What is the Cost of Instagram Advertising?

Are you considering an Instagram ad campaign for your business? If so, you are probably wondering about the cost of Instagram advertising. The cost of Instagram advertising depends on several factors. For example, which bidding model you choose will affect the cost of your Instagram ads. In this article, we will break down how much Instagram ads cost, the cost of Instagram ads vs. the cost of Facebook ads, if Instagram ads are worth the money, the factors that affect the cost of Instagram ads, how Instagram ads work, how to lower the cost of your ads, and more!

what affects the price of instagram ads

Instagram Advertising

Instagram has more than one billion active monthly users, making it the one of the most popular social media networks in the world. In the United States, there are 140 million Instagram users. This makes Instagram an excellent platform for advertising your business! But if you’re interested in utilizing Instagram ads to promote your products or services, you are probably wondering how much Instagram ads cost.

What is the Cost of Instagram Advertising?

The average amount businesses can expect to pay for an Instagram ad is between $0.20 and $6.70. There are several factors that will determine if your ad falls on the lower or higher end of that spectrum. For cost-per-click ads (CPC), you will pay between $0.20 and $2 per click. However, for cost-per-impressions (or CPM), you will pay about $6.70 per 1,000 impressions.

The Cost of Instagram Ads vs. the Cost of Facebook Ads

Two of the major social media platforms that offer advertising are Instagram and Facebook. (And, as you probably know, Facebook actually owns Instagram.) If you are considering placing your ads on Instagram, you are probably wondering about the cost of Instagram ads vs. the cost of Facebook ads. But in addition to comparing their prices, you will also want to consider which network is more effective for reaching your target audience.

As mentioned earlier, an Instagram ad costs between $0.20 and $6.70. Facebook ad rates are more expensive. Facebook ad costs run between $0.97 and $7.19.

More importantly than just the cost of a single ad, let’s look at the demographics of each Facebook and Instagram. Facebook ads are capable of reaching virtually any age group, because people of all ages utilize Facebook. Instagram, however, has more users between the ages of 25 and 29 years old. If that is your target audience, you will likely have luck using Instagram ads. If it’s not, Facebook might be your better bet. Though the cost can and should play a part in making your decision, ultimately you don’t want to spend money on ads on a platform where you can’t reach your target audience.

are instagram ads worth the price

Are Instagram Ads Worth the Price?

Yes, Instagram ads are worth the price. Let’s talk about what makes Instagram ads worth your valuable ad spend:

High Click-Through Rates

Instagram ads are known for having high click-through rates (or CTRs.) According to Fortune magazine, Instagram ads have a click-through rate 2.5 times higher than other platforms. (However, don’t forget that your CTRs will depend on if you are reaching your target audience and the quality of your ads, too.)

Advanced Targeting Options

Instagram offers advanced targeting options. (To be fair, so does Facebook.) You can utilize their options to target your audience very specifically and see a higher return on your investment.

Sales Generation

Instagram ads generate sales – especially sales with higher order values. According to Shopify, the average order value for Instagram users is $65. Facebook’s average order value is only $55.

Increased Engagement

Did you know that Instagram gets ten times the engagement rate of Facebook? If you have followers who are engaging with your brand on Instagram, you are even more likely to have successful Instagram ads.

High Conversion Rates

Another reason why Instagram ads are worth the investment is that they maintain high conversion rates. Don’t believe it? The average conversion rate for Instagram ads is 1.08%. Compare that to the average conversion rate for Pinterest (0.54%) and Twitter (0.77%.)

instagram ads vs Facebook ads

What Factors Affect the Cost of Instagram Advertising?

There are several factors that affect the cost of Instagram ads. Let’s discuss the different factors that will affect the cost of your ads, to give you a better idea of what your own ads will cost:

Bid Amount

Before you get started with your Instagram ad campaign, you will need to decide how much you’re willing to spend. Your budget will affect your bid amount, and vice versa. For example, if your budget is $200, and your bid amount is $2 per click, you can only get 100 clicks on your ad. However, if you have a $1000 budget with a $2 per click, you could get 500 clicks. You will have to determine a bidding strategy and a daily budget to ensure your campaign is cost effective.

