How Much Will Instagram Ads Really Cost You?
Did you know 1 billion people use Instagram monthly?
But were you aware that 81% of people use Instagram to research products and services?
That means 810,000,000 are using Instagram every month to research products and services.
Instagram has continually grown since its creation in 2010 and doesn't show signs of stopping.
Advertising options on the photo and video sharing platform are becoming more varied and flexible. It isn't overly saturated either, which means more advertising placement is set to come.
So How Much Do Instagram Ads cost?
According to WebFX, the average cost per 1000 impressions is $6.70.
That's cheaper than Facebook, which has a $7.19 cost per thousand impressions.
What determines Instagram advertising costs?
Four main factors influence Instagram advertising cost:
- Bid amount
- Ad relevance
- Estimated action rates
How does competition affect my Instagram Ad price?
Like other advertising platforms, Google and Facebook competition is a massive factor when reaching your target audience. There will always be competitors who are vying to connect with the same demographic. The competition and amount of competition can cause the price of your Instagram ads to fluctuate.
What is bid amount?
A bid amount means how much you are willing to pay for leads. For example, if you have a total budget of $1000 and a bid amount of $2 per click, you will only be able to get 500 clicks. Testing your bid amount is highly advised, so you can get the best possible results.
What is ad relevance?
Like Google Ads Quality score, Instagram has an ad relevance score aiming to show users only relevant content to their feeds.
If users respond positively to your ads by engaging with them, your relative score will increase. Engagement includes actions like clicking, commenting, sharing, and liking.
Conversely, if your advert receives a negative response, like a user hiding your advertisement, your ad relevance score will decrease.
Ads with a higher relevancy score have a higher priority than ads with a lower relevancy score, and those advertisers won't have to pay as much.
What is the estimated action rate?
The estimated action rate is how Instagram believes people will perform an action or interact with your ad. These actions include clicking, liking, and converting.
This affects the price of your Instagram advertisement because the more likely Instagram believes people will interact with your ad, the more likely your ad will place higher among your target audience. This means you get a bid lower and rank higher, which means you get a better Return on Investment on your bids.
What are other additional factors that might affect my Instagram ad cost?
When placing advertising bids, there are other unique or seasonal factors you may have to consider:
- Holidays and events: Holidays and special events are high-priority, high-competition occasions throughout the year. More businesses are wanting to compete to reach easily convertible leads. This leads to a higher competition which leads to a higher cost-per-click price. Being aware of these times and planning your budget accordingly will allow you to pick and choose when the right moments to compete are for your business.
- Day of the week and time: According to Instagram usage statistics, usage is highest on Tuesday, Wednesday, Thursday, and Friday. Not only that, but 10 am to 2 pm seems like the best time to post, except for Tuesday and Thursday, where the evening is the best time to post. Of course, other businesses know this too, which means competitiveness in these specific days and time slots will increase.
- Gender: When you're considering potential advertising costs, you probably wouldn't consider gender, but did you know it costs slightly more to advertise specifically to women than men? That's because women are more likely to engage and interact on Instagram, so naturally, more engagement means more cost.
- Your industry: The market or industry space you're advertising indefinitely plays a role in advertising cost, but this is a double-edged sword. While you'd probably assume it's expensive for apparel companies to advertise on Instagram because of the industry's competitiveness, would you have guessed it's costly for B2B companies to advertise due to the lack of businesses on Instagram?
How Do I Lower the Cost of Instagram Ads?
While many factors determine the amount you'll spend on Instagram ads, there are some best practices you can follow to optimize your Instagram ads and ensure the lowest price.
In order to get the best result for your advertising campaign, you want to be able to reach your ideal target audience. As previously mentioned, when you find your perfect audience, receive engagement and covert action, Instagram will reward you immensely with a higher relevancy score and a lower bid amount. The best way to find your ideal audience is to understand your product or service and get precise with your targeting.
You can target customers based on their location, demographic, interests, and behaviors.
You also can create custom audiences unique to your brand. With this feature, you can import important information like emails targeting people you know are already interested in your brand.
