How much to invest in instagram ads

How Much Do Instagram Ads Cost in 2022? In-Depth Guide from K6

Instagram has more than 1 billion active monthly users. This platform offers an incredible opportunity to communicate with potential leads interested in your products or services. You can generate even more leads and grow your business by using Instagram Ads.

But how much do Instagram Ads cost?

Instagram Ads cost depends on your bidding model, such as cost-per-click (CPC) or cost-per-impression (CPM).

Typically companies on average pay, $0.50 to $1 per link click. In highly competitive industries, like apparel, you’ll pay more. The cost of Instagram ads may go up to $3.00 per click.

Instagram Ads is still new to some companies that run social media advertising campaigns. Our goal is to help your company with some strategic tactics. If you’d like to learn more about Instagram ads, keep reading!

This guide will help you understand the cost of Instagram ads, how it compares to Facebook ads, how the cost is determined, and much more!

How Much Does an ad cost on Instagram?

One of the most pressing questions from advertisers who are interested in Instagram advertising is how much does a click or conversion cost?

Let’s take a look at what various resources say.

AdEspresso found that the Instagram average cost-per-click is $0.80.

On average cost-per-click Instagram ads, are between $0.70 and $1.00.
There are however many elements that affect the cost of your Instagram ads.

The cost of Instagram ads ultimately comes down to the audience you are targeting that’s why knowing your Instagram demographics is so critical.à

The going rate for Instagram Ad post design can vary depending on your experience, portfolio, and location. In general, you can expect to charge anywhere from $50-$200 per post. Instead of Creating the post use user-generated content and showcase customer centric images to increase sales.

For Example – Toyota increased its ad engagement by 440% using UGC with the launch of Feeling The Street – a global campaign highlighting and celebrating the world’s best street performers.

Instagram Demographics

As you can see in the diagram above, women are much more active than men on Instagram. This leads to higher CPCs for targeting female audiences. Age demographics, however, paint quite a different picture.

Most Instagram users are under 50. The following image shows the average cost per click (CPC) for Instagram ads in 2017 across all age ranges goes from $0.70 to $0.80, according to AdEspresso. Also, it highlights that the highest CPC age groups are 18-24, 25-34, and 35-44-year-olds.

AdEspresso CPC by Age

CPC estimates vary based on the campaign. For instance, ad costs for Instagram will likely rise during major events or holiday like Black Friday, Thanksgiving, Labor Day, and Cyber Monday.

Instagram Ads compared to Facebook Ads

Facebook and Instagram are two of the most successful social media advertising platforms out there, which is why comparing the two makes sense. Which platform offers your business the most cost-effective option, and gives the best network to reach your audience?

Social Network	CPC	CPM (cost per thousand impressions)
Instagram	$0. 20-$2.00	$6.70
Facebook	$0.97	$7.19

Comparing Instagram and Facebook Ads Cost

In addition to assessing the expense of Instagram and Facebook Ads, it’s important to look at each platform’s demographics. While Facebook can target almost any age group, Instagram thrives when it comes to targeting audience members who are 25 to 29 years old.

Focus your efforts on the social media platform which provides the most value and best results for your ad campaign. Even if you can advertise on one site for less, you can miss the opportunity to connect with shoppers and leads that matter.

From a study done by Rival IQ, where they analyzed 2,100 of the most engaging brands and companies. As shown in the image below, Rival IQ found that out of all social media platforms, Instagram had the highest engagement rate. This means that even if you have to pay a little bit more, your insights will be better in the end.

Rival IQ study

Shopify did a marketing report that shows Instagram users spent $65 on average compared to Facebook, where users only spent $55 per referred sale.

Shopify Marketing Report on Average Order Value

How Instagram Ads Cost Is Determined

While determining ad costs, Instagram follows the same guidelines as its parent company, Facebook. This means that you will be launching a worldwide competition for people’s attention when you launch an Instagram ad campaign.

There are four main factors that decide how much you will pay:

Bid Amount

Your bid amount determines how much you spend on an Instagram ad campaign. You have to decide how much you are willing to pay to get leads. The value of your bid also affects how much you pay.

Instagram has higher bid rates; you will want to be ready to pay more for clicks and impressions.

