Instagram Advertising: How much Instagram Advertising cost

Instagram is one of the popular social media platforms after Facebook with more than 1 billion active monthly users. Being a leading image sharing platform, businesses across different industries look to advertise their products and connect with their potential customers. But the question is how much does it cost to advertise on Instagram. 

If you’re not quite sure about how much it costs to advertise on Instagram? then make sure you stick till the last. As we are going to highlight every small detail about how the Instagram ad works and the cost you need to pay to advertise on Instagram. 

Table Of Content: 

An Overview Of Instagram Advertising

Earlier Facebook ads were considered the best and only option to reach the maximum user by targeting niche markets. Not only that but Facebook ads also grabbed many marketers as well as business attention as it helps them to use various targeting features, placement features, and more to optimize their campaign. 

In the same way, Facebook-owned image sharing platform “Instagram” became the biggest opportunities for marketers and businesses to target and connect with their potential customers. Today more than 67% of the US adults age group between 18 – 29 use Instagram and 89% outside the US. So if you think your potential customers are not on Instagram then we recommend reconsidering your social media marketing strategy. 

Instagram is continuously rolling out new features for users as well as marketers. If you have already used Facebook advertising then operating Instagram ads won’t be difficult but it all comes down to how much it costs to advertise on Instagram. 

In this article, we are going to highlight every small detail about Instagram advertising cost and some important tips that will help you to lower your Instagram advertising cost. Not only that but we are also going to give a detailed report on what influences Instagram advertising cost.

Why Should Businesses Advertise on Instagram? 

Before we get started with Instagram advertising costs let’s understand why small and large scale businesses should advertise on Instagram? Compared to other social media platforms Instagram is growing faster and the features offered by them is making marketer and advertiser assume that sooner or later it’s going to be one of the leading platforms with the maximum number of users. 

According to the marketer,  US companies that are using Instagram for marketing are rapidly growing from 53.1% in 2016 to 75.3% in 2020 beating all the other social media platforms except Facebook. From the percentage growth, we can determine that sooner or later it will beat Facebook as well. 

Instagram uses the same tools as Facebook making it easy for any marketer and advertiser to get started with Instagram advertising. Not only that but both platforms are connected so if your business is already using Facebook advertising then you can make use of data to target your audience. 

When it comes to engagement rate, Instagram offers a higher engagement rate compared to any other social media platform especially with it comes to. There are many businesses out there who have benefited and their revenue grew just using Instagram ads. If you think your product is visually engaging the Instagram ads can help you to generate higher ROI. 

Apart from that, the appearance of Instagram ads is very much similar to the regular post.  In short Instagram, ads are non-intrusive which means your target audience is less likely to get annoyed if they come across your ad. So, Instagram advertisements could bring a lot of value if used in the right way with an effective strategy. 

How much does it cost to advertise on Instagram?

Most of the markets and businesses think that Instagram ads use the same model as Facebook ads and both platforms cost the same. But in reality, the Instagram advertising cost is very much dependent on your target audience, age group, gender, and many other factors. So before we highlight the factors that decide the Instagram advertising cost. Let’s get small on average how much it costs to run an ad on Instagram. 

The average Instagram advertising cost ranges between $0.50 to $6.70 depending on what bidding model you select for your campaign. The average CPC ranges between $0.50 to $2 per click (the CPC is very much dependent on the demographics you are targeting. On the other hand, the CPM (cost per impression) is about $6.70 per 1000 impressions. 

All the above-estimated costs may not be the same for your campaign, there are chances that you might get high ad cost or low ad cost. SO let’s take a look at some of the important factors that induce Instagram advertising cost. 

Different Factors That Determines Instagram Advertising Cost

As mentioned earlier Instagram Advertising cost is dependent on various factors. On the internet, you will come across various numbers but to know the exact cost you need to first understand what determines the Instagram advertising cost. There are chances that your campaign might be costing you higher than you expected. So let’s take a look at some of the common factors that determine Instagram ads cost:

1. Instagram Advertising Cost determined using Ad relevance

When it comes to deciding the Instagram advertising cost then ad relevance and quality will play a major role in increasing or reducing the wild campaign cost. Depending on the ad relevance score one can determine how relevant your ad is to the user. Instagram and Facebook both want their users to see ads that relate to them. 

