Instagram ad cost has increased over the last few years due to its wide reach of 959.7 billion. As per statistics found by WebMaxy, Instagram presently has over 2.35 billion monthly active users. Therefore, Instagram presents a great opportunity for advertisers to tap into new audiences. If you are just starting with Instagram ads and wondering how much does it cost to advertise on Instagram then you are at the right place. 

In this blog, we will discuss the Instagram advertising cost and how it is determined. We have also given the average Instagram CPM and CPC Instagram for your reference. 

How much do Instagram ads cost?  

Instagram ad pricing depends on some variables and the pricing model you choose. We have given below the information on the two major Instagram ad pricing models.

The average CPC for Instagram depends on several other factors that we will discuss later in this blog. The CPC for Instagram also depends on the placement of the ad. The average CPCs for stories placement is about $0.08 to $0.50. If you want to place your Instagram ads in feed posts then it will cost you a little bit more, around 60 cents. 

Instagram CPM for placing your ads on Instagram stories will cost you around $1-$1.15. It’s even more for placing your ads in Instagram feed posts, somewhere around $1.70. As you can see from the averages, Instagram CPM is more expensive than CPC. 

If you are just starting and don’t have a big budget for Instagram ads cost then the CPC model is best for you.  

Note: The Instagram advertising costs that we have given above are just the averages. There are a lot of factors that affect the cost of Instagram ads. The actual Instagram ad price can be higher or lower than the averages. 

How much are Instagram ads? 

Instagram ads price depend on an auction system in which the Instagram ad cost is determined by the demand and supply. In Instagram ads, you get access to many tools and settings. You can control Instagram ad costs in two ways: how much you want to spend per result i.e. per result pricing model or how much you want to spend on a campaign i.e. weekly or monthly budget. 

You can set the amount that you want to spend on an Instagram ad campaign. For example, $10 per week or $1000 per week. However, if you opt for pay per result then you can’t directly control the cost of each result. You have to set the maximum bid and the ads manager will accordingly adjust the cost to give you the desired results. 

How much does Instagram ads cost? The three main factors that determine Instagram ad cost are the auction (supply & demand), the value users get from your ad, and estimated action rates. 

Ads manager’s main goal is to provide the best experience and increase the time users spend on their platforms. Instagram wants to show the right ads to the users so that it leads to an enhanced experience. 

If Instagram shows irrelevant ads, it might frustrate users and make them leave the platform. Therefore, it’s important that you create compelling ads and target the right audience. 

For instance, if you create an ad that doesn’t perform well and people mostly shut it. In that case, you would have to pay more to showcase your ads to the audience. This means your Instagram advertising costs would increase significantly. 

On the other hand, if your ad gets a positive response and helps in providing a better experience to Instagram users. Then, your Instagram advertising costs wouldn’t be too much. 

Ads manager uses a number of different methods to measure the value of your ads. One of them is the positive and negative reactions to your ad. Also, the number of users that hide or report your ad is an indication of the relevancy and experience of your ad. 

Another major factor is the estimated action rate. It is the measurement of the expected value that your ad is providing to users. It is evaluated based on how well your ad is achieving the objectives that you set. 

Instagram ad cost calculator 

Instagram ad cost can be calculated using this simple formula. 

The ad auction process happens in a fraction of a second. You just need to create the best ads, target the right audiences, and set the budget for your Instagram ad. By making the best ads that are relevant to your target audience, you can reduce your Instagram ad costs. 

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Other factors that affect Instagram ad costs 

Instagram ad costs are determined by many different factors. Based on these factors, the ads manager decides how much would it charge for running your ad. Have a look and see how you can work on improving these to reduce your Instagram ad cost per month. 

Targeting 

Instagram ad costs are often higher for certain demographics and industries than the others. This usually indicates there are many advertisers who are competing for that spot. 

For example, ads for women’s fashion will naturally cost you more due to the competition in the industry. However, ads for niche industries won’t cost you much. 

The demographics you target also affect your Instagram advertising costs. For example, targeting millennials and Generation Z would cost you more due to the popularity of the platform among these generations. 

Also, showing your ads to a B2B audience is more costly than B2C. The answer is simple because there are very less businesses on Instagram than people and the value advertisers get from them is even higher.

Ad placement 

Instagram ads are shown in many different places. When you are setting up Instagram ads, you’re asked where you want to place your ad. The ad placement is one of the factors that determine the cost of Instagram ads. 

The most engaging placements cost advertisers more to put their ads there. For example, Instagram story ads are cheaper than Feed ads as they are on user screens just for a few seconds. This is also a reason why most advertisers prefer Feed ads over Story ads. 