Let’s say you only have $500 in your budget and your bid amount is $2 per click, you get only 250 clicks on your ad. But, a $1,000 budget with a $2 CPC gets you 500 clicks. Having a bid amount of $0.50 in the same scenario would allow even more clicks with those two budget amounts.

Relevance Score

Your ad relevancy score will also affect the cost of your Instagram ads. Your relevancy score is how relevant your ad is to Instagram users who will see your ad.

Instagram strives to give users relevant content in their feed. They’ll base your score on how users respond to your ad.

Estimated Action Rates

The estimated action rates will also affect your Instagram ad cost. According to Instagram, the rate is dependent on the probability of users acting on your ad. Basically, they want to gather how likely your audience will interact with your ad.

These interactions include actions such as clicking and converting. Instagram wants to promote ads they think users will engage with and connect with.

If Instagram believes it’s likely that more people will interact with your ad it will be put first. This means you will get a lower bid amount, which will help you gain more leads and conversions.

Competition

Competition will always affect the price of your Instagram ads. When you try to reach a specific demographic of people, there will always be competitors trying to reach that same group. Your competition could cause the cost of your Instagram ads campaign to change.

If other people are bidding to target the same audience, this can lead to a bidding war. Businesses will need to outbid each other to get the top spot. This means that your CPC might go up trying to bid against competitors.

There are a few additional factors:

Holidays and events: Competition during holidays, especially Christmas, is significantly high. More businesses are competing to achieve desirable leads that push CPC upwards. You will need to recognize holidays and events around the time when you run your ad and budget for it.
Day of the week: Instagram users engage more on weekdays than on the weekends. This means you should plan to pay more for running an ad on a Tuesday compared to a Sunday.
Gender: Advertising to females ends up costing more than males. Females are more likely to interact with and engage on Instagram, so getting to female viewers will cost you more.
Target Market: The market that you aim to reach for influences the cost of your Instagram ad. It’s more expensive for B2B companies to run ads because Instagram has fewer businesses than people. Due to high competition some industries, such as apparel, are more expensive.

Even though Instagram ads are more expensive, advertisers do have control over how they allocate their budgets. You can choose, for example, between a daily budget to restrict the amount spent every day or a lifetime budget, which is when you set up your ads to run for a specific length of time before the budget is gone.

How Do Instagram Ads Work?

Instagram ads are paid content that appears in Instagram stories and news feeds. Instagram ads are aimed at users that are likely interested in your product or services.

People see Instagram ads that are based on their demographics and interests. Such advertisements are designed to effortlessly blend into the point that users don’t even recognize them as advertisements

There are two indicators that posts are paid advertisements. The first indicator is the world “sponsored” that is under the company’s name.

Leo Designs Chicago sponsored ad

The second indicator is the call-to-action (CTA) seen at the bottom of the post. Typically, these have phrases like “shop now,” “learn more,” or “book now,” depending on the goal of the campaign.

Biossance call-to-action ad

How To Lower Instagram Ads Cost?

When it comes to social media advertising, you want to do whatever you can to reduce advertising costs. Below are a couple of best practices that can help you reduce the expense of your Instagram ads and maximize your return.

1. Use Automatic Bidding

If you haven’t used Instagram ads before, using automatic bidding for your campaign is beneficial. For you, it’s a simple way to get a bid that’s right for your campaign.

Automatic bidding is the best way to go if you don’t have any historical data informing you of a good CPC to set for your campaign. This will help you determine the bid amount that matches your campaign.

By using automatic bidding, you are preventing your company from overbidding to run an ad. The shortage of previous data can make it tough for you to know the right bid amount. You might bid more than you need to.

Automatic bidding is a smart way to minimize the expense of your Instagram ads.

2. Use Precise Targeting

When setting up your Instagram ads the goal is to target people who would be interested in your products or services. Use precise targeting to reach your desired audience

Instagram lets you target people by:

Location: You can target people based on their geographic location. It can be as broad as a country or as specific as postal code.
Demographics: The most common way to target leads is through demographic information. This information includes gender, age, and race.
Interests: As people communicate on social media, you see where their interests lie. Whether it’s design or tech, you can target people directly based on what they like.
Habits: When someone takes particular steps to browse your website, based on those behaviors, you can target them.

By using precise targeting, you will reach more people who are interested in your products and services. This means that your ad copy will become even more relevant to them, helping you get a higher ad rank and a lower CPC. This would also result in a rise in sales which will help cover the costs of running the campaign.

