Instagram Ads Cost

How Much Does Instagram Ads Cost in 2022? [Tips to Reduce the Cost]

In this particular blog we are going to have a detailed analysis, of how much it costs to advertise on Instagram and why should we prefer this platform.
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Table of Contents

What is Instagram?

Instagram is one of the top social media platforms with a gigantic 1.4 billion users worldwide since its journey started in 2010 by the founder members Kevin Systrom and Mike Krieger.

Looking at the potential of the application, Facebook was keen to acquire its ownership which it successfully did in 2012 by paying a huge sum of $1 billion.

The application is free to download and use, and you are in need to pay only if you want to use any additional service provided by it like an advertisement, analysis, etc.

Instagram gained its popularity, after its acquisition by Facebook and the introduction of story feeds in 2017. The introduction of story feeds was like a golden move for Instagram, as presently more than 500 million stories are uploaded on the platform on daily basis.

Being such a useful application, it’s bound to attract the attention of businesses to promote their product and thus it becomes equally important to know how much Instagram Ads Cost.

Difference Between a Regular Post and a Promoted Post

The reach of a normal post on Instagram will be limited to the number of followers the owner of the post is having. Neither are you allowed to add a call-to-action button or link to a normal post which can generate some leads or sales.

On the other hand, a promoted post means you are paying for increasing the reach of the post, and it will reach even those who are not a follower of the publisher. You are allowed to add a call-to-action button or link which can lead the viewers to a lean generation form for a sales page.

When we are talking about how much it costs to advertise on Instagram, we are only talking about promoted posts, as the regular post is free, but has a lot of limitations. In the roadmap to study how much it costs to advertise on Instagram, it is super important that you understand the differentiation between the two different types of posts.

Reasons to use Instagram Ads

As we can see Instagram Ads are growing in popularity and it has already surpassed most of the other social media platforms in terms of revenue from advertisements.

1. Targeting

Instagram ads are based on Facebook’s advertising system and you can set up the ad from the Facebook ads manager or directly from the Instagram ads manager. All the features of Facebook ads manager are available on Instagram like defining customer avatars based on location, demographics, interest, and behaviour.

2. Audience growth

Since its launch in 2010, Instagram is one of the fastest growing social networking platforms which has acquired more than 1.4 billion active users and 25 million registered businesses.

This phenomenal growth rate is bound to catch the attraction of all and its appropriate platform to invest in and showcase our ads.

3. Attention

On average users spend 53 minutes a day on the Instagram platform, which shows the capability of the platform to hold the users, as many have commented that they keep on scrolling their Instagram account for 5-6 hours.

4. Results

Most of the time the result of your ad campaigns depends on how well you have designed the ad and how you have selected the customer avatar and what CPC you are targeting.

But if you use hashtags like #ad #promotion etc Instagram algorithm pushed the post on its own.

5. Curiosity

More than 50% of Instagrammers are connected with at least one brand and are willing to receive regular updates from it. It shows the curiosity among Instagrammers to know about different brands and most of the buyers on the internet admit that they decided to buy after seeing an Instagram post.

While studying how much it costs to advertise on Instagram, it’s important to know why we chose this platform over others, then only you can justify your investment.

Different Types of Ads You can Make on Instagram

Instagram offers you four different types of ads which you can utilise depending on your requirements and the demand of the situation also to support your creativity while creating these ads Instagram offers a few default settings and filters which can be applied to make the ad look attractive.

1. Single Image Ads

If you need to share limited data which can be covered through a single image, this type of ad can be best suited to you. With just one image you can create six different types of ads at no additional cost.

Also, you must add a call-to-action button like “contact us”, “sign-up”, “buy now” etc at a suitable place in the ad, to increase the ROI of the ad.

2. Single Video Ads

You can create a video which can be a maximum of 60 seconds long and have all the information about the product to run on Instagram.

Unlike Images, one video can be used for one ad only, but here you can add a call-to-action button link in the case of single image ads. These are one of the most successful ad formats offered by Instagram as they can leave a long-lasting impression on the viewers.

You can pick multiple images to demonstrate your advertisement by the means of carousel ads, as they allow up to 10 images to create an ad and also if required you can use videos to increase the efficiency of your ads.

Carousels are a great method to knit a story related to your product which is most likely to impress the viewer and he will end up buying the product.

4. Slide Show

These may look similar to carousels but as a slide show, it allows you to create a looping video ad with the most 10 images.  

So far, it’s an amazing journey since we are discussing how much it costs to advertise on Instagram, and now things are getting exciting as we are going to start the next section related to the factors which determine the cost of advertisement on Instagram.

What determines Instagram advertising costs?

There are many factors on which the Instagram advertising cost depends, and out of them, we have selected the four most important factors which are decisive to decide the cost of advertisement on Instagram.

1. Ad relevancy score

Never show something irrelevant to your audience, when you are trying to promote your product on Instagram product because it will impact your ad relevancy score.

Instagram analyses how relevant your ad is and depending on that the cost of the ad also depends as a better relevancy score means you have to pay closer to the minimum amount and the lesser the relevancy score the more you have to pay.

You get a positive relevancy score when people show positive intent to the ad example they like, comment or share the ad whereas any negative comment or blocking of the ad impacts the relevancy score.

2. Bid amount

The bid amount is what you are willing to pay whenever your ad is clicked, like if your ad budget is ₹1000 and your bit amount is ₹10 per click you will get 100 clicks for your ad.

The equation is very simple, the more the bid amount is, the higher preference it will get from Instagram, and when the competition is very high on the Instagram platform, you are required to do deep research on the bid amount before selecting anything blindly.

Well when you are intended to learn how much it costs to advertise on Instagram, the bidding strategy is the most significant thing that you need to concentrate on.

