The Complete Instagram Ads Costs Breakdown

Instagram is undeniably one of the best and most popular social apps today. It is not just for the young and glamorous, but for people of all ages, lifestyles and interests.

Since Instagram was acquired by Facebook, Instagram has become a great platform for marketers to not only connect with their fans and business prospects, but also promote their latest products, services, events and promotions. Instagram is indeed the new Facebook.

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But that does not mean that Facebook is no longer relevant to social media advertising. In fact, Facebook and Instagram work together to help marketers bring more success to their marketing campaigns. You can use both Facebook and Instagram for your advertising needs. Sure, you can use just Instagram if you like.

Whatever your choice is, Instagram is a social media platform that you should not ignore. With the power of catchy captions and beautifully-captured pictures, you can gain more Instagram likes and followers, hence increase your brand popularity.

What’s even better is that now some Instagram users can register their credit cards as part of their profile and make a purchase within Instagram. How cool is that? That means if you are selling commercial products online, you really need to be on Instagram now!

Due to its potentials, more people are spending their dollars on the platform. You do not want to miss out!

So how much does it cost to advertise on Instagram? We’ll get there. Keep reading.

You may view our complete Facebook Ad cost breakdown here

A Short Brief About Instagram Ads Cost

While Facebook and Instagram are both amazing advertising platforms, it costs more to advertise on Instagram than on Facebook. So if you are on a tight budget, perhaps you could start advertising on Facebook for a start.

But if you already have a budget allocated specially for Instagram, then go on and create your advertisements on Instagram. Depending on industry, Instagram is a highly effective advertising tool for businesses, mainly e-commerce.

Now let’s talk about Instagram Ads cost. In average, Instagram CPC costs somewhere between $0.50 and $1.00. Industries that are more competitive (like fashion or food and beverage) will have higher ads cost. In fact, Instagram Ads cost can reach up to $3.00 per click. Sounds expensive, right? But you can always lower your ads cost. We’ll teach how to do it.

In this article, we will also explore the costs for advertising on Instagram, Instagram ad bidding, ad budget and bids and ad delivery optimisation method.

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Exploring Instagram Ads Cost

If you are marketer, you should already know that ROI is highly important in determining the level of success of your social media marketing. You need to look at the price of an ad click or conversion.

In average, the cost-per-click (CPC) on Instagram is around $0.70 to $.1.00. Likewise, how much you will spend will be determined by a lot of things like industry type, age groups, gender, the time of year, etc.

Let’s look at AdEspresso’s findings on Instagram Ads cost in 2017.

CPC by Age Range

CPC prices may also be influenced by different age groups. The age group that has the highest CPC on Instagram is:

• 18-24 years old (with an average CPC of about $1.07 in 2017)

That said, if you are going to market your product on Instagram, you have to ask yourself first if what you are selling is going to be suitable for people of this age group.

If you are only targeting senior citizens from the age between 55 and 64 years old, Instagram will still be an excellent advertising marketing platform for you. Do you know that 55-64 age range also has a high CPC, with an average CPC of $1.03?

This could be due to their purchasing power. People from this age group are likely to have more money to spend and less (or maybe no more) debts to pay. That said, don’t ignore older shoppers! They could be more valuable and wealthier than most young shoppers.

On the other hand, age groups of 35-44 and 45-54 years old have slightly lower CPC with the average CPC at $0.97 and $0.94 in 2017. The age group of 13-17 years old is the cheapest to target, with an average CPC of just $0.47.

CPC by Country

It is highly important for you to know which country you want to advertise your product as the location you choose has a big impact on your CPC. AdEspresso found that the U.S had the third most expensive CPC at $3.56. Viet Nam’s CPC was $3.73 and Kenya’s was $3.68.

As for the average CPC by country, it was about $2.40, with the Republic of Korea being the closest to the average at $2.44 and Kuwait at $2.10. The country with the least expensive CPC in Q4 2017 was Liechtenstein at $1.37.

Tip: To save on costs, consider focusing your ad in countries with active online shopping audiences yet lower CPC.

CPC by Ad Placement

Where you place your ad is going to affect the performance of your ad result as ad placement is a highly important element for optimising your ads in order to give you better reach and result. Do you want to place it in the user’s main mobile feed, desktop feed, right column, audience network or Stories?

Towards the end of the year, you will notice higher CPC for right column and desktop news feed placement. In 2017, the right column placement performed better than all other placements with an average CPC of about $0.80.

