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How Much Do Instagram Ads Cost: Complete Overview 2021

Business

Instagram Ads work the same way as Facebook Ads, however, their advertising cost is different. When compared to Facebook, which is older and has more placements and data, Instagram Ads Cost more but that’s only in some cases.

With over 1 billion active monthly users, Instagram ads offer you a great opportunity to get more leads and grow your business. They help you connect with an audience that’s interested in your products or services.

Now, the main question is how much do Instagram Ads Cost? To better answer this question, we’ll need to understand how Instagram ads work and what are the factors that influence the advertising costs on Instagram.

How do Instagram Ads Work

Instagram Ads is paid content that appear in people's newsfeeds and stories. For Instagram, their ads and content target people who are more interested in your products or services.

The content is personalized further and shown to different individuals based on their demographic data such as location, behaviors and interests.

The technology behind is showing that these ads are created in such a way, that they provide great revenue.

To know whether or not contain is a paid advert, one can look for two things. These are: there is a call-to-action (CTA) sign at the bottom of images.

These CTA could range anything from 'learn more' to 'shop now. CTA depends on the goals of the campaign.

Secondly, there is the word 'sponsored' under the company's name. The good thing with Instagram advertising is that you do not need an Instagram account to advertise on this platform.

All you need to do is have a Business Page in its parent company (Facebook). However, it would not hurt to have an Instagram account.

That’s because it would help you familiarize yourself with the content that is hyper-relevant and resonates well with your target audience.

Also, this will come in handy when you are strategizing on your organic marketing efforts. Once you have an up and running Facebook Business Page, use Facebook’s Ads Manager to set up your Instagram Ads.

From the Ads Manager, you can set up your campaigns, ads, choose your budget, target audience, ads placements, and Optimization.

Once set up, your ads will run like Facebook Ads which is: within the set time frame, budget, selected audience, and optimization options.

Factors that Determine the Cost of Instagram Ads

The cost of Instagram Ads is determined by four main factors, these are;

#1.Bid Amount

The cost you will spend on your Instagram Campaign will be determined by the amount of your bid.  You need to know how much you are willing to spend to obtain leads.

Unlike Facebook, Instagram bid amounts are higher which means you will pay more to get impressions and clicks.

Let's say your targeted budget is $250 and your bid amount is $2 CPC, this means you will get a total of 125 clicks on your ad, on the other hand, if you had a budget of $800 with a $2 CPC, you would get 400 clicks.

In the same case with a budget of $200 and a $0.50 CPC, you would get 500 clicks and even higher for an $800 budget.

This shows that budget and bid amount work hand in hand, your budget influences your bid amount and your bid amount in return influences your budget and the two will influence how much you will pay to advertise.

#2.Ad Relevancy Score

Ad relevancy is how relevant your ad is for your audience. Your ad relevancy score will impact the cost of your ads.

The relevancy score is used because Instagram wants to ensure that it shows hyper-relevant content to its audience. Your ad relevance score will be awarded according to how people react to your ad.

This means, if there is a positive response to your ad, such as clicks, likes, and comments, your relevance score will be high.

If the reverse happens and the audience hide the ad or any related action, you get a negative response which will lower your relevancy score affecting your ad’s performance.

There are many benefits of having a high relevancy score, one of these include: your ads will be placed over low relevant ads. In return, you will get more clicks and leads on your campaign.

#3.Estimated action rates

Instagram rates the likelihood of people's action on your ad, and this rate affects the cost and prices of your advertising. The role of this rating is to determine the chances of your audience engaging with your ads.

The rating is determined by actions such as conversions and clicks. This allows Instagram to promote ads and content that your audience interacts and engages with.

This rate influences your ad cost. With a high estimated action rate, your ads will get a higher preference and ranking by Instagram. As such, your bid amount will be lower with more leads and conversions.

#4.Competition

As with any other form of advertising, the competition will impact your Instagram ad cost. Depending on which service or product you’re advertising, there are competitors in the same field who are targeting the same audience as you.

Also, if there’s stiff competition such that various companies are bidding for the same audience; there will be a bidding war.

In return, these companies will want to outdo each other to get a higher placement. As expected, the CPC will be high. The reverse may happen if there is low competition.

Additional Factors That Influence Instagram Ad Costs

Other factors that may influence your Instagram ads cost are:

#5.Timeframe

The cost of advertising may vary depending on the time of day, day of the week, and season. Therefore, Instagram will consider all these because time and days influence the performance of your ads.

There are different seasons which influence people's spending habits which leads to the rise and fall of popularity for different brands.

Take for instance recreational areas that are targeting young people during the summer. In summer, these recreational areas will have a higher ad cost and low cost during cold seasons.