3. Set Goals

Setting goals will help maintain focus on what you want to accomplish with your advertisement.

There are three main goals you should focus on attaining with your Instagram Ads:

Awareness: You should concentrate on growing awareness about your company, brand, product, app, or service through an awareness campaign. You want to call attention to it, and help people be familiar with it. For this goal, you will focus on running a CPM campaign.
Consideration: If your goal is consideration, then you will focus more on educating your audience. You’ll want to give more persuasive information to your audience, which will get them to convert. To this end, you will focus on earning clicks, views, and leads.
Conversion: Many businesses aim to get their customers to buy their goods, install their apps, or use their services. If you focus on conversions for your campaign goal, you want to have a persuasive copy that will get your audience to buy your products or use your services right away.

You will have a much more cohesive campaign, by setting goals. Effective ad copy leads to greater interaction and conversions.

4. Make Relevant Landing Pages

Most businesses make the mistake of directing leads to their home webpage after clicking on their Instagram ad. This does not promote engagement, since, people are not led to an ad-relevant landing page. If a user is taken directly to the product they see in the ad, they are more likely to convert.

When a customer is taken to the product directly, they are more likely to convert. This will help recoup the costs of running your campaign.

5. Test Your Ad

You must test your ads to make sure you put out the best version possible. At this stage, many companies look for professional help with marketing assignments because testing your ads lets you make a more relevant copy of the ads. Relevant ad copy means you will have a higher ad spot, leading to a lower CPC.

How To Launch Instagram Ads

There are three ways to start running ads:

1. Instagram App

You can share posts that you’ve already generated on Instagram by accessing ads in the Instagram app. You go into the app and choose the post that you want to promote. Once the post is selected, it can be launched as an ad.

You can start monitoring how many people see your post and engage with it once you have launched your promoted post.

Instagram Ads uses the same Ad Manager tool as Facebook. It’s simple and secure if you’d like to run ads through this program.

By using Ads Manager, you can organize your campaign, make adjustments to your campaign, and measure the progress. It’s a good way to run an advertising campaign for Instagram.

3. Instagram Partners

If you do not have a lot of time or need extra support, you have the choice of using Instagram partners. You’re working with proven experts with Instagram partners, who are vetted by Instagram. They’ll help you purchase ads and deliver valuable creative results. For companies that don’t have the experience, it is a perfect alternative.

Check out our list of Killer Instagram Ad Examples of 2020 for some inspiration and more tips for your future ad campaigns. We’ve spilled tons of secrets that are sure to help you up your Instagram ads game.

If you’re ready to begin earning more valuable leads with your Instagram ad campaign and maximize your Instagram advertising costs, don’t hesitate to reach out to our Instagram ad agency.

Are Instagram ads worth it in 2021?

Instagram ads are definitely worth it if you’re a brand selling physical products that are visually appealing. In the context, most people go to Instagram to buy fashion items. It has become a marketplace for inspiration.

It’s why we don’t recommend Instagram ads for every brand but as a rule of thumb, if you are selling to consumers then you should advertise on Instagram. From Internet service providers to camping equipment, Instagram is the ads platform to be if you want to gain more visibility and sales.

Is paying for ads on Instagram worth it? Yes, we truly believe so. After having helped hundreds of brands grow with Instagram ads, we’ve seen its potential. It’s a very competitive market. You might do it yourself and be highly unprofitable.

Don’t hesitate to reach out if you need consulting advice or someone to take care of your Instagram ads campaign. It’s what we love the most!

How much does it cost to advertise on Instagram?

Instagram is known for its unique visual style that mixes bright and lively artsy shots with videos full of action. Advertisements through the platform also follow the natural format of user posts, which doesn’t interrupt the viewer’s session.

How do you go about trying to buy Instagram ads? We’ve developed a guide with all the steps you need to follow to create a budget for your campaign and gain a better understanding of how much your Instagram advertising will cost.

Instagram ads cost

Your Instagram ads cost depends on the bidding option you choose. Facebook gives you the choices of cost per click (CPC), cost per thousand impressions (CPM), cost per action(CPA) or cost per like. You can also choose between automatic and manual bidding.

