Online businesses are in constant competition with one another, especially when it comes to advertisements. it can be difficult to connect with your target audience and increase conversion rates for your brand or company without an effective online marketing campaign.
One of the best ways to reach out to target consumers and make them customers is to use Instagram ads, both for their accessibility and their wide potential reach.
However, Instagram ads are not always cheap. Even worse, it can be difficult to nail down how much a hypothetical future Instagram ad campaign will cost. For business owners that have a limited marketing budget, getting a solid price range down is crucial so they know what they can make and how often they can post new ads.
Let’s examine the costs for Instagram ads in detail, as well as go into the many factors that can affect the cost of individual ads or entire marketing campaigns.
Cost Range for Instagram Ads
Nailing down a single price for an Instagram ad is tricky because there are so many factors involved with making an ad and posting it on the platform. Furthermore, you have to keep in mind that different ads are targeted to different groups of people.
With that said, according to WebFX, the average Instagram ad costs between $.20 and $2 for cost per click or CPC. Note that this only measures the cost it takes to get a single person to click on your ad.
Additionally, the average cost per impression (measured in CPM or cost per 1000 impressions), you’ll expect to pay around $6.70 on average. This can easily skyrocket depending on your industry, as more popular or ad-inundated industries may charge higher prices.
Ultimately, Instagram is one of the most expensive advertising platforms to use. It’s still considered worthwhile, as you can reach a wider target consumer audience through both Instagram and its parent company, Facebook.
Factors That Affect Ad Prices
While the above range is useful for calculating a basic budget you can plan to spend on your ad campaign, you should keep the below factors in mind. Each of these can affect advertisement prices and allow you to adjust your marketing budget accordingly.
Type of Ads
The type of ad can play a big role in its overall price, as well as make a given advertisement more or less appropriate for your business. Instagram ads come in types like story ads, video ads, photo ads, collection ads, and more.
Remember, there aren’t any “off-the-shelf” pricing models you can use for ads. Instead, the type and overall quality of your ad will combine to make a general average price for each individual advertisement in your campaign.
Photo ads are typically cheaper, for example, while video advertisements are usually a little pricier since they take longer to produce at a suitable quality.
The bidding strategy you use can also affect your ads’ overall prices. Instagram allows you to use four different bidding strategies: cost per click or CPC, cost per 1000 impressions or CPM, cost per like or CPL, and cost per action or CPA.
Each of these bidding strategies will suit different marketing campaigns and industries. If you want, for example, to increase the public awareness of your brand, CPL ads might be the best bidding strategy to use.
On the flip side, if you want to target people closer to converting to full customers, you’ll want to focus on CPA or CPC advertisements, as the people you are communicating with are lower in your sales funnel.
Targeting and Metrics
The metrics you choose to focus on can also impact advertisement costs. It all depends on how you measure success. Furthermore, who you plan to target and the current competition you have to market against can impact ad campaign costs as well.
For example, widening your target audience can sometimes decrease the cost of Instagram ads, as you’ll use wider parameters. As you narrow your targets, the costs for ads go up since you need to create more specific content and Instagram has to work harder to bring your ad to your target consumers.
Targeting factors that can affect advertising costs include:
- Custom audience metrics
- Automated targeting tools
- And more
Bottom line: more general ads are cheaper, and more specialized ads are usually more expensive.
The quality of your Instagram ads will necessarily affect their cost. This is common sense; better ads take more time and skill to create. However, spending a little more time on your ads before posting them, and making sure they will regularly direct people to the landing page or another location you want them to reach, can be beneficial in the long run. Instagram will score your ad better if it is higher in quality.
Placement and Relevance
Placement can affect the general cost of your Instagram ads. For example, you can have your ads either posted on Instagram alone or on Instagram and Facebook simultaneously. Naturally, the latter costs a little more but can be better for reaching more people.
You’ll also want to consider ad relevance. Again, the more relevant your ad is to your industry and the better it is at directing people to your website or business, the higher Instagram will weight it using its internal metrics. As they’re weighted higher by Instagram, your ads will be more cost-effective in the long run.
As touched on earlier, the larger the audience you want to reach with your Instagram ads, the cheaper they will likely be. Smaller audiences result in more competition (in most cases, with exceptions for niche industries), so the cost per ad will likely go up.
When you post your ad can have an impact on costs as well. For example, if you plan to post a bunch of Instagram ads during busy times of the year for sales, like the holiday season, you’ll have lots more competition, and ad prices will go up. The reverse is also true – post during the off-season and your ad costs will likely be lower than average.
Click-Through Rate (CTR)
The click-through rate may affect your overall Instagram ad pricing rates, as healthy CTR levels indicate that your ads are successfully resonating with your target audience. If your ads don’t resonate, they may cost more in the long run as they are not getting clicks and generating revenue for your business.
Your company’s industry can play a role in ad costs. As with factors like timing, the more competition there is, the pricier your ads will have to be to both be posted on Instagram in the first place and to receive enough attention for them to be profitable.
Typically, industries like clothing and apparel pay higher costs for Instagram ads (in part because the platform is a haven for clothing advertisements already). However, B2B companies also typically pay higher Instagram ad costs because fewer B2B companies use platforms like Instagram for advertising. So even though there isn’t a lot of repetition in a raw numbers sense, there is a lot of competition due to the narrow size of the niche.
Last but not least, the budget you have for your marketing campaign can affect the ads’ costs themselves. If you have a smaller marketing budget and produce fewer ads, Instagram’s system will take longer to learn and maximize the efficacy of your campaign. Your Instagram ads might cost more on a per-click or per-impression basis compared to a bigger ad campaign that may be costly upfront but be cheaper in the long run.
Are Instagram Ads Worthwhile?
Absolutely, even if they end up being more expensive than paying for cheap PPC ads you can post on Google or other platforms. There’s no denying that both Instagram and Facebook are incredibly popular, with billions of users worldwide being shared between both platforms.
Furthermore, Instagram and Facebook both include a number of ad campaign controls that allow you to target certain consumers, reach your target audience more directly, and maintain relevance over the long term.
In short, Instagram is one of the best social media platforms on which to post ads, especially if you have help from a top-tier video marketing campaign.
In fact, that’s exactly what VisCap Media is designed to do: help you produce high-quality video content for your next Instagam (or any other) ad campaign. We can work with you to create ads that speak directly to your target consumers and accurately represent your brand. With our help, you’ll dominate your niche and reach marketing success.
Contact us today and see what we can do for you!