Because all the social media platforms look to offer an optimized user experience but if the user starts to come across irrelevant ads then it may frustrate and annoy them. That’s the reason why Instagram and Facebook have started to offer multiple options that allow users to hide the ad and mark them irrelevant. These types of practices send negative feedback to the platform and reduce the relevancy score.  

On the other hand, if you are targeting the right set of audiences then it will send positive feedback about your ad which will help you to improve your ad relevance score. Some of the actions that determine the relevance of your ads are like getting users to like your post, comment, take action, and more.  

Remember getting too much positive feedback will help your ad to get placed over an ad with low relevance. Apart from that if you are creating quality and relevant ads then your ad campaign amount will be as low as possible (if you are competing in a less competitive environment). 

2. Instagram Advertising Cost determined using Estimated Action rate 

Another factor that influences Instagram advertising cost is the estimated action rate. The estimated action rate is determined by Instagram based on the previous action of users it tells about how many target users are likely to take action on your ad like downloading the app, visiting a website, and more). 

By using the estimated action rate Instagram identifies an ad that will perform better aiming for the audience. By creating an ad you are not only advertising your product and services but also helping the platform to offer users a solution. For example, if users are looking to buy shoes running in offer or sales and somehow they come across your ads that are promoting shoes in black Friday sale then they are likely to take action on it.  

If Instagram identifies that people can take action on your ad then they will give preference to your ad. By this, you will obtain a lower bid amount and drive more leads and conversions. 

3. Instagram Advertising Cost determined using Bid amount 

The bid amount indicates how much you are willing to pay for your ad campaign to be placed in front of the target audience. That is why before you create your ad campaign it’s important to determine how much your company or business is willing to spend on Instagram advertisement.

Earlier we have mentioned that the Instagram bid amount is a bit higher than Facebook so if you are preparing to publish your ad on Instagram and generate leads from the platform then you must be ready to pay the amount to get a higher impression and clicks. 

Sometimes budget also affects the campaign for example if your budget is $300 and your bid amount is $2 per click then your ad will get a maximum of 150 clicks. On the other hand, your budget was $800 then your campaign might have got 400 clicks. So if your content is performing better don’t hesitate to increase your budget. And before making your ad live tray to make it more specific so that your CPC can decrease and you can get more clicks. 

Your budget will determine how long you can run your campaigns and how much you can bid. If you are already familiar with how the Facebook bidding system works then it may sound familiar to you. Not only that but you can also publish the ad on Instagram from the Facebook ad manager. Manual bidding is all about the highest price you will pay and automatic bidding gives Facebook full access to choose your bid to match the best price and offer you the desired result.

To learn more about how automatic and manual bidding work on Facebook then make sure to check our blog on Facebook Advertising: How much Facebook Advertising costs.

4. Instagram Advertising Cost determined using Audience Targeting and competition 

Audience targeting and competition is another important factor that helps marketers and businesses to determine the advertising cost. If you’re trying to target a certain group of audience that is already being targeted by other marketers and advertisers then your ad cost may go high. Remember sometimes due to high competition the advertisement cost fluctuates. 

Well, there is nothing wrong with running your ad in the competitive marketplace with high cost but remember your ad should offer you the desired result that’s why it’s important to focus on audience targeting. Targeting the right set of demographics can offer you better results and ad costs. 

Most of the time marketers and advertisers commit a mistake by targeting a large audience that is not relevant to the product or business in any way. These types of practices not only reduce your ad relevance score but also increases your Instagram advertising cost.

Every niche has different competition when it comes to advertising so if your ad is optimized but still the cost is high then that’s because the competition is high and your competitors might be targeting the audience with the same demographics and interest.

To place your ad on the top you need to outbid your competitors which when the bidding starts there are changes that your CPC can go high but you still try to place your ad on the top. 

Some other important factors that can decide the Instagram advertising cost:  

Genders: When it comes to advertising the gender you are trying to target can play a major role in deciding the cost of the ad. If you are trying to target females then you may find a surge in ad cost because it costs more to target females than males. Platforms like Facebook, Instagram, and Pinterest have more active female users so the chances are high that females will interact with your ad than males. So if you’re targeting females then advertisement cost and budget may rise. 