According to eMarketer, Instagram’s average CPM is between $5-$6 on the buyer side and the average CPC is calculated to fall in the range of 56 cents and 72 cents.

Let’s learn in detail how each of these factors impacts the final cost of your Instagram ads.

Related: An advertiser’s guide to Instagram.

How Instagram calculates ads cost

Instagram follows the same rules as its parent company, Facebook, when calculating ad costs. There are a few variables that ultimately determine how much you will pay.

Bid price. The bidding amount tells the platform how much you’re willing to pay for your ad to be placed. Manual bidding tells Facebook the highest price you’ll pay and automatic bidding has Facebook choose your bid to match the best price for the most engagements.
Ad quality and relevance. Facebook gives a score to ads based on how relevant they are to the audience being targeted and how people react to it. Your score increases when people react positively to your ad and decreases if people respond negatively, such as hitting the “hide this” button. Ads with a high relevance score are placed over lower scoring ones.
Estimated action rates. This number represents how much Facebook thinks a person will perform the action an ad is optimized for (such as downloading an app or visiting a website).
Audience targeting and competition. The cost of advertising on Instagram increases when there are other advertisers competing to show ads to the same audience. Keep in mind the people you’re targeting and if others will be trying to land the same spot.
Time of year. With all advertisers fighting for ad space during the heavier advertising periods of the year, such as during the holidays, prices tend to increase because of the level of competition. Consider this variable before preparing your budget.
Placement. Allowing Facebook to place ads on their other networks, such as the main Facebook platform and the Audience Network, helps reduce the average cost of your ad.
Optimization of ad delivery. Just like in other ad platforms, be sure to optimize your ads for the results you want. Develop a targeting plan to ensure your ads end up in front of people that are valuable to you, increasing your chances of having your ad placed over a competitor and driving down your costs.

Related: The complete list of Instagram ad specs

Instagram ads budget

Through Facebook, your budget is either set daily or over the lifetime of your campaign.

With daily budgeting you decide the most you want to spend a day. Once the limit has been met, Facebook won’t place any more ads for the rest of the day.

Minimum budgets for your Instagram ads are calculated as a daily amount and apply regardless of the budget option you chose.

If you’re using USD, AUD, CAD, SGD, JPY, NZD, TWD, EUR, CHF, SEK, HKD, GBP, ILS, NOK, KRW or DKK, your minimums should be as follows:

At least $1 a day for ad sets charged for impressions.
Ads charged for clicks, likes, video views or post engagement need a daily minimum budget of at least $5 a day.
The daily minimum budget for low-frequency events, such as offer claims or app installs, need to be at least $40 a day.

Using any other currency besides the ones just mentioned does change the amount you’re allowed to put for a minimum.

At least 50 cents a day for impressions.
If you’re being charged for clicks, likes, video views or post engagements your daily minimum needs to be at least $2.50.
Low-frequency events, such as offer claims or app installs, need to be charged at a daily minimum of $20 a day.

A lifetime budget has you decide how much you want to spend for the duration of the campaign and allows Facebook to average it out each day. The performance of your ad, whether it does well or poorly, will determine how frequently your ads will be placed and how much they will cost.

You are ready to buy Instagram ads

Now that you know the costs of buying Instagram ads are similar to Facebook’s, moving efforts to include Instagram in your advertising plans should be a pretty easy step. However, be sure to keep in mind how the style of Instagram differs from Facebook and edit your ads to follow the Instagram model.

Looking for other platforms?

LinkedIn ads cost
Facebook ads cost
Twitter ads cost
Snapchat ads cost
Pinterest ads cost
YouTube ads cost

by Taylor Schaller

How much you need to invest in advertising on the example of well-known brands - Marketing on vc.ru

Marketers of the International Marketing Group advise you to start investing 5% of the company's income in advertising, referring to world experience. And according to the research and consulting company Gartner, firms spend an average of 5-10% of their budget on advertising.

1775 views

But the more competitors the company has and the more customers the company wants to get, the more money it has to spend on advertising. But the good news is that advertising works in the long run. If the company has reached the “top” and is remembered by the consumer, advertising costs can be reduced. nine0003

It is clearly seen how advertising affects brands' income in the long run, using the example of companies that produce appliances.

