How much does it cost to advertise on Instagram?

That’s an important question for any marketer looking to advertise on Instagram. Truth is, there is not right or wrong answer to this question as your Instagram ads cost depends on 10+ different factors.

However, there are a few benchmarks that give you at least a little bit more insight into Instagram advertising cost.

In Chapter 7 of our Instagram Advertising Guide, we’ll explore the answers to the following questions:

  • How much does it cost to advertise on Instagram?
  • How does the Instagram ad bidding works?
  • How to set your Instagram ad budgets and bids?
  • How to select the right ad delivery optimization method?
  • What’s the best way to keep your Instagram ad costs low?

How Much Does it Cost to Advertise on Instagram?

One of the most burning questions of marketers interested in Instagram ads is the potential ROI – how much does a click or conversion cost on Instagram?

Let’s see what different resources suggest.

When analyzing Instagram ads costs in 2017, AdEspresso found that the average cost-per-click on Instagram is around $0.80.

On average Instagram ads cost-per-click is between $0.70 and $1.00.

However, there are many elements determining your Instagram ads’ cost. For example, there’s a difference in Instagram CPC prices for various age groups.

The highest CPC age groups are 18-24, 25-34, and 35-44 year olds – the most valuable age groups when it comes to Instagram marketing.

Instagram ads cost per age

Instagram ads cost per age – Image source

Moreover, Instagram ad costs are higher for brands targeting women. (This may also be the case as less men use Instagram, so you won’t get as many clicks from men)

Instagram ads cost by gender

Instagram ads cost by gender– Image source

One of the most burning questions of marketers interested in Instagram ads is the potential ROI – how much does a click or conversion cost on Instagram?

Compared to Facebook advertising costs, Instagram ads tend to be on the high end of the scale.

AdEspresso’s 2016 analysis on tens of thousands of Facebook ads showed that Instagram is often the most expensive ad placement.

While the cost-per-click of Facebook Mobile newsfeed ads averaged at $0.35, the avg. CPC on Instagram was around $0.70.

instagram advertising cost

Instagram is one of the most expensive ad channels – Image source

After managing hundreds of Instagram ad campaigns, I’ve seen Instagram ads cost anywhere between $0.20 to $2 per click.

Tip: When thinking about your investment in Instagram marketing, think how much a conversion is worth to you and make sure that your campaigns has a positive ROI.

Instagram Ads Have a High ROI

According to Forrester, Instagram ads have the highest engagement rate of all digital ad placements. This means that sometimes, you could pay a little more for a click or 1,000 impressions and still come out as a winner.

instagram ads cost

Instagram ads have high engagement – Image source

A marketing report by Shopify revealed that Instagram users tend to spend the avg. of $65 per referred sale. In comparison, Facebook users only spend $55, and Twitter users $46.26.

 

average order value

Instagram users spend more – Image source

Moreover, Instagram posts have quite a high conversion rate of 1.08%. Even though it’s lower than Facebook (1.85%) it still surpasses Twitter (0.77%) or Pinterest (0.54%).

conversion rate

Instagram ads conversion rate – Image source

In fact, Instagram marketing is so beneficial to brands that the spending on this ad platform is steadily increasing.

According to eMarketer, Instagram ad sales are predicted to hit 2.8bn by 2017 (from $600M this year).

instagram ad spending

Instagram is taking on Twitter and Google – Image source

How to Get Higher Instagram Ads ROI

Instagram is part of Facebook’s ad network, which means that very often you’ll be combining the Instagram feed with other placements.

To get the maximum campaign ROI, use Facebook’s automatic placements option (or a few selected placements), and use your Instagram campaign reports to see if it’s a good place for showing your ads.

In my experience, Instagram ad costs are lower for B2C brands (companies selling consumer products).

instagram advertising

B2C advertisers have the most to win

For B2B brands, Instagram ad costs can be higher as people are not hanging out on Instagram looking to buy some business tools. Read more about marketing your SaaS or B2B products on Facebook.

If all the mentioned Instagram marketing costs and potential ROI sounded attractive to you, keep reading to learn how the Instagram ads bidding and budget setup works.

How Does Instagram Ad Bidding Work?

Instagram ad bidding works exactly like Facebook ad bidding. After all, both of these ad types are managed on the very same platform.

This means that when publishing an Instagram ad campaign, you’ll be entering a worldwide auction for people’s attention.

There are three factors that contribute to your advertising cost:

  • Your Facebook campaign’s bid – The more you’re willing to pay, the more Facebook will deliver your ads. If you’re going to use automatic bids, there’s a good chance you’ll be just fine.
  • The relevance score – Your ads’ relevance score will directly affect the cost of your ad results and how Facebook prioritizes their delivery in the bidding auction.
  • Estimated action rates – Facebook determines your “estimated action rates” (which are exactly what they sound like) by a number of different factors.
instagram ad cost factors

Instagram ad cost factors – Image source

Basically, what this means is that in addition to a high ad bid, it’s also important to create Instagram ads that are relevant and interesting for your target audience.

How to Set Up Your Instagram Ads Budget

You can customize your Instagram ad campaign’s budget in the Budget & Schedule section, during the Instagram ads campaign setup process.

 

Instagram ads budget

Set up your ad budgets here

 

You can select between two types of ad budgets:

Daily budget: This is how much Facebook will spend on delivering your ads every day during your campaign’s set dates.

Note that when setting a daily budget, you’re setting an average. This means that Facebook will try to get you roughly your daily budget’s worth of the results for every campaign day.

