What’s the Cost of Instagram Ads?

How much do Instagram ads cost? What services do you need to make the most of ads on Instagram? How can you save on Instagram advertising costs? Keep reading to find out!

These days, our online lives are more connected than ever, with profiles and histories from one app colliding with other platforms in a synchronized dance that’s meant to extract the most meaningful data possible. Google owns YouTube, Meta owns Facebook and Instagram, and on it goes. 

As a business owner, you can take advantage of all that data and harness the power of countless algorithms to target an audience that is ready to hear your message. You know you need to advertise, but does the cost of Instagram ads justify the cost? And now that we’re asking that, what exactly is the cost? Let’s get into it.

What Are The Different Types of Instagram Ads?

If you’ve been scrolling through your feed on Instagram, you’ve more than likely stumbled upon ads that are so well-curated that they seem like an organic post by someone you already follow. Depending on the goal of the campaign, Instagram ads will be visually set apart by a frame and one of 18 different call-to-actions, or CTAs, including things like “learn more,” “visit site,” “download,” “buy now,” and other ways to get potential customers to engage with a post. 

Here’s what advertisers have to choose from:

Story ads: Millions of Instagram users are checking stories every day. For businesses, this is the place to showcase high-quality video work featuring targeted ads for your products and services. And they get views, boasting a higher engagement rate than typical feed ads. They’re a great way to connect with your audience and tell them about your company. Better still, there are no other distractions when a user chooses to focus on your ad. Story ads can be one or several frames long, at 15 seconds each, along with a clear CTA that allows users to take a desired action.

Photo ads: These are the old standby that you are probably thinking of, and they are what they say–images that show up as a user scrolls through their feed, differentiated by a square or portrait-style frame. Photo ads always include a CTA button and a “sponsored” label to set them apart from other posts. Since customers will be focused on your image, it had better be a good one–the highest-quality, original image you can use, the better. Remember too that the whole Instagram style is individualistic and a touch quirky–you want your image to stand out and foster curiosity. It should fit in with your audience’s feed, while still conveying something important about your brand.

Video ads: These are like a photo ad, in the sense that it shows up in your audience’s feed, but instead of a still image, you’re using a video that can be up to 60 seconds long. That’s a pretty long ad! To attract and hold a viewer’s attention, these need to have an eye-catching style that fits in with other content in the viewer’s feed, but is just that cut above that grabs their attention. Videos start playing as soon as a user has them in their view, but they are silent by default–the user has to opt in to hear the message. Be strategic about when you choose to include important, audible information. 

Carousel ads: These are an offshoot of photo and video ads, just at a larger volume. You can choose to include up to ten photos or videos in one post, which is ideal if you’re showcasing a collection of products, services, qualities, or an array of applications. It’s a great way to display the variety that you offer, and it can be more engaging to a wider audience. Here’s one way to customize what your audience sees: you can choose to show carousel ads in the original order you’ve arranged them, or you can opt to show the best performing ads first. That little switch might be the thing that gets and keeps their attention.

Shopping ads: A good portion of your target audience (up to 44% of users!) is likely shopping on Instagram week in and out. If your account has Instagram Checkout enabled, built-in shopping features enable users to view and purchase your products and services without even leaving the app. They’re directed to a product description page that facilitates purchase via your mobile website–it couldn’t be any easier! 

Collection ads: These are essentially a combination of carousel ads and shopping ads that allow you to showcase items taken directly from your company’s catalog. A collection ad combines a larger cover image with three smaller product images. When a user clicks on this ad, they are taken to a full-screen landing page and are then able to purchase your product. Collection ads are ideal for ecommerce companies.

Explore ads: Instagram users have options when using the platform, including an “Explore” tab that curates new and trending content, tailored to a user’s preferences and habits. Image and video ads can be placed here, too, and will expand to a full post when a user clicks on it. From there, the protocol is the same as for other ads–a user is offered a way to purchase, download, or otherwise connect with your company. For users who like to keep up with newness, ads in the explore section could end up being more visible and relevant. 

Reels ads: Instagram reels are 15-second multi-clip videos that include audio, effects, and various creative tools. Ads can be placed within the reels section, much as story ads show between stories of followed accounts. These full-screen vertical videos clearly feature a “sponsored” label and offer users a chance to engage with your company and your offerings. Crafting reels ads requires a creative touch to ensure that they organically fit in with surrounding content.

It could seem overwhelming that there are a full eight different types of Instagram ads to choose from–don’t let it be! Oftentimes ads can easily be tweaked or reinterpreted across various locations on the app to allow for the widest reach. Whatever your end goal, with some expert help on your side, you’ll be set up for success.

How To Get Started Using Instagram Ads

Now that you can see all the ways that you can potentially interact with and engage future customers, you could be itching to get started. “But our business doesn’t have an Instagram account,” you might be thinking. No problem! Our social media marketing team can either set up a new account for you, or (since Meta is the parent company of both Facebook and Instagram) set up a Facebook Business Page. 

That being said, having an Instagram account and getting to know how things look and work can help you to make better decisions about your preferred ad options. No time to scroll? No problem! Our PPC advertising (pay-per-click) team specializes in this stuff, and they’re ready to take on the challenge of getting your business out in front of the eyes and ears of your target audience.

How Much Are Instagram Ads?

First off, let’s get clear on the terms here:

CPC - Cost Per Click: the cost of each click your ad receives based on the total cost of the ad – if you spend $500 and get 1,000 total clicks, you’ve paid an average of $0.50 per click.

