How much is it to run ads on instagram

How Much Do Instagram Ads Cost in 2022? (+ How to Save)

While Facebook and Instagram advertising work using the same Ads Manager, their respective advertising costs vary. With Facebook being around longer, having more data, and more ad placements compared to its younger adopted sibling platform, we do find that more often than not, Instagram is slightly more expensive than Facebook in some instances. While that is the case, don’t let it deter you from exploring this lucrative and effective visual counterpart in the Facebook ecosystem. With fewer ad placements, increased competition for impression share, you may pay slightly more to use Instagram, but you may also pleasantly see it being much more cost-effective than the results you’re getting with Facebook.

Paid advertising is a powerful marketing tool on Instagram and complements what brands are able to do in their Feeds, Stories, and Explore tabs. While Reels and IGTV don’t yet have ad placements, we may very well see them added as placement as the platform continues to scale and the need for more impressions comes about. Like Facebook ads, Instagram ads offer advanced targeting and flexibility so as to be accessible for just about any business. If this visual platform is a popular channel for your target audience, you may want to advertise on Instagram. To help you understand the cost, we’re going to cover:

How Instagram ads work.
What makes Instagram advertising worth the price.
Factors that influence Instagram ad costs.
Average cost per click, cost per engagement, and cost per thousand impressions on Instagram.
Ways to keep your Instagram ad costs down

Read on to learn about the workings, advantages, and cost of advertising on Instagram this year.

How do Instagram ads work?

Depending on your campaign objective, ads appearing on Instagram can have up to 18 call-to-action button options, can link to your website, and give users options to download applications or shop online stores.

You don’t actually even need an Instagram account to advertise on Instagram. Since Facebook is its parent company, all you need a Facebook Business Page. However, it is best to have an Instagram account so you can familiarize yourself with content that resonates best with your target audience and complement and amplify your organic Instagram marketing efforts.

To set up Instagram Ads, use Facebook’s Ads Manager to set up campaigns, ad sets where you select your budget, target audience, ad placements, and optimization options. Similar to Facebook Ads, your ads will run within the selected time frame, budget parameters, audience selection, and optimization goals.

What makes Instagram advertising worth the price?

Advertising on social media brings many benefits, and there are some particular benefits of paying for ad impressions on Instagram rather than simply running campaigns and promotions directly from your business’s account.

Advanced targeting

With over 1 billion monthly users, Instagram ranks second after Facebook. These platforms have an incredibly robust arsenal of targeting data and since Facebook owns Instagram, Instagram advertising utilizes the same comprehensive demographic and geographic data. This advanced targeting is what makes Facebook Ads work so well, as you can be incredibly prescriptive when targeting various audiences. Whether you are utilizing Facebook’s native audiences based on interests, behaviors, or other demographics, or utilizing your own custom audiences that utilize your Pixel or SDK, email lists, or other sources, you can find success in reaching the right people in your prospecting and retargeting campaigns.

Higher engagement rates

Instagram is known for its high engagement rates—organically and through paid ads. Images on Instagram receive an average of 23% more engagement than when shared on Facebook. When it comes to organic engagement, brands on Instagram say that they have about 4% of their followers seeing their content compared to the nearly non-existent organic reach that Facebook has today. While it’s better, it’s still wise to pay to play in order to expand your reach and visibility with paid ads. While any form of visual content can perform well, brands typically see more engagement on video ads—about 38% more. As a visual platform, images and videos are powerful in driving more engagement than on other more text-based social platforms.

External links

Instagram does not currently allow clickable links in organic posts. You can include a link in your caption or message, but the recipient has to copy and paste it into their browser or visit the link in your Instagram bio. With Instagram advertising, you can include outside links, which enables you to designate a destination URL to your website or another external URL. To be able to better track website traffic from your Instagram Ads, it’s recommended to use your own domain as you should have your Pixel implemented there, whereas you may not have it on other website URLs that you don’t control.

Longer videos

Instagram Feed and Explore video can be up to 60 seconds in duration and while Stories are typically up to 15 seconds in duration, if you run ads in these three ad placements, you can have up to 2 minutes of video content. This gives you more opportunity to convey both your brand and the features and benefits of your offer through your products and/or services.