3. Competition or Size of Targeted Audience

Whenever you are trying to create a customer profile and target your ads to them, there will be definite competition as others are also trying the reach the same bunch of people.

The competition faced has a lot to do with the cost of advertisement because the lesser the number of targeted audiences, the greater will be the cost of advertisement.

4. Estimated action rates

Your ad can engage the audience through a higher rate of clicks and comments, which is an important factor to decide the cost of your advertisement.

Instagram analyses the engagement factor of your advertisement as its algorithm promotes those ads which are more likely to catch the attraction of the viewers, and thus will such ads will cost you lesser.

Let’s see how much it costs to advertise on Instagram.

Though there is no fixed cost for an ad on Instagram and solemnly depends on all the factors discussed above and a lot of small factors too like which gender you are targeting or which age group is your target, the cost of advertisement varies but here are some data related to Instagram ad cost which you will enjoy. 

·  The average CPC (Cost Per Click) for Instagram is $1.09

·  The Average CTR (Click Through Rate) on Instagram is 0.68%

·  On Instagram, the Story Feed has the highest CTR of 0.76%

·  On average Instagram advertisement costs between $0.2 to $6.7 which depends on the bidding model

·  For CPC the cost paid ranges between $0.2 to $2 per click

·  For CPM (Cost Per Thousand Impression) the advertisers pay an average of $6.7 per thousand impressions.

·  The CPE (Cost Per Engagement) ranges from $0.01 to $0.05 per engagement.

How to lower the cost of advertisements?

When we are studying how much it costs to advertise on Instagram, it is equally important how to reduce the cost of advertisement which can be very beneficial.

If you want to reduce your cost of advertisement on the Instagram platform here are some best practices which you can follow:

1. Use to-the-point targeting

When we are setting up an Instagram ad, we define our customer profile which we want to target and according to the profile selected the audience size is decided.

The customer profile can be created based on location, demographics like gender, age, race, etc interest, and behaviour. You can even create a lookalike audience if you feel that the audience size selected is too small or your CPC is getting high so that the ad budget can be controlled.

While setting the custom audience, if you use precise targeting, you get to reach more people who are interested in your products and services. This means your ad copy will be more appropriate to all those who are receiving the ad, which will permit you to get a higher ad rank and lower CPC.

2. Test your ad

Before you completely launch an ad, do A/B testing to check which format is working better for your product.

A/B testing means you create two or more different models of advertisement by experimenting with the image, headline or captions and allotting a small ad budget to all varieties, and checking which one is working better.

In this way, you can concentrate the maximum ad budget on the particular ad which is performing better for you and which is most likely to get converted into a result.

3. Use automatic bidding

If you are confused about what should be an appropriate bidding strategy, then let Instagram decide which works best for you by allowing the automatic bidding option.

The algorithm working for Instagram checks the ads constantly and decides which ads are performing well and it pushes them more you will be prevented from the problem of over-bidding or under-bidding and the best thing is, your ads will reach the desired customers as well.

4. Set goals

When you start to design your ads there should be a clear thought about what you want, and even when you are creating the ad campaign, you pre-decide about the location, demographics, interest and behaviour to be targeted.

Even this is not enough, as you need to have clarity on whether you want engagement or you need to generate leads and whether you are willing to spread awareness about your product or you want to convert them into sales.

It is always crucial to set your goals beforehand as without goals it is meaningless to run in the middle of the ocean in all directions.

5. Create Catchy Landing Pages

Whenever an advertisement is created and run, the call-to-action link mostly takes the viewer to a new destination, which only contains information about the product and a lead generation form or a buy now button.

This new destination where the user lands are commonly known as a Landing Page, and it mostly contains only one clickable link to prevent the probable buyer from all kinds of diversions.

The design and how optimised the landing page is, matter a lot on the road to success for a business and that’s why should carefully do it.

FAQs

Why is Instagram advertising so important?

After Facebook, YouTube and WhatsApp, Instagram is the fastest growing social media networking platform with more than 1.4 billion users and 500 million story posts on daily basis.

When it comes to product promotion, such a heavily crowded platform can’t be neglected at any cost as you never know from where a good leader can come to your business.

How can I learn to post advertisements on Instagram in an optimised manner?

It’s not only related to learning Instagram alone because to create an advertisement you need a lot of skills related to digital marketing like graphic designing, automation, copy creation, etc and for learning all of these it is suggested to go for a professional course.

My suggestion would be to check out the 4-month advanced digital marketing course offered by Digital Scholar which has all the modules you need to learn to become an expert in Digital Marketing.

It’s a premium institution with premium quality teaching under the leadership of Sorav Jain, who is the worlds leading digital marketing influencer, and when you get the opportunity to learn directly from him, it will be simply great.

Why should I use Instagram Advertising over others for promoting my brand?

Because Instagram is a leading platform for advertisement where all leading brands are present and more of the users of Instagram love to follow their favourite brand on this platform, which is evident as more than 50% of the Instagram users at least follow one brand.

Do I have the control to start or pause my ads at will?

Absolutely Yes! Instagram gives you complete control over all the ads run by you and also helps with a variety of analytical tools. If at any stage you feel that the result of the advertisement is not what you deemed, and the ROI is on the higher side, you can instantly stop the ad from running.

Written By
Digital Scholar

Digital Scholar is a premier agency-styled digital marketing institute in India. Which offers an online digital marketing course and a free digital marketing course worldwide to elevate their digital skills and become industry experts. Digital Scholar is headed by Sorav Jain and co-founder Rishi Jain, who are pioneers in the field of digital marketing. Digital Scholar’s blogs touch upon numerous aspects of digital marketing and help you get intensive ideas of different domains of digital marketing.

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