How Much Does it Cost to Advertise on Instagram

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How Much Does it Cost to Advertise on Instagram?

Mar 30, 2021
14 min read

Instagram is a perfect platform for connecting businesses with leads interested in their services or products, thanks to its over 1 billion active users per month. With Instagram ads, you can easily reach more leads and grow your business.

If you are interested in learning more about advertising on Instagram and how much it will cost, then you are in the right place.

How do Instagram ads work?

An Instagram ad refers to paid content that appears in stories and news feeds. The ads target individuals who are most likely to be interested in your businesses, services or products.

Most people see Instagram ads based on their interests and demographic data. The ads blend seamlessly to the point where users hardly see them as ads.

Currently, there are two main indications of content being paid as an advert. The first sign will be the ‘sponsored’ word that will always be written below the company’s name.

The call to action (CTA) appearing at the bottom of the picture will be the second sign. The CTA has phrases like ‘learn more’ or ‘shop now’ depending on the campaign’s objective.

Are Instagram ads worth it in 2021?

Most people do not understand why Instagram ads are worth it in 2021. Sadly, some people think the ads are a waste of money and time. However, this is not true. With the recent COVID-19 pandemic, most businesses have resorted to online marketing. One sure way the businesses can reach out to a large group of people is by using Instagram ads.

Several businesses have been in the position of generating thousands of dollars in sales just from Instagram ads.

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How much do Instagram ads cost?

Most of the Instagram ads will cost $0.20 to $ 6.70, depending on the bidding model. For instance, in the CPC or cost per click, advertisers will always pay $0.2 to $2 per click. With cost per impressions (CPM), the advertisers always part with $6.7 for every 1000 impressions.

Factors affecting Instagram ads costs

Four main factors will play an integral part in determining Instagram advertising cost:

1. Bid Amount
The bid amount will always influence the amount you spend on a particular Instagram advertising campaign. However, you will have to first determine the amount you are willing to pay to get leads. The bid amount will impact the amount you spend.

With Instagram having higher bid amounts, you will have to pay more for clicks and impressions. For example, when you intend to spend $500 and have $2 per click as the bid amount, it means you can only get 250 clicks on the ad.

The bid amount will always influence the budget, while the budget will influence the amount you can bid. The amounts will determine how much you will spend on advertising on Instagram.

2. Ad relevance score
The ad relevance score will always have an impact on the cost of the Instagram ads. The relevancy score refers to how relevant Instagram considers the ad to be about those who come across your ad.

Instagram aspires to show the right content to their audience in the feed section. The score will be based on how people will react when they see your ad. When the response is positive, the relevancy score will increase.

The positive response comprises actions such as liking, clicking, commenting, etc. Negative responses comprise actions like hiding the ad. They will lead to a lower ad relevance score, which will reduce the ad’s performance. Ads having high relevance scores are always placed over ads with low relevance scores.

3. Estimated action rates
Estimated action rates will always have an impact on the cost of advertising Instagram ads. The rate is based on the chances of people acting on the ad. Instagram will want to know how the audience will engage with the ad.

The engagements comprise actions like clicking and converting. Instagram aspires to promote ads they think will have people interact and engage with the content. The estimated action rate will help in determining the cost of an Instagram ad.

Instagram always anticipates more people will interact with your ad and always never take long to publish your ad. It means you will always get a low bid amount that will make it possible for you to earn more conversions and leads.

4. Competition
The competition will always have an impact on the price. Whenever you are working towards getting to a certain type of person, you will always encounter working words reaching the same group of people. The competition level will always have an impact on the cost of the Instagram ads campaign.

In case there are other people placing bids to get to the same audience, it will lead to a fierce bidding war. Firms will have to outbid one another to get to the top. The CPC will increase as you try to bid against your competitors.

Which is a better platform to run ads – Facebook or Instagram?

Both Facebook and Instagram have their benefits and challenges when it comes to running ads. The same ad running on both Facebook and Instagram will never yield the same results. To determine the better platform to run ads between the two, you need to analyze factors like ads management, goals, content, and audience.