How much do Instagram ads cost?

Let’s take a look at the average cost per click, cost per engagement, and cost per thousand impressions on Instagram.

Instagram cost per click (CPC)

For all metrics, Instagram cost per click in 2021 ranges from $0.40-$0.70. This takes into account all clicks that happen on an ad, which includes not only link clicks, but likes/reactions, comments, and shares.

For ads that have a destination URL, Instagram cost per click in 2021 ranges from $0.50-$0.95.

Instagram cost per engagement (CPE)

Instagram cost per engagement in 2021 ranges from $0.01-0.05.

Instagram cost per thousand impressions (CPM)

Instagram cost per one thousand impressions in 2021 ranges between $2.50-$3.50 for better-performing campaigns and their respective ad sets.

When it comes to CPMs, our findings show that Facebook tends to be higher than Instagram, by nearly 2x but CPCs tend to be lower by nearly half on Facebook compared to Instagram.

Image via AdEspresso

Facebook vs Instagram advertising costs

While Facebook and Instagram advertising work using the same Ads Manager, their respective advertising costs vary (see how much it costs to advertise on Facebook in 2021 here). With Facebook being around longer, having more data, and more ad placements compared to its younger adopted sibling platform, we do find that more often than not, Instagram is slightly more expensive than Facebook in some instances.

While that is the case, don’t let it deter you from exploring this lucrative and effective visual counterpart in the Facebook ecosystem. With fewer ad placements and increased competition for impression share, you may pay slightly more to use Instagram, but you may also pleasantly see it being much more cost-effective than the results you’re getting with Facebook.

Factors that influence Instagram ads costs

Similar to other platforms, Instagram ad pricing is influenced by a number of variables.

Campaign objective

Campaign objectives can cause your advertising costs to be automatically higher or lower, depending on which you choose and how it relates to where your target audience is in the funnel.

For example, if you select a brand awareness campaign objective, it will be lower in cost than something lower down the funnel and that has a higher value objective, such as conversions. Having broader, colder audiences see your ad to drive brand awareness is a lower-value action compared to targeting a user further down funnel—who are more familiar with your brand and offerings, and ready to open their wallet or take a higher-value action.

Audience size

If you are targeting broader audiences, they are typically lower in cost as there is less competition for a group of people. As you narrow your audiences, perhaps by reducing their geotargeting or age ranges, you may see the price go up as competition for those eyeballs increases in parallel. Retargeting audiences are typically smaller as well, hence why we often see higher costs in retargeting campaigns.

Budget

Budget also influences Instagram ad costs because if you have a small budget, it may take longer to get out of the Learning Phase if your campaign or ad set is starting anew. Costs may be more expensive at first before the system learns and understands your campaign type and optimization goals, and how your audience engages with your ads. If your ads are well engaged with, Facebook and Instagram will reward you with lower costs over time.

Click-through rate

If CTR is low, then we may see higher costs as the system thinks there may be some disconnect between your target audience and what you’re messaging in your ads. You want your ads to resonate with your target audience and CTR Is a strong indicator of that. Aim for a healthy CTR which is about 2%. If you have a healthy CTR, you should see your costs decrease.

How to lower your Instagram ads costs

Make the most of your budget by selecting funnel-appropriate campaign objectives to start. If you are targeting colder, broader, prospecting audiences, test less expensive campaigns to introduce your brand to audiences with an awareness, engagement, or better yet, a website traffic campaign so that these users leave Instagram and get to your website and tagged with the Pixel so you can later retarget them if they don’t convert on that first click. If you’re new to Instagram Ads, you can drive sales from the first interaction and click, but more often than not, users will need to have several interactions with your brands in order to develop trust, perhaps do some shopping and comparing, and then come back to you through retargeting or other means to open up their wallets. If you have a low-cost product that doesn’t need much research, impulse buys can be successful from Instagram.

Another way to lower your Instagram costs is to use automatic placements in the ad set level and serve across both Facebook and Instagram. By having more placement liquidity, the system can use its algorithm to determine where to best serve your ads, thus giving them more options across both platforms and more ad placements, thus, lowering competition on Instagram’s three current ad placements, thus lowering your costs.