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We do encourage you to use Instagram Stories as it is relatively cheap and effective in getting you the highest levels of engagement.

CPC by Month

As mentioned earlier, you will notice higher CPC towards the end of the year. AdEspresso found that in Q4, the average CPC is about $1.10, which is 6% higher than the average CPC in Q3 of $1.04. January, February and March are the cheapest months to advertise, whereas October, November and December are the most rewarding times for conversions.

CPC by Day of the Week

Everyone has their own version of the best times to post on Instagram. The thing is, these best times are not always applicable to everybody. Therefore, it is important that you analyse your own online activities and decide which times are the best for you when it comes to posting on Instagram.

Based on AdEspresso’s case study, weekdays have higher levels of engagement, making them more expensive.

Wednesday is the most expensive day to post on Instagram, with an average CPC of $1.03 in 2017. The second most expensive day to post on Instagram is Tuesday, with an average CPC of $0.98. Thursday and Friday have the same average CPC of $0.92.

CPC by Gender

On Facebook, targeting women is often more expensive than men, perhaps because there are fewer men on Instagram, although the number of men is slowly increasing now.

As discussed earlier, Instagram Ads cost is higher than Facebook Ads cost, which means you can expect to see your ad placement to be more expensive on Instagram than on Facebook.

For example, while it only costs an average of $0.35 for Facebook Mobile newsfeed, it costs about $0.70 for an average CPC on Instagram. That is a huge price difference, is it not?

Of course, if you are getting positive ROI from Instagram, every penny invested on your ad is going to be worth it. The good news is Instagram Ads have a high ROI and conversion rate.

Do you know that in 2018, females make up 50.7% Instagram users worldwide? Only 49.3% are males.

AdEspresso stated that in 2017 the highest CPC for targeting women in Q4 was $1.17. The CPC for men was way lower. Why is that?

It is possible that Instagram seems to attract women more than men due to its nature that focuses a lot on appearance. But as times go by, there has been a significant increase in the number of male users on Instagram.

How to Get Higher ROI for Your Instagram Ads

In order to get the best ROI for your marketing effort on Instagram, take advantage of Facebook’s automatic placements options and Instagram campaign reports to determine the best place for your ads to be shown.

If you are a B2B business, your Instagram Ads cost may be higher than B2C businesses. This is because Instagram is not an ideal place for people looking to buy business tools.

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Exploring Instagram Ads Bidding

If you have already advertised on Facebook, then you will find advertising Instagram familiar as it has similar ad bidding to Facebook. Instagram is owned by Facebook after all.

When you are bidding on Instagram, you are entering a world of auction where everyone else like you is fighting for the best ad placements. To win the ad placements of your choice, you need to outbid your competitors first. You are going to need more than just good luck to have the right placements.

There are three factors that will influence your advertising cost on Instagram. They are:

1. Facebook campaign’s bid – How much you are willing to pay Instagram to deliver your ads will determine how good your ad placement is going to be. Try using automatic bids if cost is not really a big issue.

2. Quality and relevance score – If you have a good score, you can rest assured that you will get a satisfactory ads result. To score well, you must have a good quality content to show.

3. Estimated actions rates – This means that Facebook is going to determine how likely Facebook users are going to interact with your ads based on a number of different factors.

In short, to ensure that you are getting the best ads result, you need to be willing to bid a good amount of money and create highly relevant Instagram ads. There is no point bidding high if your ads are not relevant or compelling to your target audience.

So should you go for manual or automatic bidding?

It can be quite confusing to set up your ad campaign’s budget and bidding in the Facebook Ads Manager if you have never done it before. First of all, you need to understand the difference between automatic and manual bidding.

Automatic bidding

Use this method if you are not sure how much a result might cost. It is Facebook’s job to help you keep your advertising costs low while getting you enough results.

Manual bidding

Use this method if you want to set your own bid based on the conversion you think is worth for you.

If you are still unsure which method you should choose, try going for automatic bidding first, or use the bid suggested by Facebook. Also, always change the Facebook’s pre-set manual bid in the custom bidding box. For example, if Facebook suggests you to go for $2.00 per link click and the suggested bid range is somewhere between $0.70 and 1.83, you can place a bit of $0.80 or $1.00.

Did you know that if you choose to optimise your ad delivery for conversions, Facebook will give you two manual bidding options, which are Maximum and Average bid?