1. Ads Management
Both Facebook and Instagram are managed through the Facebook Ads Manager. The same location makes it easier for marketers to choose different placements and audiences. Campaigns are easily managed, and results are downloadable.

However, on Instagram, the ads manager uses the simplest route making it the best choice. Within a few taps, you will have your ad set up with an existing story or post. In case you are not interested in the nitty-gritty data and just interested in the bigger picture with an easy interface, Instagram is the preferable ads management platform for you.

2. Content
Check your existing content or content budget. What type of content do you have? Are you in a position of investing more? Do you have photos or videos that were specifically taken for ad purposes? Facebook and Instagram differ in the type of content and interactions. You have the option to advertise with different types of ads on Facebook, such as:

  • Single media: slideshow of images, videos or images
  • Carousel: Videos or scrollable images
  • Existing posts: Comprises of links that you have shared

You will have the same options as above with the Instagram ad types. However, you will not have the ability to make in-caption links clickable. You will instead have to use a call to action buttons to add a link.

3. Goals
Facebook Ad Manager has made it easy to choose goals as one is in a position of choosing their objective from the get-go. This will manage both the Facebook and Instagram ads, although not all the options will be available on Instagram. In case you wanted to advertise on Instagram via the application, ensure you do not have a choice in the objective. Always have this in mind whenever you are pinpointing your goals.

How does Instagram ad bidding work?

Since Instagram is part of the Facebook advertising network, the Instagram ads can be bought using an auction system to determine their price, just like in Facebook ads.

Every advertiser will set their ad campaign budget and a bid representing the maximum amount they intend to spend whenever a user completes the ad objective.

How much does it cost on average to run an Instagram ad?

It is a tricky question since costs are determined with different factors that are never revealed to the platform’s business.

The model is always based on the cost per impressions (CPM) and cost per click (CPC), while the prices are determined according to the Instagram ad’s auction.

Several factors determine your Instagram ads cost ranging from your audience to ad feedback.

For instance, AdEspresso recently researched on $100 million Instagram ads spent back in 2017. It discovered Q3 average cost per click (CPC) for Instagram ads varies between $0.70 and $0.80. Although this is an important benchmark, it will vary depending on the audience, auction, time of the week, time of day, competition, etc.

Some advertisers find Instagram ads to have a higher engagement, although it comes at a cost. According to Leverage Consulting founder Keith Baumwald, the costs of Instagram ads are slightly higher when compared to Facebook ads.

How do I budget my Instagram ads?

When it comes to setting your Instagram ads budget and schedule, you have full reign over when your ads run and how much will be spent on them.

First of all, you need to choose between a daily budget and a lifetime budget. Daily budgets allow your ads to run indefinitely while spending up to your allotted amount each day (you can still set start and end dates), while lifetime budgets will run for a set amount of time.

If you choose a lifetime budget, you can also select a specific schedule for your ads to run. Perhaps you want them to only be shown on weekdays or weekends. You’re able to manually choose your ads’ days and times will be shown to your target audience.

How do you run an effective ad on Instagram?

You need to put different factors in mind to run an effective ad on Instagram. Below are five main factors that will set apart Instagram ads that perform well from those that don’t.

1. Make the ads around based on your marketing strategy
Instagram ads, just like other digital and social media advertising forms, should never be created in a vacuum. You have to ensure the ads follow your business marketing and brand strategy. The ads need to support the brand promise and call to action, which feels right and natural for the brand.

You also have to consider how the ads will complement or enhance your social media campaigns.

2. Create images that are central to the campaign
Performing Instagram ads depend on a single image enticing viewers to respond. Images should be central to the call to action. Standout images will get more viewer attention. If possible, consider using images shot for Instagram campaigns.

3. Use Hashtags and Keywords
Hashtags refer to small keyword phrases immediately after the #sign that helps users organize their content according to what interests them most. Instagram users and advertisers can add hashtags making their content appear in particular searches.