 

Instagram ads pacing

Instagram ads pacing

Lifetime budget: That’s the amount you’re willing to spend over the duration of your Instagram ad campaign.

Important! Once you’ve published your ad campaign, you won’t be able to change the budget type, only the amounts you’re willing to spend.

Selecting Your Instagram Ads’ Delivery Optimization

Depending on the campaign objective you chose at the beginning of your Instagram ads setup process, you can select between several ad delivery options.

But what is this “ad delivery optimization” anyway?

Here’s what Facebook says:

“Your optimization choice tells us what to value when delivering your ad. For example, you could tell us to show your ad to the people in your target audience most likely to click a link to your website (optimizing for link clicks) or to show it as many times as possible (optimizing for impressions).”

Instagram ads cost

When possible, optimize for conversions

Here’s a quick breakdown of different delivery optimization methods:

Conversions – When optimizing for conversions, Facebook will deliver your ads to the people who are the most likely to convert.

Post Engagement – As you bid on Post Engagement, Facebook will show your Instagram ads to the people who might like, comment or share your ad or your promotion.

Impressions – Your ads will be delivered to as many people as many times as possible while staying within the limits of your advertising budget. There will be no optimization regarding who is more likely to engage with your ad.

Link Clicks – Facebook will deliver your ads to the people most likely to click on your ad. You will be charged every time someone clicks on your ad.

Daily Unique Reach – Facebook will deliver the ads in your ad set to people up to once per day. That’s a good way to keep your ad frequency under control.

Brand Awareness – Facebook will serve your ads to the people who are most likely to be interested in your brand and offer. This could be an efficient way to acquire new Instagram followers.

Manual vs. Automatic Bidding

Setting up your ad campaign’s budget and bidding in the Facebook Ads Manager can get quite confusing.

Especially if you look past the default settings and use some advanced options. One of these options is manual bidding.

So which one should you select: manual or automatic bidding?

manual Instagram ad bids

You can set manual Instagram ad bids

 

Automatic bidding – use this bidding method if you don’t know how much a result might cost. Facebook will find the best balance between keeping your advertising costs low while delivering enough results.

Manual bidding – This option lets you set a bid based on what a result/conversion is worth for you.

If you’re just starting out, you should either use the automatic bidding or place your bid following Facebook’s suggested bid.

facebook suggested bids

Use the suggested bids as benchmarks

Tip: You can use a manual bid that’s on the low end of what Facebook’s suggesting.

Always change the Facebook’s pre-set manual bid in the custom bidding box. For example, if Facebook first suggests that you bid €3.50 per link click and the suggested bid range is (€0.70–€2.53), you can place a bid of €1.00 or even €0.71.

Pacing in Facebook Ad Delivery

You may not be aware of this, but whenever you optimize your ad delivery for Conversions, Facebook will give you two manual bidding options: Maximum and Average bid.

 

Facebook Maximum or Average bid

Select a Maximum or Average bid

What’s the difference between an Average and Maximum bid?

With Maximum bid, Facebook’s algorithms won’t deliver your ads if there’s a risk that the cost per result will be higher than you bid.

As you set an Average bid, Facebook will use the Pacing method to optimize your ad delivery for optimal ROI.

Pacing explained by Smartly.io:

“Without pacing the ad set would spend the whole budget in the beginning of the day for more expensive ads and miss the better opportunities in the end of the day. The Pacing algorithm learns the optimal bid over time.”

Facebook ad delivery pacing

How Facebook ad delivery pacing works – Image source

Should you use a Maximum or Average bid?

If your goal is to maximize profit, select the Maximum bid. However, if you’re willing to pay a little more per conversion but get a lot more of them, go with the Average bid.

maximum vs average bid

You can test both options – Image source

How to Keep Your Instagram Ad Costs Low

1. Start With Automatic Bidding

If you haven’t got much Instagram advertising experience, use the automatic Facebook ad bidding.

While it might be tempting to test different manual bidding options, you won’t have any previous data telling you what’s the average cost-per-result. This makes it highly likely that you’ll either overbid or undrerbid and get worse campaign results in the end.

If you MUST use a manual bid, check out Facebook’s suggested bid and keep in mind the Instagram ad cost benchmarks mentioned in this article.

2. Optimize Your Instagram Ad Campaign for Conversions

Optimizing your ad campaigns for conversions is the best way to ensure that Facebook will auto-optimize your campaigns so that you’ll get more anticipated results at a lower cost.

We’ve been impressed with Facebook’s ability to deliver ads to the people actually most likely to convert. Their algoriths have grown to be super smart!

Read more: How to Set Facebook Advertising Goals for Ultimate Success

instagram ads bidding

The quickest way to success

3. Set a Frequency Cap

When you optimize your Instagram ad delivery for Reach (available when the ad campaign’s objective is set to Reach or Brand Awareness), you’ll get the option of Frequency Capping.

Frequency cap lets you set a time interval at which an audience member can see your Instagram or Facebook ads.

 

instagram advertising cost

Cap your ads’ frequency

By setting your Instagram promotion’s Frequency Cap to 3-5 days, you’ll ensure they won’t get bored with seeing your ad too often.

If you want to learn more about Instagram and Facebook ads cost, read these guides:

About Facebook’s Ad Auction – The Official Guide
From 0 to Results. How to Set Up Low-Budget Facebook Campaigns
28 Facebook Advertising Hacks for Skyrocketing Results

facebook ads ebook