CPM - Cost Per Impressions: CPM actually means “cost per mille” which is measured at 1,000 impressions – this is tracking how many times your ad is viewed, whether the potential customer clicks on it or not.

CPE - Cost Per Engagement: CPE is measured by dividing the advertising cost by the number of “engagements” your ad has produced (e.g. comments, shares, follows, likes).

On average, businesses that are advertising on Instagram can spend as little as $0.25 or as much as $2+ per click, anywhere from $4 to $10 per 1,000 impressions, and from $0.03 – $0.11 per engagement action. From a monthly point of view, that could be as little as $500 per month, or as much as $5,000 per month, if it’s the best place to find and interact with your targeted audience. How much you should spend on monthly Instagram ads will depend on your budget, your target audience, and the return you’re likely to see from the investment.

Now that you know the relevant averages, you’re probably wondering what determines Instagram advertising costs. The simple answer is that your Instagram ad costs depend entirely on you and your determined monthly budget. It’s also worth noting that Meta recommends starting with at least $5.00 per day, or roughly $150 per month for each ad campaign you run. 

Regardless of how much you end up spending, performance is based on five key factors:

• Bid amount: This is the total amount you’re prepared to spend on ad clicks, which you’ll bid in an ad auction. Spending less or more will control the overall amount of clicks that you can achieve. That can affect how many people see and interact with your ad. Just know that the more you spend, the more Instagram will push your ads.
• Ad relevancy score: When platform users click, comment, like, and share your ad, or visit your website’s landing page, it’s clear to Instagram that your company is striking a positive chord with your audience, and your ad will be placed above ads that aren’t doing as well. Instagram wants to show relevant ads, so a higher score means your ads are seen more often and can generate more business.
• Estimated action rates: This metric measures the probability of an Instagram user taking some sort of action after seeing your ad–think of a sale or a page visit as the ultimate desired outcome. Instagram determines this rate, and if they feel your ad will do well, they may offer a lower cost per click and list your ad over others. Your bid price could end up lower and you could widen your reach.
• Competition and timing: Regardless of your target audience and their respective demographic, there will nearly always be a similar company looking to reach their eyes first. Costs per click can go up drastically if you and your competitors get into an ad bidding war. One way to work around this is to focus on timing, which requires some skill to determine the more affordable hours and days when users are most likely to see and interact with your ad.
• Target audience: If you’re looking to attract a key demographic that’s already being shown a plethora of similar ads, that’s called a saturated market, and Instagram can charge a premium if you want to enter that market and still be seen. A wider audience will generally cost less due to lower competition.

A few other data points that can increase competition and affect Instagram ad cost:

• Holidays and events
• Targeted demographic gender
• Time of year
• Business vs. personal 
• Your business sector

That’s far from all you need to know, though. Let’s dive into some key ways to make the most of what you’re spending on Instagram ads.

The Cost of Instagram Ads: How To Get The Best ROI

Clearly, playing the Instagram ads game to win means you need to start with a stellar ad. Investing upfront in high-quality videography, graphic design, web development and copy writing that will land well with your intended audience means that an ad campaign on Instagram could essentially co-op the cost–your high quality content could be seen for a lower overall ad cost. On the other hand, low quality marketing material (e.g. graphics, ad images, videos, website) that doesn’t resonate may be cheaper initially, but it could cost you in the long run.

The good news is that if your targeted audience is on Instagram, ads on the platform are known to deliver high conversion rates. That means that for every ad dollar spent, you’ll be getting more back than if you were to advertise using the same ad on other platforms. The key, then, is to be sure that your ad campaign is stellar. To make money, you’ve gotta spend it, and social media advertising is no exception. And it isn’t a one-and-done situation either–Instagram ads work best when they’re tracked, analyzed, and reworked to best reflect what the data shows.

If all goes to plan, when your clients are using Instagram, ads will blend in so seamlessly with their usual feed content that only the frame and CTA will set it apart. That’s the goal–hitting the target so perfectly that users can’t help but interact. But to achieve that, you’ll need a whole team behind you. Here’s how our digital marketing experts can help you make the most of your Instagram ads:

• Utilize automatic bidding when starting out, as a trial run to gather data to inform future bids and eventually graduate to manual bidding.
• Precisely target your ad audience through demographics, location, online behavior, and adjacent audiences.
• Set goals to build a cohesive ad campaign and keep it targeted, focused on increasing awareness and conversions.
• Build and maintain relevant, cohesive landing pages for each ad to encourage engagement and conversions (AKA purchases and leads!).
• Test and rework an ad to get the best version out there in front of interested eyes.

Using these tried and tested methods to optimize your Instagram ad campaign ensure that your dollars aren’t wasted, and that you are attracting and engaging with your target audience. Sound like a big undertaking? We agree. That’s why it’s hard to hit all these points while also running day-to-day operations and managing a workforce. This is the time you turn to an expert and work with an experienced digital marketing team to make the absolute most of your marketing budget.

Phew… that’s all we’ve got ATM, but you can trust that if you want to go deep on Instagram ads, we’re more than ready to talk shop. Our social media marketing specialists know how to make the most of all the options available to you, and our video marketing and web development team ensure that when a potential customer engages with your ad, they find a relevant landing page with snazzy graphics and a level of quality that instills confidence. Turn leads into customers and make the most of your advertising dollars. But don’t take our word for it, check and see what clients are saying! 

If it sounds like Instagram ads are where your future leads may be, it’s time to take action! Get in touch with us today to learn more and set up your next social media marketing campaign.