When winter or autumn seasons arrive, these areas will be less popular leading to low clicks, leads, and conversions.

#6.Gender

Surprisingly, gender also affects the cost of the ads. Statistics show that there are 58.8% of Instagram users identifying themselves as female and 49.2% identify themselves as male. The difference is a small gap which may seem to be less effective but this can change rapidly.

 

For campaigns targeting the female population, their ad cost may differ from those targeting males; a difference that can round up to dollars within minutes.

What makes Instagram Ads Worth the Cost

Instagram advertising costs may be high but you’ll reap more benefits. These benefits prove it’s better to pay to get impressions rather than run promotions and campaigns from a business financial account.

Advanced Targeting

With social media, you get a wide range of audience which is quite high considering that each month, there are over 1 billion users on Instagram alone.

Advertising on this platform is more beneficial since it uses the demographics and geographical data of its Facebook counterpart.

This means you can utilize Facebook’s native audiences to reach them based on their behaviors, actions, interests, and other demos.

Alternatively, you can utilize sources such as email lists and Pixel to reach the right audiences in your prospective campaigns.

Higher Engagement Rates

Through paid ads and organically, Instagram has a higher engagement rate. For example, an image on the IG platform gets 23% more engagement than it would on Facebook.

However, as much as this sounds appetizing, it’s best to pay to and expand your reach and visibility by their target audience through paid ads.

When it comes to the kind of content that gets more engagement, any visual content would perform well but most brands prefer to use Video Ads that earn them a 38% increased engagement.

That means videos and images perform better and generate more engagement than text-related content on social media platforms.

High Conversion Rates

Instagram has proven to deliver higher conversion rates of 1.08% as compared to other platforms such as Twitter which has a rate of 0.77%.

If you enjoy greater conversion rates with Instagram, it’s worth noting that greater returns require greater inputs.

To get more conversions, you’ll have to spend more on your ads campaign by optimizing and developing a continuous strategic plan to get your ideal and desired results.

External Links

With Instagram advertising, you are not allowed to include clickable links in your ads or organic posts. However, you can include it in your captions.

The recipient will have to copy-paste the link to a browser to view the intended site or rather they can visit a link directly from your Insta Bio.

This may seem like a negative thing but it is the contrary. That’s because you can add outside links in your ad caption.

You can track the traffic from your Instagram Ads through your domain by implementing your Pixel. For likes outside your domain, you may not be able to view the traffic.

 Higher Click-through Rates (CTRs)

When you compare the CTRs of different networks, you realize that Instagram's CTRs are higher. This CTR may even be 2.5 times higher than on other social networks.

However, this is determined by different factors such as the target audience.

How to Lower the Cost of Instagram Ads

The cost of advertising on Instagram may be high or low depending on your budget and your ad rating which affects its overall cost.

Regardless of the case, you may want to lower your Instagram Ads Cost. The good news is that you can do this by practicing a few things and still get maximum results.

  • Use Automatic Bidding

Let's think that you are just starting your journey in Instagram advertising, it would be better to use automatic bidding for your ads campaign. This is because you’re more likely to get bids that are ideal for your campaign.

Automatic bidding helps you avoid risks such as overbidding since the lack of previous data makes it harder to set the right bid amount.

  • Use Precise Targeting

The purpose of ad campaigns is to reach an audience that is interested in your products or services. To get better results, consider personalizing your targeting. You can do this by using:

  • Demographics; demographic information such as age, gender and race are the most common means to target your leads;
  • Location; you can also target your audience based on where they live; this can be a specific region or state;
  • Actions; how people interact with certain sites can also help you determine the ideal audience;
  • Interests; through social media, you can identify people's interests such as which pages they follow, etc. You can use such info to target audience whose interests resonate with your products or services.

With precise targeting, your ads campaign will get a higher relevance score and rank higher at a lower CPC.

Test Your Ad

Last but not least, to reduce the price of the cost of your ad, you need to test your ads. When you create an ad copy, test it first to know how it will perform. This way, you can be sure your ad's version is the best and can give you maximum results.

The more you test, the more relevant your ad copy will be. This in return gives you a high relevance score and ranks higher at a lower CPC.

How Instagram Ads Can Help You Grow Your Business

Instagram advertising is one of the most efficient and effective means to reach a greater audience that is interested in your products or services.

Personalizing them based on demographics, location, and other fundamentals, you can ensure your ad copy is hyper-relevant.

Your Instagram Ads Cost will depend on several factors such as bid amount and timeframes. Despite the cost, these ads are worth the bill as they give you more returns with a higher conversion rate.

Last but not least, you can lower this cost by taking up simple practices such as testing your ads.

 

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