You will also want to test audiences with different ad variations by testing the different lines of ad copy and creatives – images and videos. By running tests, you can learn what resonates with your audiences and it can help improve your engagement rates and CTR, thus, also helping lower your costs and making your budget go further.

How much do Instagram ads cost? [recap]

Instagram continues to grow and the advertising options only become more robust. It’s not yet saturated and it’s safe to assume that more ad placements will come our way.

Give Instagram Ads a test and see how it fairs in comparison to Facebook Ads and other advertising platforms you may be running on. It may end up being an important part of your funnel by driving more brand awareness and engagement or it may end up bringing a primary source of revenue.

Instagram ads cost per click: $0.40-$0.70 (link clicks, likes, reactions, comments, shares)
Instagram ads cost per click to destination URL: $0. 50-$0.95.
Instagram ads cost per engagement: $0.01-0.05.
Instagram ads cost per thousand impressions: $2.50-$3.50

Want more cost information? Check out similar posts:

How Much Does Google Ads Cost?
How Much Do Facebook Ads Cost?

How Much Do Instagram Ads Cost? A Complete Guide| WordStream

Facebook ads have long been the gold standard in social advertising, in part because Facebook allows brands to target incredibly niche markets, and has empowered marketers to get rapid insights into winning combinations of creative, audience, placement and other variables to optimize their campaigns.

That’s according to Timothy Masek, senior growth strategist at marketing agency Ladder, who said Facebook’s 2012 acquisition of the image sharing app-enabled Facebook to add Instagram as a simple placement option in the Facebook ads platform, which is precisely what marketers wanted.

“Since 2015, you can use a basic toggle in the Facebook Ads Manager platform to choose to show your ads on Instagram,” Masek added.

As a result, Patrick Havey, social media manager at digital marketing agency Passion Digital, said it can be tempting to treat Instagram ads the same as Facebook ads.

“However, despite both now copying each other’s features – The Great Storification, anyone? – users still engage with the platforms in different ways,” he said.

And therein lie some opportunities for savvy marketers.

What’s more, Havey noted that Instagram posts tend to get 10 times more engagement than Facebook posts on average.

Instagram engagement stats

“This gives you a unique opportunity to build trust and connect emotionally with your audiences in an uncluttered environment,” he added.

Indeed, Nathan Mendenhall, director of social strategy at digital marketing agency That Agency, agreed Instagram is a high-engagement platform and is a great option for generating both brand awareness and site visits.

Free download: Up your game with our free all-star online advertising playbook.

Instagram Ad Costs: How Much Does it Cost to Advertise on Instagram?

However, according to Keith Baumwald, founder of boutique consulting agency Leverag Consulting, online ad costs for Instagram ads are usually slightly higher than their Facebook counterparts.

“With highly targeted ads, you could be paying over $5 a CPM” (cost per thousand impressions) on Instagram, Baumwald said.

According to Masek, on the other hand, whenever Facebook tests a new ad feature, like a new creative type or a new audience type, it drops the CPM to make the feature more accessible and alluring to marketers.

“So while a typical CPM on Facebook Ads will be around the $10 mark today, it was closer to $5 on Instagram,” Masek said. “Today, the gap is getting narrower and narrower. This meant that running ads on Instagram was immediately going to be more cost effective for marketers – in fact, twice as cost effective.”

At the same time, Masek said as Instagram started rolling out ads, users were clicking on them at a much higher rate than they were on Facebook.

“Users have become accustomed to ads on their Facebook newsfeed and started clicking less on them – the same way the first banner ad on the web drove a 44% CTR and today’s banners drive a 0.1% CTR,” he added. “So when Instagram rolled out ads, not only were they cheaper, but the CTRs were through the roof.”

For his part, Damon Gochneaur, founder of digital marketing agency Aspiro Agency, noted the average cost to advertise on Instagram can vary wildly depending on the type of ad, the audience targeted and the type of creative used.

“In general, single image ads will be the most expensive, with a carousel or multiple image ads generally performing better than single image ads,” Gochneaur said. “Additionally, video ads will typically outperform both single image ads as well as carousel ads. In addition, the audience you’re targeting will also have an effect on the cost of the ad.”

