Instagram Advertising Cost: Make the Most of Your Budget – Digital Marketing Blog

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Instagram Advertising Cost: Make the Most of Your Budget - Digital Marketing Blog
January 11, 2023 / By Roger Safont

Wondering if Instagram advertising is worth your investment?

In this blog post, we’ll explain everything you need to know about the Instagram advertising cost and show you how to make the most of your budget.

Keep reading to learn more!

With more than 1 billion active monthly users, Instagram has been proven to be a powerful social media networking channel…

…to place digital ads compared to other text-based social media platforms.

If you’re a small business owner and you’re looking to expand your reach, then this type of online advertising is an excellent choice.

Social networks have become one of the most powerful digital marketing tools available today and they can have a huge impact on your bottom line.

With Instagram ads, businesses can create profitable Instagram advertising campaigns that will be seen by their target market on the world’s largest visual platform.

Through the use of precise targeting options such as location, interest, and demographics, businesses can ensure that their ad is seen by the right people at the right time.

Once you’ve chosen your audience who are your potential customers…

…you can then craft an ad with engaging visuals and messaging that encourages users to take action and interact with your brand.

Finally, you can measure how effective your campaign has been through insights into impressions, clicks, likes, and more. 

In this blog, we’ve covered all the important things you need to know about Instagram advertising.

And ultimately, the COST of advertising through this powerful social media platform. 

Organic Reach vs. Paid Reach

The first thing you need to understand in the world of social media marketing (which includes Instagram advertising) is the difference between organic reach and paid reach.

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Organic reach is the number of people who see your posts without you having to pay for ads.

This can be increased by using hashtags, tagging other users, and posting regularly.

On the other hand, paid reach is the number of people who see your posts because you’ve paid for ads.

These ads can be in the form of sponsored posts, stories, or even IGTV videos.

There are pros and cons to both organic and paid reach.

Organic reach is great because it’s free; however, it can be difficult to grow organically without putting in a lot of time and effort.

Paid ads are faster and easier but, as the name implies, it costs money. It’s good to note that paid ads have a sponsored tag. 

The good news is that you don’t have to choose one or the other—you can use both an organic or a promoted post!

And, when used together, they can complement each other quite nicely.

The Basics of Instagram Advertising

You do not need to have an account to advertise on Instagram, but you need to have a Facebook Business Page.

Still, we recommend that you create an Instagram profile for your business…

…so you’ll get a better understanding of how it works and create more optimized content that appeals to your target audience. 

You can manage your campaigns and monitor their performance through the Facebook Ads Manager where you can set your:

To advertise on Instagram, you need to use your Instagram business profile.

In addition, the ad appears as a regular Instagram post on your viewers’ Instagram feed in square or portrait frames.

With Instagram ads, you can:

…and more!

How Much Does Instagram Advertising Cost?

Now that you know a little bit about the basics, let’s talk about the main reason why you’re here. How much does it cost to advertise on Instagram?

The average monthly cost of a single Instagram ad is $0.75 per click. Let’s discuss this further.

Instagram Cost Per Click (CPC) is the amount of money you pay each time your advertisement is clicked. The average CPC in 2022 ranges from $0.5-$0.75.

This covers not only link clicks but also likes/reactions, comments, and shares, and may vary depending on the product or services that you offer. 

Instagram cost per mile is the price you pay for every one thousand impressions your Instagram ad receives.

In 2022, the average Instagram CPM campaign is $2.50 to $3.50 per thousand impressions.

How is the Cost Calculated?

A number of factors will affect how much you pay for ads, including your budget, your goals, who your target audience is, what type of ad you want to run, engagement, and so on.

So let’s dig deeper into how Instagram calculates the cost of your ads. 

Bid amount

Your bid amount and what you’re willing to pay determines how many followers or leads your business will get.

Instagram will increase its efforts for your advertising depending on the amount you pay.

It’s a bidding war especially if your ad is just starting anew.

Once Instagram sees higher engagement, you will be rewarded with a higher adposition and a lower bid amount over time. 

Relevance score

High relevance score is seen through the positive interactions (likes, shares, comments) your ad receives.

On the other hand, negative interactions (reports, hides, blocks) often lead to a lower ad relevance score.

Make sure to frame your ad’s messaging in a way that would be relevant to your viewers which should lead to a higher ad rank.

Estimated action rate

The estimated action rates on your ads measure the probability that a viewer will perform desired actions after seeing your ad.

The more active your audience is on an advertisement, the higher the post-engagement rate thus a lower CPC. 

Your goal should center around creating content that resonates with your audience for a higher click-through rate. 

Target audience

Being in a market with high competition means that it can be hard to get easily noticed by your target market.

