Instagram, owned by Meta, is one of the premier social media platforms in the world and is often credited with introducing the idea of influencer marketing. Of course, influencer marketing is simply a modern twist on a long-standing approach to marketing in which companies enlist the help of established, popular public figures to help drive interest and sales. It can be said, however, that influencer marketing as we know it today emerged from Instagram, and Instagram where many of the most valued influencers house their largest following.

With that in mind, it’s clear to see why a business should use Instagram ads. Not only is Instagram home to the most famous faces on the internet, but it is a widely used platform by multiple age groups and boasts over 2 billion active monthly users worldwide. Instagram is also an easy platform to begin advertising on, partly due to its parent company, Meta, also running Facebook, meaning you can connect your Instagram account to your Facebook Business page. This lets you advertise across both platforms in a straightforward and time-saving manner, and utilize a full suite of advertising tools.

Another reason Instagram has become so popular for advertisers in recent years is that it has garnered a reputation as one of the more cost-effective social media platforms to advertise on. Knowing the platform represents a cheap option is valuable information, but what’s considered cheap in the world of social media advertising and how much does it actually cost to advertise on Instagram?

Answering the question of how much it costs to run Instagram paid ads can be tricky because there are four key factors that determine the cost of your Instagram ads, and each of them must be understood and accounted for to make an accurate estimation. These four elements are the bid amount, the ad relevancy cost, the estimated action rates, and the competition. 

Your bid amount determines how much you will spend on your ads, or to put it another way, how much you’re willing to spend to get leads. If your budget is $300, and your bid stands at a $1.50 cost per click (CPC), you can get a maximum of 200 clicks. On the other hand, a budget of $750, with CPC still at $1.50, would let you get as many as 500 clicks. Opting for a bid amount of $0.75, in both of these budget levels mentioned, would result in a higher click volume.

Your ad relevancy tells Instagram how relevant your ad is to its target audience. Instagram tries to get relevant content in front of its viewers, so your relevance is important to consider. Publishing less relevant ads will result in fewer actions, driving down your ad’s performance. Working hand-in-hand with this is your estimated action rates, which operate similarly in that Instagram wishes to share content with users that they believe will be engaging. So Instagram estimates your action rates and prices your ads accordingly.

Finally, the cost of your Instagram ads will depend on your competition. If there are many others bidding to deliver ads to the same audience, it will cost you more to come out on top. Ultimately, the highest bidder will get priority, but this may come to the detriment of their CPC.

With all of this information in mind, and after analyzing data from marketing gurus across the web, we can estimate that Instagram advertising, on average, costs up to $0.25 per click, from $0.03 to $0.08 per engagement, and anything up to $4.00 per 100 impressions.

It should be clear by now that Instagram paid ads can be extremely lucrative, but these ads are just the tip of the iceberg when it comes to advertising possibilities on Instagram. To truly maximize revenue on the platform, it’s vital to conceive and execute a well-rounded Instagram advertising strategy that includes more than Instagram paid ads.

Instagram’s massive audience and varied content style options combine to create a dynamic advertising marketplace. It’s recommended that advertisers take full advantage of all of these sources of interest, activity, and revenue. Stories and reels allow for highly-digestible short-form video content, and by following and using hashtags effectively, accurately identifying target audiences happens rapidly.

In recent years, the most popular videos have been getting shorter, meaning creators and advertisers alike have had to come up with creative ways to reduce the length of their content without compromising on its quality and clickability. Brands that have seen huge success on Instagram have seamlessly integrated creative elements into their content, such as eye-catching visuals, text overlays, and clear CTAs, while also embracing interactive content like quizzes, polls, and product countdowns.

To succeed with Instagram advertising, marketers must be ready to compete for relevance, and nothing helps this cause more than taking the time to craft a comprehensive Instagram advertising strategy that puts creative content at the forefront of the campaign. With the right content, costs can be kept to a minimum, and without it, a campaign is destined to run into trouble.

inSegment is Boston’s premier full-scale digital advertising agency with a dedicated team of social media experts that boast decades of combined experience crafting, implementing, and optimizing social media strategies for companies across a wide variety of industries.

If you don’t know where to start with advertising on Instagram, contact inSegment today and discover what a successful Instagram paid advertising campaign looks like.