instagram ads cost cover

How Much Do Instagram Ads Cost In 2020?

Sam Carr

Sam Carr

October 27th, 2020

Sam obsesses over three things in life: Animals, Films and Marketing. We may have over exaggerated his love for marketing.

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Did you know that the average cost per click for Instagram ads is $0.75?

Over the past several years, Instagram advertising has exploded thanks to the acquisition by Facebook back in 2012. The social network now offers a range of different advert types that has attracted millions of advertisers to the platform.

If you’re planning to run ads and campaigns on Instagram, then you’re probably wondering how much they cost. Maybe you already have some experience with other networks such as Google and Facebook Ads, but Instagram is new territory.

To help you plan your Instagram ad campaign, we’re taking a look at how much Instagram ads cost, what affects the cost, and what you can do to reduce your cost.

The first and most obvious question is: what’s a reasonable monthly budget for Instagram ads?

How Much Does It Cost To Advertise On Instagram?

Before starting any digital marketing campaign, it’s essential to get a good understanding of the costs involved. There’s no point spending $100 on advertising to get little to no results. But if you knew you’d need at least $500 to test the waters and get results, then maybe you’d rethink your strategy.

So how much does it cost to advertise on Instagram? And is it worth your money?

For a starter campaign, advertisers can expect to pay an average of $10 a day to test the waters. Which would equate to around $300 a month. Of course, depending on the level of competition and the chosen niche, it can significantly affect the cost of Instagram advertising.

In some industries, $10 might get you 20 clicks a day, while in others you’ll be looking at 10 or less.

When it comes to Instagram advertising, you’ll quickly realize that their pricing depends on a whole range of factors.

What Determines The Cost Of Instagram Ads?

cost of instagram ads

Just like the various other pay per click networks out there, Instagram also uses a range of factors to determine how much advertisers pay per click.

As Instagram is part of the Facebook group, you can be certain that they use similar factors that calculate the cost of Facebook ads.

If you want to get the most out of your ad spend, then you’ll want to pay close attention to these factors.

Competition

As with all pay per click networks, the level of competition and number of advertisers bidding on the same demographic dramatically affects how much ads cost per click. If nobody is targeting a specific demographic, then the chances are the cost per click will be significantly lower than other demographics with more advertisers.

Since Instagram uses demographic targeting, the more advertisers who are targeting the same demographic group will see a much higher cost per click. Compare this to advertisers who target less popular demographics in different countries, and they’ll have much cheaper clicks.

Having too many competitors can lead to a bidding war were they keep increasing their bid, which leads to high cost per clicks. This is also another important factor that has a considerable effect on how much advertisers pay.

Bid Amount

One of the most significant factors when it comes to determining how much Instagram ads cost is the advertiser’s bid. The bid amount determines how much an advertiser is willing to pay for a single click on their Instagram ad. Of course, every advertiser want’s to pay as little as possible per click, but the lower you place your bid, the fewer clicks you’ll receive.

However, in highly competitive markets, having a low bid simply isn’t practical.

To make bidding easier and more efficient for advertisers, Instagram has a similar feature to Facebook, which helps advertisers automatically adjust their bids. This means it will adjust their bid amount depending on certain factors such as how valuable they think a user is, or how likely they are to click an ad.

Ad Relevancy

If you’ve ever used the Google Ads PPC platform, then you will know just how important ad relevancy is. The last thing Instagram wants to do is show an ad to a user that isn’t relevant, as it significantly reduces the chances that they will click it. This ultimately means that Instagram won’t get paid.

In order to get more people to click your ad and to reduce your average cost per click, making it as relevant as possible to your target audience is crucial.

If people respond positively to your ad by liking, clicking and commenting on it, this will increase your ad’s relevancy score over time. At the same time, having a low relevancy score will increase how much you end up paying per click.

How To Lower Your Instagram Ad Costs

lower instagram ad costs

Now you have a good understanding of the different factors that affect how much Instagram ads cost, how do you keep your CPC as low as possible?

Known as ad optimization, there are a few ways that advertisers can tweak their ads to pay significantly less and stretch their ad budget.

Here are a few ways to ensure that you pay the lowest amount possible when running Instagram ads.

Optimize Ad Delivery

Before you start adjusting your campaign and playing with the settings, you should first ask yourself, what is the goal of my Instagram campaign?

Depending on what you are trying to achieve will determine what settings, options and bidding strategy you use.

Instagram has plenty of AI which can help you get the most out of your budget based on your goals. If you’re specifically looking for more conversions, then Instagram’s AI will target people who are most likely to convert.