If Instagram identifies that you are competing in a highly saturated market with a large audience size…

…placing an Instagram ad will be quite more expensive than the average.

Businesses with a niche audience have some sort of advantage in terms of the average Instagram advertising cost. 

Manual Bidding vs. Automatic Bidding

Instagram’s bidding model gives you the option to place your ads either manually or automatically.

Manual bidding allows you to set a target spend based on the desired outcomes.

With automatic bidding, Instagram determines the best price that gets the most link clicks. 

If you are just starting with Instagram ads, automatic bidding is the way to go to get the exposure you need to get at a reasonable price range. 

Facebook Advertising vs. Instagram Advertising

Facebook and Instagram ads are both governed by Meta, which means that they have the same audience and advertising policies.

Here are some key differences: 

How to Reduce Instagram Advertising Costs

1. Choose the Right Objective for Your Ads

When setting up an Instagram ad, it’s important to choose the right objective for your campaign.

This is because each type of ad has different cost structures and targeting parameters…

…so you want to make sure that the objective you select aligns with the goals of your campaign.

For example, if you’re trying to increase brand awareness, then selecting “Reach” as your objective will be more cost-effective than selecting “Engagement” or “Conversions.”

2. Utilize Targeting Parameters 

Another way to reduce Instagram ad costs is by utilizing targeting parameters such as location and age range.

By narrowing down who sees your ads based on these criteria…

…you can reduce the number of impressions needed to reach your desired audience, and thus, lower the overall cost of your ads. 

3. Capitalize on Low-Cost Days/Times

Ad prices tend to fluctuate depending on the day and time they are being run.

For instance, many businesses have seen significant savings when they run their ads during non-peak hours (such as late at night) or non-peak days (like Sundays).

Additionally, it may also be beneficial for businesses to run their ads during local holidays or special events…

…in order to capitalize on temporary decreases in pricing due to decreased competition from other advertisers in their area. 

4. Leverage A/B Testing 

Finally, leveraging A/B testing is another great way to reduce Instagram ad costs while increasing effectiveness.

This entails creating two versions of an ad—A and B—and then running them simultaneously…

…in order to compare which one performs better over time based on key metrics like click-through rate (CTR), conversion rate (CVR), etc.

Doing this allows businesses to identify which elements work best for their target audience…

…and make adjustments accordingly in order to optimize their campaigns for maximum efficiency while reducing costs at the same time.

Why Advertising on Instagram is a Cost-Effective Option

Instagram ads are definitely worth the investment—and here’s why. 

1. You can reach a wider target audience.

Advertising on Instagram ensures that your content will be seen by the people you want to see it—and that’s priceless. 

2. You can increase brand awareness and recognition. 

In today’s day and age, people are bombarded with ads from all different brands left, right, and center. Standing out from the crowd can be difficult, but it’s not impossible.

With well-crafted Instagram ads, you can increase brand awareness and recognition for your small business.

This is achieved by creating ads that are visually appealing and by using relevant hashtags. 

3. You can boost sales and realize maximum ROI.

At the end of the day, most businesses want advertising to result in an increase in sales and ROI…

…and there’s no reason why advertising on Instagram can’t do that for your small business, too. 

By using effective calls-to-action and targeting your audience correctly, you can use Instagram ads as a cost-effective way to boost sales for your business.

And when your social media sales go up, so does your ROI! 

You’re Paying for Instagram Ads—Now What?

So now that you know how much is Instagram advertising cost, you’ve decided to take the plunge and start spending money on ads for your small business on Instagram.

Congratulations! You’re taking a big step in growing your business.

But now that you’ve made this decision, you might be wondering what comes next. Here are some tips to get you started:

Remember, people are scrolling through their feeds quickly, so you only have a split second to grab their attention.

Check out this post next to learn how to design Instagram ads.

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A good rule of thumb is to keep the text component short and sweet—people are more likely to read something if it’s brief. 

instagram advertising cost

Instagram allows you to target people based on interests, demographics, and even specific behaviors.

Keep in mind that it’s important not to get too specific with your targeting—you don’t want your ad to only be seen by a handful of people.

Instead, think about who would be most interested in your product or service and use those criteria to target your ad. 

Advertising on Instagram can be a great way to reach new customers and grow your small business—but only if it’s done right.

Creating high-quality content with relevant ad copy, targeting your audience carefully…

…and allocating the right advertising budget are essential components of a cohesive campaign.

Keep these tips in mind as you create your first few ads; with a little practice, you’ll be an expert in no time and reach your full potential!

Need help with Instagram ads?

We are the go-to Instagram advertising agency for progressive small businesses looking to take their ad campaigns to the next level! 

Other Instagram Advertising Resources

This content was originally published here.

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