Holidays: Another important factor that can affect your ad cost is Holidays. During holidays like Christmas, new years and more users are more active on different social media platforms.  So more and more brands try to target their customers by running various ad campaigns and publishing ads. Due to high competition the ad cost, mainly the CPC, started rising. So make sure you are pre-planned with a strong budget during holidays and events. 

Day: The day you are publishing your ad will also play a major role in deciding the advertising cost. Users are more active on Instagram during weekdays so more and more businesses and brands try to run their ads on the same day which gives the right to higher competition and high ad cost. 

There are other factors that can influence Instagram advertising costs and most of them are the same as Facebook. SO if you are looking to know more about those factors you can check the article on  Facebook Advertising: How much Facebook Advertising costs

How can I lower my Instagram advertisement cost?

Before you start creating your Instagram advertisement strategy we would like to highlight some of the important facts about Instagram advertising. Compared to Facebook, Instagram has less user based but the difference in demographics (the type of audience using the platform) make Instagram more value-driven. SO it’s important to know how you can lower the Instagram advertising cost for better and cost-effective results: 

1. Set Clear Objective & Goal

Many brands and businesses lose lots of money on Instagram’s cost per click when they are not aware of what they want to achieve. Yes, you may look to get more sales but that is not an objective that you should plan from the beginning of your campaign. So when it comes to advertising you can start with setting clear objective like 

  • Increase reach and visibility
  • Building brand awareness 
  • Website traffic 
  • Engagement 
  • Encourage user to install apps 
  • Getting more video views 
  • Start conversation 

If you are using Facebook ad manager then each objective and goal defines what the specific campaign is going to be about. Selecting the right objecting can make your ad perform better among the audience which will automatically increase your relevancy score and reduce the ad cost. 

When it comes to selecting the goal you may either aim to increase your bard awareness or consideration (educating your audience) or conversion. By setting a goal you will know what you want to machine and from that point, all your strategy will be focused on achieving those goals. SO make sure you define your goal for better results.  

Creating a targeted campaign 

Every business and brand wants to reach the maximum number of users but that doesn’t mean that you start targeting everyone and end up connecting with no one. To create an optimized campaign you need to ensure that your campaign is targeting the right set of audiences. The best performing campaign is not the one that targets every user on Instagram. But a campaign becomes best only when the targeting is precise and the targeted audience is taking action on the ad. Depending on various factors like 

  • Location
  • Demographics
  • Interest
  • Behavior
  • Custom Audience 

Businesses and brands can define the above factors to make their camping more targeted. By defining your target audience you are not only creating targeted campaigns but also reducing your Instagram cost and increasing your relevancy score. So, by using precise targeting you are reaching the right audience that is actually interested in your product and can make your campaign successful by taking the desired action. 

Use automatic bidding 

If you have recently started using Instagram ads then we recommend you use automatic cost for your campaign. Sometimes setting manual bids does not match with the final bid and result in a low performing campaign. Automatic bid helps you to get the best bid for your campaign and by selecting automatic bid you are enabling Instagram to decide the best bid for your campaign, 

The automatic bid is very helpful mainly for those who don’t have any previous data about the ad campaign. If you still doubt that Instagram can nil your balance then here is the thing if you are targeting the right set of the audience then Instagram will help your campaign by selecting the right bid and make your ad perform better.

Once you have the data then later you can plan to set the manual bid but in the beginning lack of knowledge about bidding can make it difficult for you to select the right bidding amount. So we recommend starting with automatic billing as it can also help you to reduce your Instagram advertising cost. 

Using the landing page instead of the homepage 

Most of the business and brand commit a mistake by directing users from Instagram to their website homepage. These types of actions can make your campaign perform better but don’t offer you the desired results. Because your campaign gaol doesn’t match the intent of your homepage 

Creating a landing page specific to your Instagram ad will help you get the desired result.  Because every user that is taking action on your ad is aware of the purpose or intention behind their action. If they are getting redirected to a similar page that highlights the goal of the ad then users are most likely to take action. 

For example, if the purpose of your ad is to get more conversion by selling winter wear then creating a specific page that highlights only the winter wear section can offer your more results than taking the user to the homepage of your website. Creating a relevant landing page results in more conversions.   

Is it worth paying for advertising on Instagram? 