Relevancy 

Relevancy plays a crucial role in determining Instagram advertising costs. Instagram wants to make sure that your ads are relevant to the target audience. 

Instagram aims to provide the best experience to users even when it comes to ads. Thus, ad relevancy is an important factor. 

Ad relevancy is measured by the positive reactions to your ads like comments, likes, and shares. Negative reactions like hiding or reporting your ad lead to a lower relevancy score. 

Instagram ads with a relevancy score of 6+ would be shown more over the ones with lower scores. This way you can reduce your Instagram advertising costs and get more clicks and conversions. 

Time of the year

Instagram ad costs vary during different times of the year. For example, if you want to display your ads during the holiday season then it would cost you more than usual. Many advertisers want to put their ads to target similar groups which increases CPC Instagram ads. 

As per statistics, Ad spending in the U.S. peaked at $1.8 billion in Q4 2021 during the holiday season which is 22% higher compared to Q4 2020. From this, you can understand that Instagram advertising costs increase during the holiday season every year. 

Similarly, Instagram ad cost is higher on the weekend compared to the weekdays. It is due to the fact that people are more active on Instagram during the weekend than the weekdays. 

When considering your Instagram advertising cost it’s important to keep in mind the time factor. You can do trial and error in the beginning to find out the right time to run your ads at a lower cost.

How to reduce your Instagram ads cost? 

We are sure that by now you have a fair idea of how much does it cost to advertise on Instagram. However, if it seems expensive to you then we have got some of the best ways through which you can reduce your Instagram ad cost. 

1. Set the right goals 

Whenever you are running Instagram ads, it’s important to set the right goals in your ad campaign. Setting goals helps your ads accomplish the objectives that you aim to achieve through them. 

Setting goals helps you create targeted Instagram advertising campaigns. This also helps Instagram’s algorithm to look at the campaign objective and showcase the ads to the right people who are more likely to take the desired action. 

2. Precision targeting 

Showing Instagram ads to a wide audience won’t give you results as they might not be interested in your offerings. Additionally, people would report your ad which would reduce your ad relevancy. 

To get the best results out of your Instagram ads, you should precisely target your audience. There are various attributes that you can set to reach out to the right audience through Instagram ads. 

By setting attributes you can increase the chances of showing your ads to the right people who’ll convert. It will also increase your ad relevancy thus leading to a higher ad rank at lower CPC. 

3. Automatic bidding 

How much does it cost to advertise on Instagram? Are you just starting with Instagram advertising? Using automatic bidding will help you reduce your Instagram ad cost. It is the best way to help you set the right bids for your ad campaign. 

It works well even if you don’t have any previous ad data for a good CPC to set for your marketing campaigns. Automatic bidding helps you set the bid amount that’s appropriate for your business. 

With the automatic bidding option, the algorithm optimizes ads using the data that’s available and runs them in an efficient way. This also helps you to avoid overbidding on the ads. 

You can keep Instagram advertising on automatic bidding till the time you don’t generate enough data. After you gather data and knowledge for conducting Instagram ad campaigns, you can switch to manual bidding.

4. Relevant landing pages 

Another best way to reduce your Instagram ad costs is by creating relevant landing pages. Many marketers make the mistake of directing users from Instagram ads to their website’s homepage. However, it doesn’t lead users to take any action as the landing page isn’t relevant to the ad. 

As per the ad manager’s guidelines, the ad and link should be relevant and provide a connected experience to users. For this, you can create a new landing page that’s tailored to your ad content. 

Relevant landing pages help increase ad ranking which results in more conversions. If you want to create effective ad campaigns and reduce Instagram ad costs then you should make dedicated landing pages. 

5. A/B test your ads 

You can reduce your Instagram ad costs by only running the best-performing ads. To know which ad copy performs better you can use A/B testing. Put out the different versions of your ad copy for a limited time and see which one gets the maximum response. 

By testing your ads, you can know which ad copy is compelling for your users. This information will help you create more relevant ad copy that ranks higher and brings new customers. 

How much does it cost to advertise on Instagram?: The Conclusion 

Instagram advertising costs depend on several factors including target audience, ad placement, relevancy, time of running the ad, etc. On average, Instagram cost per click ranges between $0.2o to $1.00. However, you can reduce your Instagram advertising costs by choosing the right target audience, ad type, and bidding strategy. 

ProMarketer.AI is the best PPC automation tool that helps you optimize ads in real-time and reduce ad spending. You can find out which are your best-performing ads and the duration during which they get the maximum online customer engagement. Run your ads only when they get the highest conversions and drive the best results from your ad campaign. 

Schedule a demo with our experts to learn more about ProMarketer.AI. You can connect with us at info@webmaxy.co.