Example of a video ad on Instagram from Netflix

“This [$5 CPM] is still much cheaper than pretty much any other channel for display ads, especially given the fact that you can target so effectively,” Baumwald added. “That said, if you’re in a highly competitive market, either because of your product or location, the costs can rise dramatically.”

Here’s a look at how advertisers can rein in those Instagram ad costs, no matter what market they are in.

P.S Check out our updated post on the cost to advertise on Instagram on 2021.

1. Don’t over-produce your ad content.

In part because users can’t schedule posts on Instagram, Havey said candid-style posts perform well.

“If users feel like they’re seeing something fresh and authentic, they’re much more likely to engage and warm to your brand,” he said. “User-generated content can work wonders and helps create a two-way relationship between brand and consumer.”

Havey also noted the best social ads are those that appear native.

“Nobody enjoys seeing an ad stick out like sore thumb in their carefully curated Instagram lifestyle feed,” he said. “As such, focusing on powerful visual storytelling and brand marketing, rather than trying to drive direct response, can often lead to better results. ”

Scott Bauer, marketing director at digital marketing firm Navigator Multimedia, said Instagram users have quickly learned how to identify ads versus followers, so advertisers should remember they may only get a second or two of a user’s attention before he or she scrolls on.

“You’ll find the highest ROI not necessarily in the lowest CPM, so I recommend creating content that is in line with your target audience and don’t ask for the sale too soon,” he said. “Instagram is very visual and you want to create top-funnel content to introduce your business/brand.”

He added, “Too many advertisers treat Instagram like they do search ads and it’s not the same context.”

2. Build audiences with video.

Per Gochneaur, brands looking to lower Instagram ad costs should make slideshow-style videos from photo assets and use those video ads to target consumers that are top of the funnel and have no brand affinity.

“Video traffic is a lower acquisition cost and allows you to build audiences more affordably – the key phrase being ‘build audiences’,” he said. “Once you’ve driven traffic from the initial video ad, you’ll then want to use remarketing mapped to a sales funnel in order to drive revenue and business growth from Instagram traffic.”

3. Test your creative and audiences.

For his part, Masek said as users become more accustomed to Instagram ads and CPMs are tightening, marketers can increase their ad performance by testing.

“Facebook and Instagram reward the brands that serve relevant content to their users. The higher your CTR, the higher your relevance score and the lower your CPMs – that’s how it works,” he said.

“The way to make your ads relevant is to test different combinations of an audience, messaging and creative,” he said. “Don’t blast the same ad to everyone. Instead, pick five different audiences, set them up as separate as campaigns, and then create five different ads for each audience. Then, sit back, spend media budget and see how the world responds to your ads.”

As a result, Masek said marketers might find one of those audiences is driving a 10x cheaper CPC, and that within that audience, one specific Instagram ad is driving a 5x higher CTR.

“Turn everything else off, and shift your budget to your winning combination. That’s how you game the system,” he added.

4. Optimize based on demographics.

Mendenhall noted that because Instagram Ads are launched through Facebook’s advertising platform, marketers have access to the same type of data – and they should use it.

“We recommend taking a look at which demographic is generating the most expensive results and omitting them from targeting,” he said. “If you check your data and see that men between the ages of 45-54 have a cost per click of $2.00, removing them from your targeting will help reduce your costs.”

Baumwald agreed. “By segmenting your ads based on different criteria, it will quickly become clear which audiences have the lowest costs,” Baumwald said.

Mendenhall also suggested starting an Instagram campaign with a select audience and adapting as costs rise.

“When you add/remove a targeting parameter and see the cost per result go down, make a note of that for the future,” he said. “Continue tweaking as needed.”

5. Mind your Relevance Score.

On a related note, Mendenhall pointed to Relevance Score, which is how Facebook judges the quality of an ad.

“This is based on creative, targeting and the results of your ad,” he said. “The higher your Relevance Score, the more efficiently your budget will be used.”

In addition, David Bosley, managing partner at digital marketing agency PBJ Marketing, said marketers who find they aren’t getting impressions using the target CPA/CPL/CPI method can try taking the average of the suggested bid and doubling it.