Pay attention to how much Apple spends, this is only an estimate, it is a figure calculated from indirect indicators. There are no real numbers, the company hides its spending on advertising since 2016. But in the previous 10 years until 2016, the company spent far more than its competitors on advertising. So according to data for 2016, Apple, in terms of money, spent 3 times more on advertising than their main competitor Samsung. But the low percentage of advertising that the company spends now is the merit of the fact that Jobs invested heavily in advertising while he was at the helm of the company. nine0003

In this sense, the history of Apple is generally very revealing. At the beginning of the company's formation, when Jobs was one of the managers, things were going well, and products were being bought, and vice versa, without Jobs, all new products “failed”, because Steve Jobs had a huge budget for advertising each device, and on the contrary, without him there were no luxury advertising companies. Do you remember that Apple QuickTake camera? No? Not surprisingly, its advertising was not invested. And Macintosh computers are still alive today. True, they are now known under the short name Mac. nine0003

In 1984, Jobs spent $900,000 on Macintosh ads and paid another $800,000 for a single broadcast during the National Football League finals. In modern money, this is 3.5 million dollars! They paid off in full.

Samsung did not have so many high-profile advertising campaigns.

And Xiaomi without a big name, and advertising budgets have a very modest income compared to the giants.

On the example of the advertising technology market, you can understand how advertising generally works. People are very conservative and do not like to change the product they are using. In the United States and Russia, studies were conducted: they asked people how many brands they could name from those that they saw yesterday in commercials. On average, people named 3-4 brands that were well-known before. The human brain does not like advertising, considers it "garbage" and does not "see" it. Therefore, existing since the 70s Apple and since the 30s Samsung have already made a name for themselves and regularly drip on the brain of buyers to remind them of themselves. And Xiaomi, which has existed since the 10th year, with a modest advertising budget, is simply invisible to the consumer, this must be taken literally! And people are reluctant to change habits. They must understand the obvious benefit in order to change the familiar brand. Therefore, the younger the company, the louder it should declare itself, and the more it should invest in advertising. nine0003

Banks are another example of a return on investment in advertising. We took the three most popular banks in Russia and compared their advertising spending and the income the banks came up with. But more than net income, other figures are more interesting - income growth compared to last year. There is a direct connection here: the more banks spent on advertising, the more money customers brought to them compared to last year.

With banks, however, the situation is somewhat different than with goods that are bought from time to time. Loans or deposits are long-term projects and people take them once in a while, definitely much less often than smartphones. Here, advertising should work not to keep the brand in the head, but to convey benefits. Otherwise, the methods are the same - to be shown to the consumer more often. nine0003

In the area of scrap metal, in which we work, the scrap metal portal "Sdavalych", the situation is even more interesting - the goal of advertising there is to be the first to catch the eye of the consumer, most likely the consumer will not go further than the second ad. Often scrap metal is a problem, it is important to just get rid of it quickly.

Therefore, scrap metal companies can spend only 1 to 3% of their turnover on advertising, which is a small amount to attract a customer with cheap scrap.

So it's definitely worth investing in advertising, and we agree that 5% is the golden mean. But when, how and how much depends on the niche, competition, long-term investment of the client and expected results. The correlation is direct, alas, we cannot say anything new here - if you want to get more, spend more. nine0003

❗Instagram Paid Advertising and How to Use It Effectively

Even though Facebook and Instagram ads are set up using the same Ads Manager control center, the ad costs on these social networks are different. 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. nine0003

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 it worth the money?
Pricing factors
Average rates
How to get the most out of your ad budget

What follows is a quick 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 broadcast 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. nine0003

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 customizations suggested based on interests, behaviors, and other demographics,
or building your own custom audience using Facebook Pixel toolkit or SDK, email lists, other sources, it is possible to succeed in attracting the right people in the process of conducting retargeting campaigns and finding new customers.

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. nine0003

External links

Instagram does not currently support hyperlinks in regular 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. nine0003

Longer videos

Videos can be up to 60 seconds long in the feed and Explore tab, and up to 15 seconds in story view. 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. nine0003

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 counts all clicks on an ad, 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. nine0003

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. nine0003

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. nine0003

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. nine0003

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. nine0003

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. The result is an increase in both the total number of options available across both platforms and the volume of ad impressions, reducing competition across three of Instagram's current ad placements (Feed, Stories, and Explore) and lowering costs.