Compared to regular and manual targeting, this type of ad delivery can drastically reduce your cost per click and get you more for your money. Nine times out of ten, it will outperform standard ad delivery settings, leaving you with more conversions and profit.

Use Automatic Bidding

A rookie mistake that many beginners fall for on Instagram advertising is the use of manual bidding. Lots of advertisers think that by using manual bidding, they have more control over their ads and that they’ll save money in the long run. They might have more control, but manual bidding is definitely holding back their campaign’s full potential!

Without any historic bidding data already in your account, manual bidding is pretty pointless. Instead, beginners should be taking advantage of Instagram’s automated bidding AI in order to collect valuable information on how much they should be bidding.

Once the AI has worked its magic, you can always revert back to manual bidding, but without that precious data, you could accidentally be paying more than you need to.

Enable Frequency Capping

How many times have you seen the same ad over and over again? After a while, they start to become very annoying!

If you want to ensure that your budget is being spent effectively across Instagram, then you should consider enabling frequency capping. When running a reach or brand awareness campaign, Instagram will try to target as many people as possible. But if people aren’t clicking or interacting with them, then this can actually end up costing you more.

Remember, if your ads don’t get likes, comments or clicks, then your relevancy score could plummet, which increases how much you pay per click!

By enabling frequency capping, you can reduce the number of people who aren’t interested in your ad and keep that score in the green.

Improve Ad Relevancy

The final way to reduce your Instagram ads cost is to improve your ad’s relevancy. Unless you’re a marketing god, the chances are you won’t produce the best ads on your first try.

This means that there is always room for improvement when it comes to your ads and campaign. If you want to keep your costs as low as possible, then A/B testing new ads to find the most relevant one is crucial. The end game is to find an ad that has the highest level of engagement and therefore, the highest level of ad relevancy.

If one ad is getting you 10 likes a day, how can you change it to get you 20 likes a day? By testing new ad formats and creatives, you’d be surprised at how much your “perfect ad” can be improved.

Instagram Ads Cost vs Facebook Ads

instagram ads cost facebook

By now, you probably have a good idea of how much Instagram ads actually cost and the different factors that contribute to how much advertisers pay.

But how do Instagram ads compare to other marketing platforms such as Facebook ads? Which one costs more and which is worth the money?

Like we mentioned earlier, Instagram was bought by Facebook in 2012, and since then, it has been included in Facebook’s ad system. In fact, in order to run Instagram ads, you need a Facebook account.

Since Instagram uses Facebook to manage its ads, the ad targeting is also very similar and uses demographic and location targeting.

According to statistics from AdEspresso, the average CPC for Instagram ranges from $0.70 to $0.80. To make it a single number, we’ll average it out to $0.75.

Of course, there are many factors that can change the cost per click of ads, including the campaign type, location, and industry.

With further statistics from AdEspresso, they also reported that the average CPC for Facebook ads ranges from $0.20 to $1.47 depending on the campaign objective. With the average of all the different campaign types coming in at $0.74.

Although the average CPCs on both networks are practically the same, this number will vary significantly depending on other factors. This means that if your CPC on Facebook costs more than your CPC on Instagram, then it’s likely down to your niche or individual campaign objective.

Instagram Ads vs Google Ads Cost

instagram ads google ads cost

Google Ads is the largest PPC network in the world by far. With over $100 billion spent on advertising every year, it shows no signs of being knocked from the number 1 spot any time soon.

But how does the pricing compare between Instagram ads and Google Ads compare?

As we already know from above, the average cost per click on Instagram ranges from $0.70 to $0.80. Of course, it can vary dramatically depending on certain demographics.

Compare this to Google Ads, and the results are not so straightforward. For starters, Google has two separate networks. Their search display network which displays text ads only on their Google search engine, and their display network which displays creative ads on 3rd party websites.

According to statistics from WordStream, the CPC average for Google search ads is $2.69 across all industries and $0.63 for display ads.

This means search ads are significantly more expensive than both Instagram and Facebook ads. This is likely due to the amount of competition, search volume, and different targeting options. On the other hand, display ads are slightly lower than Instagram ads, which makes them a strong competitor.

Summary

To summarize, the cost of advertising on Instagram can vary greatly depending on a whole range of different factors, which we covered. If you’re thinking of starting an Instagram campaign, then you’ll probably be looking at a few hundred dollars a month just to test the waters.

We also explored that not only do Instagram ads cost roughly the same as Facebook Ads, but they are also much cheaper than Google search ads. However, compared to Google’s display ads, they are slightly more expensive. This means that it might be a good idea to test out both platforms before drastically increasing your ad spend.

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