Similar to custom audiences, lookalike audiences give you the ability to find people who are likely to be interested in your services or product; however, rather than targeting customers who you know are interested in your services, the lookalike services feature targets users who are similar to your target audience, but haven't found your brand yet. This is extremely helpful to amplifying your business and increasing its number of potential customers.
Setup automatic bidding
Automatic bidding, especially for people who are new to Instagram advertising, is an easy way to optimize the bidding process. Automated bidding prevents brands from overbidding due to either a lack of awareness or previous data. Many companies overlook this feature overbid, thinking they have to bid more than they need to, and automatic bidding can help curve that.
Get more connected with landing pages.
Many companies make the mistake of directing leads to their main website's homepage.
This doesn't take the person who clicked through on the ad through an easy-flowing journey and might cause them to exit the funnel process. Instead, consider creating a landing page that is specific to the advertisement the user clicked on. This means they'll be "landing" on a page that is tailored to what they clicked on in the first place.
Relevant landing pages are guaranteed to bring more conversions. If you want to create a more effective (and ultimately lower costing) Instagram ad campaign, it's highly advisable to build specific landing pages that inspire conversions.
Setting goals are crucial to any marketing plan; in regards to Instagram ads, there are three elements you want to focus on when setting goals:
- Awareness. With a successful Instagram campaign, you want to attract your brand, product, service, app, etc. You want people to find these things and promote or help facilitate familiarity with them. With an awareness campaign, you might want to focus on extensive campaigns like Click per Mille (CPM).
- Attentiveness. If your goal is to get your audience's attention, you want to try and craft advertisements focusing on educating. Compelling information shown on graphs and infographics may be the route you want to take. When creating a campaign with this goal in mind, you want to focus on key performance indicators such as website clicks, capturing leadings, and views.
- Conversion. Conversion is the ultimate goal for most advertising campaigns. Companies want results, and what better outcome is there to an ad than getting their audience to buy their product or service? When focusing on conversions, you want to create copy that identifies your customers' pain points and then tell them how your product or service will resolve them. When making copy, I like to think deeper than obvious issues a product or service might solve. I want to evoke emotion or an emotional response in my copy that shows potential customers you know exactly what they're going through.
By setting goals and understanding what outcome you want to achieve from a campaign, you can create advertisements and processes with better cohesiveness, ultimately leading to more engagement and more sales.
Test, test, test!
Testing your Instagram ads will single-handedly save you the most advertising spend. When you initially create an advertisement, it is never going to be at its best. The process of constantly refining your ads will ensure you put the most relevant, best version of your ad out there. As we learned before, the higher the relevancy, the lower CPC, and a higher ad position. It's the most efficient way to lower the cost of your Instagram ads.
Are Instagram Ads Worth the Cost?
Yes, Instagram Ads are definitely worth the cost!
Instagram ads have several advantages over other types of advertising:
Instagram ads offer advanced targeting options. As previously mentioned, Instagram allows you to target the exact audience you want for your business. These options range from demographics to interest. This type of specialized advertising is an absolute game-changer and allows you as an advertiser to create highly effective ads.
Instagram ads generate sales with higher-order values. According to a 2021 study done by Visual.ly, over 1% of Instagram visitors purchase an item after visiting a site. That doesn't sound like a lot, but when you factor in that Instagram sits second behind Polyvore as having the highest average order value at $65.00. This varies by platform and industry, but it is more likely that people who convert on Instagram will pay more than every other mainstream social media platform (Facebook, YouTube, Instagram, Twitter, Pinterest, and LinkedIn)
Instagram earns the highest engagement. According to WebStrategies, Instagram boasts the highest rate of engagement and interaction among all social media platforms. And, it's not even close.
Instagram garners 2-7% of engagement (depending on the number of followers)
While Facebook commands 0.12%-1.54% and Twitter only 0.02%-0.18%.
Instagram ads deliver high conversion rates. As previously stated, conversion rates on Instagram are 1.08%, which's better than Google +, Twitter, Polyvore, Pinterest, LinkedIn, and Reddit.
So is the cost of Instagram ads worth it? Definitely!
Especially if you keep in mind the cost-effective ways, you can keep the price down.
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