Ad Relevancy Score 

The score that Instagram gives your ad – called your ad relevancy score – will also affect the cost of your Instagram ads. Instagram wants to show their audience relevant content in their feeds. So, Instagram grades your ad by determining how relevant it thinks it is in relation to the people who will see the ad, and by how people react towards your ad. For example, if people respond positively to your ad buy clicking, commenting, and liking it, your score will go up. However, if your ad receives a negative response, like being hidden from people’s feed, this will lower your ad relevancy score. A high relevancy score means you will pay a lower amount for your ads.

Estimated Action Rates

Your estimated action rate will also affect the cost of your Instagram ads. Estimated action rate is determined by Instagram regarding the likelihood of people acting on your ad. Basically, Instagram wants to figure out how likely it is that your audience will engage with your ad. Engagement means clicking or converting. Instagram wants to promote ads that will get high engagement. So, if Instagram thinks lots of people will like your ad, they will give you a lower bid amount.


How much competition you face will also determine the price of your Instagram ads. If you are trying to reach a popular target demographic, there will be a lot of other companies fighting for their attention, too. This means the price of your ads will go up, and can even lead to a bidding war. This can drive up the price of your Instagram ads.

Time of Year

The time of year during which you run your campaign can also affect the cost of your Instagram ads. For example, advertising prices go up during the holidays, especially around Christmas. More companies are competing for ad space during this time of year, which drives up the cost-per-click.

Day of the Week

People spend more time and engage more on Instagram during the week than on weekends. So, for example, it’s more expensive to run an ad on Monday than on Sunday.

Target Audience

Did you know that it is more expensive to advertise to women than men? Women are more likely to engage with content on Instagram, so it costs more to reach a female audience.


The market you are reaching out to can affect your Instagram ad prices, as well. For example, some industries, like clothing companies, are much more expensive to advertise on Instagram because there is stiff competition. It’s also more costly to run ads for B2B companies, because there are fewer businesses on Instagram than there are people.

cost of instagram ads

How Do Instagram Ads Work?

Now that you know how much Instagram ads cost and the factors that can affect the price of your own Instagram ads, let’s talk about how Instagram ads work. Instagram ads are paid content that will appear in your chosen audience’s newsfeed and stories. They are targeted towards the demographic that is most likely to be interested in your business, by their interests, age, gender, etc.

The ads are meant to blend smoothly into users’ feeds, so that they are hardly recognizable as ads. However, there are two ways that you can tell a post is an ad. The first indication that a post is an ad is that it will say “sponsored” under the company’s name. There will also be a clickable call-to-action like “shop now” or “learn more” at the bottom of the photo.

How Can I Lower the Cost of My Instagram Ads? 

There are a few tips and tricks you can use to try to lower the cost of your Instagram ads and maximize the return on your investment:

Use Automatic Bidding

If you are just starting out with Instagram advertising, we recommend using automatic bidding for your first campaign. This is the easiest way for you to get the best bid for your campaign. It can be difficult to know without any previous data what your bid should be. If you use automatic bidding, you won’t mistakenly overbid to run your first ad. This is just one way you can lower the cost of your Instagram ads.

Use Precise Targeting 

It’s important to make sure you are reaching people who will actually be interested in your ads. Otherwise, you are wasting your valuable advertising budget. The way to do that is to use precise targeting to reach your target demographics. Instagram allows you to target people through a variety of ways:

  • Demographics: Demographics are the frequent way of targeting leads. Your targeting options include gender, age, and race.
  • Location: Especially if you are a local business, this is a helpful way to reach your target audience. You can target people in your area, as broadly as a country or as small as a postal code.
  • Interests: You can target your audience based on their interests, like underwater basket weaving, sports, or computers.
  • Behaviors: You can also target people based on the steps they take to browse your site.
  • Custom Audiences: These audiences are unique to your business. With custom audiences, you can import their contact information (like their email) into your targeting options. This way, you can target people who you know are already interested in your company.
  • Lookalike Audiences: Once you know the type of audience you are looking for, you can target other people who are similar to them. This helps you find people who might not be aware of your company yet, but will probably be interested in your goods and services.

Set Goals

Be sure to set some goals before getting started with your Instagram advertising campaign. You will want to pick between these three goals to decide what you want to accomplish:


An awareness campaign is centered on increasing awareness for your brand, company, product, or service. You want to create positive buzz around your business, make people aware of your company, and help them learn more about it. If this is your goal, you will want to run a cost-per-impression campaign.


The goal of consideration is all about educating your audience. You will want to provide your target audience with intriguing information and statics that compels them to buy your product or service. For this goal, you will want to run a campaign focused on earning clicks on your site, views, and reaching leads.