“You likely will not pay that extremely high rate, but it will win you more auctions and, on average, you could still hit your target metrics,” he said. “Give it a try – it doesn’t work for everyone but when it does it yields incredible results.”

6. Build out a campaign.

The ability to target the same users on Facebook and Instagram gives marketers a chance to build a campaign with multiple touch points without much trouble, Havey said.

“A social ad strategy that employs proper use of each platform can help take your audience from awareness to purchase to advocacy with ease if executed correctly,” he added.

7. Create dedicated landing pages.

According to Baumwald, brands should also carefully consider what happens once consumers who click your Instagram ads actually land on a web page.

“Does the creative in the ad match what they see on the website? Are you making it easy for users to convert by following best practices?” he asked. “Better-converting landing pages make it much easier to absorb the costs of slightly more expensive Instagram campaigns. For a truly effective campaign, be sure to build out dedicated landing pages and don’t send people to your homepage.”

Bosley noted the most successful Instagram campaigns have mobile-friendly objectives, like brand awareness, app installs, lead gen and sending users to a mobile-friendly website that loads in three seconds or less.

8.

Retarget.

Adding a tracking pixel to a website or app enables brands to easily retarget consumers who have visited their sites.

“Since these people will already be familiar with your brand, the advertising will be much more effective,” Baumwald said. “The cost may be similar, but the number of people converting should be much higher.”

He added one caveat: “This will be a much smaller audience you’re targeting so it’s important to change your creative on a regular basis so that your audience isn’t seeing the same ads from you over and over again.”

analysis of more than 130 thousand paid posts - Marketing on vc.ru

We have prepared a translation of a large-scale study from Socialinsider. This article presents statistics that show the strengths and weaknesses of advertising on Facebook and Instagram. The experts analyzed 137 228 posts and found out what works more efficiently.

4254 views

#resume

1. Instagram Stories is the highest click-through ad placement; average CTR 0.76%

2. Instagram ads are more expensive than Facebook ads

3. Instagram focuses on feed ads - this placement has the highest CPC ($1.86) and CPM ($7.27)

4. The most expensive placement on Facebook is stories with a CPC of $0.55

5. The Facebook feed is the king of ad placement. Brands invest the most in it; Facebook feed has the highest CPM (5.18%) and the highest CTR (4.70%)

Colleagues, we were also surprised that in South America they spend more on advertising than in North America, but we will trust our friends from Socialinsider

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Average CPC: $0.49 on Facebook ads and $1.09 on Instagram on average

Instagram ad prices tend to increase gradually, in mid-2021, the average cost per click on Instagram is $1.09.

Instagram Stories is an ad placement where people interact with content more often; average CTR 0. 76%

And the Instagram feed, which many brands invest in the most, comes in second with a lower average CTR of 0.69%.

Facebook posting cost

The graph above shows that brands prefer the Facebook feed for ad placement and invest the most money in this placement.

Speaking of average CPC, some interesting discoveries can be made:

Facebook Stories is the ad slot with the highest CPC of $0.55.
In the right column of Facebook, CPC averages $0.38.
Facebook Feed reaches an average CPC of $0.26.
Facebook videos have an average CPC of $0.13.

When your primary goal is to increase brand awareness, an important metric you should look at is average CPM . Let's take a look at the numbers:

Facebook Feed: Average CPM is $5.18.
Facebook Video: Average CPM is $2. 48.
Facebook Right Column: Average CPM $0.38.

Cost of posting on Instagram

The most used ad placement on Instagram is the feed. Although it has both the highest average CPC of $1.86 and CPM of $7.27.

The Instagram feed has both the highest average CPC of $1.86 and CPM of $7.27. Other placements are almost half the price.

Facebook Feed has the highest average CTR of 4.70%, followed by Facebook Video with an average CTR of 2.05%

The ultimate goal of brands is to convert the audience into customers. Conversions make up almost a quarter of the main goals of an advertising campaign.

And if you look at the average CTR on Facebook, it's pretty clear why marketing budgets are divided the way they are.

