Instagram, as a social media app, has great business potential. Most small business owners use it to reach the desired consumer base. Primarily a picture-based platform, it allows users to showcase their products and drive sales. Short reels further increase the engagement and persuasiveness of the platform in inspiring people to make a particular buying decision. Through Instagram ads, one can further expand the visibility and discoverability of one’s business; all one needs is a good professional Instagram profile combined with an official website.
Are you suddenly feeling overwhelmed by the option? Are you unsure of the avenues and the ways Instagram ads can prove to be profitable for your business? Confused about what type of audience you should target to reach the right kind of people? If you know about that, you don’t know how to create ads. And most importantly, How Much Does Instagram Ads Cost?
In this blog, UnityDiv will guide you on how to run Instagram ads, what is the best time to run ads on Instagram, how much Instagram charges for ads for 1 year, and whether Instagram ads are worth it. So, let’s know about all that in detail!
What are Instagram Ads?
Instagram ads are posts designed and shown by businesses on stories, news feeds, and pages to make people explore their products or services and make a conversion. All these ads are highly specific based on the targeted audience’s location, age, and interest. The dynamic nature of Instagram ads allows business owners to showcase them either in static visual form or in the form of multiple images or videos (a kind of what is formally referred to as a carousel ad). It is important to pinpoint here that Instagram ads resemble, to a great extent, normal Instagram posts, with the exception that they display a sponsored label to indicate the post shown to them was actually an ad. The viewers might also see additional features that are usually not seen in other normal Instagram posts, like Call-to-Action (CTA) buttons, links, or product tags.
How Much Do Instagram Ads Cost?
A great number of factors influence the price of Instagram ads, among which include the advertiser’s total budget, the type of ad, and the duration for which the ad was being displayed on Instagram. In the end, the cost of the Instagram ads is in the hands of the advertisers. It’s they who decide whether they would like to go with the daily or lifetime budget. As for the average cost, it is;
| Average CPC | $0.01 – $0.25 |
| Average CPM | $0.01 – $4.00 |
| Average CPE | $0.03 – $0.08 |
| Per Month Advertising Cost | $101 – $500 |
| Per One Thousand Impressions | $2.50-$3.50 |
Factors Determining Instagram Ad Cost
A number of factors collectively influence Instagram ad costs. Understanding them is crucial before formally kickstarting the process of Instagram advertisements.
Auction-Based System
On Instagram, advertisers have the capability to bid for their ad space. Instagram will prioritize the rank of those ads made by the highest bidders. The advertisers who pay more, their ad will be shown to more people. Within the bidding system, Instagram offers several bidding options;
- Spend-based bidding: Under it, the primary focus is on the results.
- Goal-based bidding: Under it, the focus of the advertisers is on the outcome. That means how much he gains from the amount spent on a particular ad.
Cost Per Click or Cost Per Thousand Impressions
Another factor that influences the pricing of Instagram ads is the number of clicks the ad gets. Now, that varies from ad to ad. What type of niche or industry does the business belong to? Who is the target audience, and what is the competition in that ad niche? For example, certain niches like finance or tech have higher cost per click than other niches because the competition here is fierce.
Budget
Daily or lifetime budget also decide the ad cost on the Instagram. It tells the monetary potential of the advertisers to spend on the ad campaign and within what timeframe. A daily budget limit option on Instagram allows advertisers to set limits on how much to spend in a day. A lifetime budget is the total amount that advertisers are willing to spend over the course of the campaign. The advertisers have a free hand in terms of adjusting for the daily and lifetime budget.
How to Optimize Instagram Ads
Here are the best ways to promote on Instagram;
- Always choose compelling visuals to display your ads. Don’t post boring, irrelevant photos. Instead, always use high-quality images.
- Use META Conversion API to track the performance of your advertising campaigns.
- Focus on precise targeting and the Instagram algorithm also allows one to expand their reach in case of broad targeting.
- No matter how good your ad is in outlook, the outcome will be low if the landing page is not well-designed. Here, improving the structure of Instagram account is the key. Set it properly, and use automation tools to maximize the performance of the ad campaign.
- Ad targeting must be done in a creative manner. Design your ad in such a way that it becomes highly engaging, drive conversion, and generate more leads.
- Conduct A/B testing on different versions of your ad campaigns to see what works best and what is not yielding the desired outcome.
Also Read: How to Measure Social Media ROI? A Complete Guide
Final Thoughts
Indeed, nothing can work better than Instagram ads when it comes to attracting the right kind of interested audience toward one’s business. Its potential to drive sales, create increased brand awareness, and maintain an engaged audience is unparalleled. However, to make full and maximum use of Instagram ads, setting the budget right and ad optimization is the key. Knowing it increased importance, UnityDiv professionals particularly focus on that. We put them at the best time to run ads on Instagram.
So, if you want to improve your business sales, contact us now for optimized social media management and ad advertising-related services.