Most businesses start their advertising campaign with the goal of getting their target demographics to convert, whether converting in that instance means downloading their app or purchasing their products and services. If your goal is conversion, you will want to create a persuasive call-to-action that convinces your audience to buy your products or use your services right away.

Create Landing Pages

Another way to reduce the cost of your Instagram ad campaign is to create relevant landing pages. Most businesses just direct leads who click on their Instagram ad to their home page, which is a mistake. It doesn’t help convert potential clients, because the home page isn’t relevant to the ad. Instead, create a landing page specifically for the Instagram ad. Make it as easy and simple as possible for the user to purchase whatever they clicked on in the advertisement. Landing pages result in conversions, which helps you see a return on your investment. If you want to build a successful Instagram ad campaign, you need to build landing pages.

Test Different Ads

Trying out different ads is a crucial part of your campaign. It’s more than likely that the first ad you put out won’t be the best or most effective. If you test out multiple versions, you will find one that is most effective, which will help you create better ads in the future. The better your ad is, the higher Instagram will rate your ad, the higher ad position you’ll get, and the lower cost-per-click you’ll have to pay. This A/B testing is another way you can lower the cost of your Instagram ad campaign and increase its effectiveness.

cost of instagram advertising

How Do I Start Creating My Instagram Ads? 

Are you ready to start creating your own Instagram ads? (Psst: you might want to get verified on Instagram before you get started.) There are three different ways to create your ads:

Instagram App

Yes, you can start creating your own ads right on the Instagram app. When you access your ads in the app, you can share Instagram posts you’ve already created. First, select the post. Then, launch it as a promoted post. You can also track how many people view and engage with your post.

Ads Manager

You can also create Instagram ads in Facebook’s Ad Manager tool. It is a simple and effective tool for running ads. You can launch your campaign, make changes as you go, and keep an eye on how the campaign is doing.

Instagram Partners

If you don’t want to worry about launching or creating a campaign yourself, you can also use the Instagram Partners program. This program helps you out if you don’t have the time or experience to run your own campaign. The experts will help you buy ads and in each step of the process. You can also hire a digital agency to help you with running your ad campaign and creating content for your Instagram.

What Kind of Ads Can I Run on Instagram?

There are four main types of ad formats available for you on Instagram:

Photo Ads 

The most common Instagram ads are photo ads. Your single image will show up in your target’s Instagram feed. These posts have a call-to-action button at the bottom and are also marked as sponsored content. If you choose to run a photo ad, you need to pick an option that fits in Instagram’s style. The most natural photos are the most effective. You want it to look like a regular post and not obviously like an advertisement, but you also want to reflect your branding.

Video Ads

Another option for Instagram ads are video ads. Other than the fact that it is a video, it is very similar to an Instagram photo ad. Your video can be up to one minute long. Video views are an easy way to get your audience’s attention. The video starts playing automatically as the person scrolls through their Instagram feed. However, they play without sound unless the viewer turns the volume up. So, don’t leave any critical information just in the audio of your video.

Instagram Story Ads  

Instagram Story ads are the latest choice of ads for advertisers. Stories are a great opportunity to connect with your audience. The benefit of Instagram Story ads is that they take up the entire screen, so your audience won’t be distracted by other content on their phone.

Carousel Ads 

The last option for Instagram ads is carousel ads. Carousel ads let you post more than one photo or video in just one post. These ads are very interactive and show your target audience multiple options of your products or services. For example, if you are advertising your latest line of jewelry, showing just one necklace doesn’t give your audience an idea of the whole piece. In a carousel ad, you can showcase some earrings, a necklace, a bracelet, etc.

You can also sponsor a post by an influencer on Instagram, which is a different type of Instagram ad.

instagram advertising

Instagram Sponsored Ads Costs

Unfortunately, there is no specific cost of sponsored ads on Instagram because the cost depends on many factors, including the rates of the influencer.

Get Started with Instagram Advertising with SEO Design Chicago

Now that you know everything there is to learn about the Instagram advertising pricing, contact us at SEO Design Chicago today so we can create a customized Instagram ad campaign for your company! We specialize in lead generation for our clients on Instagram.


  • What affects the cost of an Instagram ad?
  • How much does it cost to advertise on Instagram?
  • How does Instagram advertising work?
  • What is the Instagram cost per click?
  • What types of ads are on Instagram?

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