The top two positions for the best ad placement on Facebook are the placements where brands spend most of their social media ad budgets:

Facebook Feed with an average CTR of 4. 70%.
Facebook video with an average CTR of 2.06%.

In terms of performance, these two types of Facebook ads are followed by:

Facebook Right Column: with an average CTR of 0.15%.
Facebook stories: with an average CTR of 0.09%

Text reference:

❗Paid advertising on Instagram and how to use it effectively

Even though Facebook and Instagram ads are set up using the same Ads Manager control center, the advertising costs differ on these social networks. Because Facebook has been around longer, has more data and more ad space than its younger sibling, Instagram will indeed cost a bit more in some cases. But this fact should by no means be a reason to refuse to explore the possibilities of such an attractive and effective application that perfectly complements the Facebook ecosystem. Using Instagram may be slightly more costly due to fewer ad spaces and increased competition for impression share, but in terms of overall performance, it can also significantly outperform Facebook.

Paid advertising on Instagram is a powerful marketing tool that complements the ability of companies to fill the feed, stories and "Interesting" section.

As the platform matures and the need for more impressions arises, ads may well be added to the Reels and InstaGram TV services.

Advertising on Instagram, just like on Facebook, has flexible settings and advanced targeting functions, which makes it available for almost any business. If this visual platform is popular among a certain target audience, then you should think about placing ads there. To help guide you, the following questions will be discussed below:

How does Instagram advertising work?
Why is she worth the money?
Factors affecting pricing
Average rates
Ways to get the most out of your advertising budget

What follows is a brief overview of how Instagram advertising works, benefits and costs in 2021.

How does advertising work in Instagram ?

Depending on the purpose of the campaign, advertising on Instagram can:

have up to 18 call-to-action button options;
transfer the user to a specific site;
allow users to download applications or make purchases in online stores.

You don't even need an account. Since the service is owned by Facebook Inc, the only thing required is a Facebook business page. However, the benefit of having an Instagram account is still there: thanks to it, it will be possible to get acquainted with the content that best suits the preferences of the target audience, as well as complement and improve the marketing efforts undertaken.

Use the Ads Manager tool to configure your future ads. With it, you can set up advertising campaigns, ad groups, for which you can specify the size of the budget, select the target audience, ad placements and optimization options.

As with Facebook, Instagram ads will perform according to your chosen time frame, budget, audience, and optimization goals.

Why advertising at Instagram worth the money?

Social media advertising is very useful, in particular the payment for advertising impressions on Instagram, which is especially beneficial compared to the usual running of campaigns or promotions directly from the organization's account.

Advanced targeting

Instagram, which has a monthly audience of over 1 billion users, is second only to Facebook in this indicator. Both platforms have an incredibly powerful arsenal of targeting data, and since Instagram is part of Facebook, Instagram ads take full advantage of a combined array of demographic and geographic statistics. Facebook ads are highly effective precisely because of advanced targeting, which provides the opportunity for fine-tuning when focusing on different consumer audiences. Whether used:

native Facebook settings suggested based on interests, behavior and other demographics,
or building your own custom audiences using the Facebook Pixel toolkit or SDK, email lists, or other sources, it's entirely possible to succeed in reaching the right people through your retargeting and customer acquisition campaigns.

Higher engagement rates

One of the factors behind Instagram's popularity is its high engagement rate, both organic and through paid advertising.

Images posted on Instagram get 23% more attention on average than on Facebook.

In terms of organic engagement, Facebook has almost no organic reach, while the content of large companies that are present on Instagram is regularly viewed by about 4% of followers. While it's better than nothing, it's a smart move to invest more in paid advertising to increase your visibility and reach. Decent results can be achieved using any form of visual content, but video advertising is more attractive in terms of engagement (by about 38%) for many businesses. Images and videos that form the visual basis of Instagram are much more effective in attracting attention compared to platforms degrees focused on textual representation of information.

External links

Instagram does not currently support hyperlinks in organic posts. You can include the link in the header or body of the message, but the recipient must manually copy and paste it into their browser or follow the link in the profile description. When you connect paid advertising, you can add external links, which allows you to specify a specific website or other external URL as the target address. To be able to better track conversions from Instagram ads, it is recommended that you use your own site with a pre-configured Facebook Pixel, as it may not be available on third-party sites.

