a way to build their business. It’s all about getting the right ads in place for your business’s goals.

Author Kevin Urrutia

Kevin is the founder of Voy Media. Kevin is an avid outdoorsman and nature lover; when not in the concrete jungle of New York, he can be found trying to explore a real one. Follow Kevin on Twitter Voy Media has been named the #1 Facebook Marketing Agency and one of the fastest growing marketing agencies in NYC. Voy Media crafts custom digital marketing strategies for clients, including services in Facebook Ads, Google Ads, Amazon Ads, email marketing and more.

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