When you choose Maximum bid, Facebook will not deliver your ads should there be a risk that the CPC result will be higher than your bid. But if you choose the Average bid, Facebook will help you achieve an optimal ROI by optimising your ad using the pacing method.

If you are still confused about what pacing is all about, let us explain it to you. Pacing is a basic concept in online advertising that helps marketers control their ad spend so it can be used wisely.

Without proper use of pacing, your budgets could dry up quickly before you even achieve your goals. With proper pacing, you can rest assured that you will not miss out on the days and time that your ads will perform at their best.

Tip: Use Maximum bid if your goal is to maximise your profit. Use Average bid if you do not mind paying a little more per conversion while getting a lot more of them.

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Setting Up Your Instagram Ads Budget

To customise your Instagram Ads campaign budget, go to the Budget & Schedule section while you are completing your Instagram campaign setup process.

There are two types of ad budgets:

1. Daily budget

Daily budget refers to how much Facebook will spend on getting your ads out to your target audience every day during your campaign period.

Your daily budget is set to average, which means that Facebook will determine how your daily budget is worth the result you are getting daily.

2. Lifetime budget

A lifetime budget refers to how much you are willing to spend on your Instagram ads during your ad campaign period. Note that once your ad is published, the budget type cannot be edited. You can only change the amount of money you are willing to spend. Therefore, make sure you pick your budget type carefully.

Choosing Your Instagram Ads’ Delivery Optimisation

You might be wondering what ad delivery optimisation is. According to Facebook, your optimisation choice tells Facebook what you is important to you when your ad is being delivered.

For example, you can tell Facebook that you want to show your ad to the people in your target audience who are most likely to click a link to your website (optimising for link clicks) or show it as many times as possible (optimising for impressions).

There are several ad delivery options for you to choose from, depending on your campaign objective which you have to choose when setting up your Instagram ads. You can choose conversions, post engagement, impressions, link clicks, daily unique reach or brand awareness. Let’s explore them together.

Conversions

If you choose conversions, Facebook is going to help you deliver your ads to people it believes are going to convert.

Post engagement

When you bid on this, Facebook will show your Instagram ads to people it believes are going to interact with your ads.

Impressions

If you are paying for impressions, you will have your ads displayed to as many people as possible within your advertising budget limits. When you choose this method, there will be no optimisation on who is more likely to engage with your ad.

Link clicks

This method will help you gain clicks on your ad, which is essentially great when you have a new product to promote. Every time someone clicks on your ad, you will get charged.

Daily unique reach

With this method, Facebook will help you deliver ads in your ad set to people up to once per day.

Brand awareness

New to the market? Let Facebook help you get your ads delivered to the people who are most likely to be interested in what you have to offer. So whether you have a sunscreen, bikini or beach sandals to promote for the summer, Facebook will help you acquire new Instagram followers who may be interested in your product.

Read this article about How to Get Your Instagram Business Profile Verified

Keeping Your Instagram Ad Costs Low

We all want to keep our ad costs as low as possible. When done properly, you can achieve great results with less. Here’s how to do it:

1. When in Doubt, go for Automatic Bidding

For first timers, we encourage you to use Automatic bidding first. If it is your first time advertising on Instagram, you do not have any previous data to tell you what the average CPC is. Without such data, you might end up overbidding or underbidding, hence getting disappointing campaign results.

But if you must use a manual bid, then be sure to look at Facebook’s suggested bid and bear in mind the Instagram ad cost that you might have to pay for your campaign.

2. Optimise Your Ad for Conversions

Choosing to optimise your ads for conversions is an excellent move for ensuring that Facebook will auto-optimise your ad campaigns so you will achieve more results at a lower cost in the end. Facebook’s algorithm has been very impressive so far and you will likely convert the people you wish to target.

3. Select Frequency Capping to Control Your Ad Spend

Should you choose Reach or Brand Awareness as your campaign’s objective, then you will have the option to set a frequency cap for your campaign. What frequency cap does for you is that it lets you choose when your target audience can see your ads. That way people do not have to see your ads too often and get bored of them.

Did you enjoy this read? To get more updates like this, be sure to check out our other post here we share about the right techniques on using Facebook Ads to scale eCommerce here.

Also, if you need a eCommerce Agency, Adwords agency or a Shopify developer for your ecommerce, please do not hesitate to reach out to us. We  will help you create cost-effective ad campaigns. We are also a qualified Shopify developer.