Longer videos

Videos can be up to 60 seconds long in the feed and Explore tab, and up to 15 seconds in story mode. Accordingly, if advertising is launched in all these places at once, then in total you can get up to 2 minutes of video content. This gives more opportunities to present not only the brand itself, but the features and benefits of the offer through a visual presentation of products and / or services.

How much will advertising cost?

If there is a target URL, the cost per conversion for the Link Clicks metric will range from $0.50 to $0.95. The CPC for the "Clicks (all)" metric is slightly lower, ranging from $0.40 to $0.70.

This metric takes into account all clicks on an advertisement, including not only clicks, but also likes, reactions, comments and reposts. In terms of cost per thousand impressions (CPM), starting January 1, 2021, you will need to spend at least $2.50 - $3.50 to run the most effective campaigns with eligible ad sets. Engagement costs will be $0.01 - $0.05.

The data also shows that CPMs on Facebook are almost 2 times higher than on Instagram, while CPCs are typically half as much.

Pricing Factors

Instagram ad pricing, like other platforms, depends on a number of variables. The costs can vary significantly depending on what is chosen as the goal of the advertising campaign, and how this goal correlates with the position that the target audience occupies in the sales funnel. If the goal of the campaign is to increase brand awareness, then it will cost less than the action located lower in the funnel and, accordingly, with more value (for example, conversions). Showing ads to a wide and cold audience to better educate them about the brand will be less valuable than when a certain number of potential customers familiar with the product and offers have already moved closer to the bottom of the funnel. These people are willing to shell out or take a higher value action in a retargeting-focused conversion campaign that can be optimized for purchases.

Other variables that play a role in determining advertising prices include audience size. Reaching a wider audience will generally be cheaper as there is less competition for groups of people. And vice versa, as the audience narrows, for example, due to the clarification of geotargeting parameters or age limits, the price will grow in parallel with the increase in competition for its representatives. Retargeting audiences are usually small too, which is why retargeting campaigns often come with higher costs.

Pricing is also affected by the size of the budget. If it is small, and the advertising campaign or ad set is launched from scratch, then the exit from the learning phase may be delayed. At first, until the system learns and understands the type of campaign, optimization goals, and how the audience reacts to advertising, the cost of advertising can be higher. If the ads are attractive enough, Facebook and Instagram will reward you with smaller ads over time.

Click-through rate (CTR) can be significant. If it is low, the cost may be higher because the system will assume that there is some mismatch between the content of the ads and the target audience. CTR is a reliable indicator of the extent to which an ad resonates with its target audience.

Approximately 2% is considered a normal CTR level, the achievement of which will allow counting on cost reduction.

How to save on advertising in Instagram

For the most efficient use of the budget, the first step is to determine the goals of the advertising campaign, which will be in line with the sales funnel. If the intent is to target a colder, broader audience, start with less expensive campaigns to provide more exposure to those potential customers who are already aware of or interested in the brand. Better yet, test your website traffic campaign to get those users to visit your site from Instagram and be registered with the Facebook Pixel tool. This will provide an opportunity for their subsequent retargeting if the conversion does not occur at the previous stage. More often than not, users need to make several interactions with products, perhaps buy something and compare with competitors' offerings, before they have enough trust in the brand. Subsequently, these people will come back to you through retargeting or other means to finally make a purchase. Impulse buying can be successful if you sell an inexpensive product that does not require much market research.

Another way to reduce costs is to use the automatic placement option in your Facebook and Instagram ad settings. With a wide margin for maneuver, the system can use its own algorithm to determine where it is best to place ads. As a result, both the total number of options for both platforms and the volume of ad impressions increase, reducing competition in the three current Instagram ad placements (Feed, Stories, and Explore) and lowering costs.

It makes sense to try different variations of ad copy and image ads in the form of images and videos. This will help you understand what resonates with your audience, as well as improve engagement and CTR, which in turn will help reduce costs and increase your budget.

The prospects for advertising in Instagram in 2021

The Instagram app continues to grow, and the opportunities for advertising in it become more and more functional.