When you tap the hashtag on Instagram, it will bring users to a page that shows all images tagged using the same hashtag.

You can always add hashtags to both the existing and new content on Instagram. In case you have not added them, you can always go back and edit the old photos. You need to use relevant keywords for your brand, user interest and product categories when adding the hashtag to your content.

4. Make good use of social media statistics
The majority of social media platforms offer data on the best performing posts and the days and times the post received the most clicks, views and shares. You can use this data to build your ad campaign around the times and days when people respond favourably to your posts.

It is also possible to use social media statistics to examine your Instagram followers’ most appealing offers.

5. Test the ad campaigns
Instagram ads are similar to other social media ad campaigns. You will learn a lot from testing the ad campaigns. After coming up with a benchmark ad, ensure you carry out test ads against the benchmark and examine the results. Check if the timing, offer, creativity, or audience bumps the response rate higher.

Is paying for Instagram ads worth it?

It is worth paying for Instagram ads as it will offer you lots of benefits to your business. The ads offer lots of attention. It will increase the opportunities of talking with your customer base. This will help increase the chances of them becoming fans and purchasing from you.

The Instagram ads will offer you the opportunity of specifying your audience location, interests, demographics, behaviours and more. You will be in a position of targeting people that have previously purchased from you or others like them.

Which Ads to use on Instagram?

There are four main types of Instagram ads you will encounter whenever you run an Instagram ad campaign.

Story Ads
They are the most recent option for advertisers aspiring to get too interested users. Keeping in mind that over 500 million Instagram accounts use stories daily, it is a great opportunity to help connect with different types of people.

Individuals also take a look at the business’s stories on Instagram. Recent statistics reveal up to 33% of the most-viewed stories on Instagram are from businesses. Individuals are always interested in hearing from businesses through the stories function.

Instagram stories make full use of the green. Whenever someone comes across an Instagram ad, they will only be in a position of seeing that on their screen. It also helps in getting your audience to focus on.

The stories ads are very effective as they help engage with the audience, and in return, they check out your products. Despite being a new feature, it has lots of impact on driving valuable results to your business.

Photo Ads
They are the most popular on Instagram. They are pictures that appear in the audience feed on Instagram. They usually appear in a portrait frame or square frame. The ads have a CTA button together with a sponsored tag at the bottom part. When using Photo ads, you must always settle in the right picture.

Photos looking like a stock photo-like will always stand out and easily deter individuals from interacting with your ad campaign.

Video Ads
These are another great option for your Instagram ad campaign. The work in almost a similar way as the photos except that they contain a video that can be up to 60 seconds long.
Videos are great when it comes to capturing your audience’s attention. Whenever the audience scrolls down through the feed, they will always come across your ad, and it will start playing immediately. It is a perfect ad to help catch the audience eyes. However, the videos will automatically play without sound.

Carousel ads
These ads are a perfect option for anyone interested in getting their audience to interact with their ads. The ads allow one to post several videos or photos in one post. It is a perfect way to provide your audience with different options for your product.

For instance, when promoting a new fashion line, showcasing a single piece will never do justice to the line. Although it will represent a new line, it will never show the audience the variety in your clothing line.

When using a carousel ad, you can use different videos and photos to showcase the product line. It will enable you to show the audience different varieties that engage more people. These ads will act as a great way of garnering interest and engagement in your ads. You will provide your audience with different visuals to see if they will be interested in your services and products.


We hope you now have an idea on how much it costs to advertise on Instagram. The cost of advertising on Instagram hugely depends on the bidding model you use like cost per impression and cost per click. Averagely, firms pay $0.20 to $2 per click.

Instagram is still growing and advertising options are becoming more robust. It is not yet saturated and very safe to assume more ad placements are on the way.

Download Our B2B Marketing Guide!

Download this free ebook to learn how to grow your business online.

Kshitij Chaudhary