In short, the answer is Yes, advertising on Instagram can offer you many benefits that include high CTR (click-through rate), advanced targeting options, and many more. Below we are going to list some of the important points that will help you to determine whether you should advertise on Instagram or not?   

Offers advanced targeting option 

If you are a user of Facebook ads or using any other online advertisement platform then you might be familiar with how important it is to target the right set of audiences to get the desired results. Instagram ads come with advanced advertisement options the same as Facebook, using which you can make your ad campaign more specific. 

Using advanced targeting options like demographics, location, interest, and more businesses can make their product reach the right audience that is actually interested in the product and services. Once you are aware of your target market then you can define them based on their location, age group, interests, gender, and more For example if your business is into selling surfboards or boats then you can target a group of people that are interested in beach or water sports-related activities.     

Better Click through rate than any other platform 

Compared to Facebook, Instagram offers a better and higher click-through rate i.e. .08% compared to .06%. On average, you need to pay between $0.40 and $3 for each click. The CTR may look but lower to you but remember you are paying for each click. According to a recent report by Fortune, Instagram ads generate 2.5 times better clicks than any other social media platform. 

Offers higher conversion rate 

Compared to other social media platforms Instagram generates a higher conversion rate that is the reason why it grabs marketers’ an advertiser’s attention. The average conversion rate of Instagram is considered to be 1.08% where other popular social media platforms like Pinterest and Twitter ads get an average conversion rate of 0.54% and 0.74%. 

So from the number, you can easily recognize that Instagram can be the right platform to use. But remember to get high ROI you need to create an optimized campaign. There are times when your campaign does not offer the desired conversion rate, testing, and optimizing your Instagram ad campaign will surely help you to get the desired results. 

Generate higher order value

Instagram ads are not limited to offering higher conversion rates but also help businesses to generate higher order values. A recent study by Shopify states that the average order value for Instagram users is $65. On the other hand, Facebook is the popular social media platform with a maximum number of advertisers whose average order value is less than Instagram, i.e. $55. 

High engagement 

Compared to other social media networks, Instagram offers higher engagement rates. Not only that but the engagement rate is 10 times higher than the parent company Facebook. Instagram offers an engagement rate of 4.7%. The number may look but low but the reality of the more number of followers users have the lower the engagement rate will be.  

If you are advertising on a network that offers a high engagement rate then your ad and posts automatically start performing better among the audience. But remember it’s not only about engagement rate but the success of your post and ad also depend on how engaging your post is for users. If you are targeting the right set of audiences and creating attractive and engaging content then users are more likely to click on your ad, like your post, and perform the desired action.  

Instagram Ads cost Vs Facebook Ads cost 

Compared to other social media platforms Facebook and Instagram are the most popular ones with a maximum number of active users. Day by day organic reach is reducing so it’s essential for brands and businesses to know the advertisement cost for both the platforms. Depending on the results you can identify which platform is better and cost-effective. So let’s take a look at the advertising cost in terms of CPC and CPM:

  • According to a recent study, the average CPC for Instagram ads ranges between $0.20 – $2.00. Whereas the average CPM is about $ 5.14 per 1000 visit.
  • When it comes to Facebook the average CPC is considered $0.80 and the average CPM is about $5.12. 

The above costing is just the estimate based on various data the amount may not be the same for your campaign. Because there are various factors that determine the CPC and CPM rate. One of the most important factors is the target audience. 

If you are targeting an audience that is already being targeted by other marketers and advertised then the ad cost may increase from the general average. It happens because that particular group has more competition compared to others. 

By this, we are not saying that you don’t have to target them but make sure they are relevant to your product and services. Relevance plays a crucial role in determining Instagram advertising cost. No matter whether you are running a Facebook ad or an Instagram ad the quality will play a major role in determining the cost. 

What is better: Instagram ads or Facebook ads?  

As mentioned earlier Facebook is the parent company of Instagram but the recent research by Forrester shows that Instagram has 10X interaction with brands. Many businesses and marketers that are starting with tight budgets often get confused and ask which platform is better for advertisement Facebook ads or Instagram ads. From the performance and reach, we can say Instagram can offer your more desired results. 

Undoubtedly both the platforms add value when it comes to the advertisement but Instagram offers better reach, engagement, and conversion rate than Facebook mostly because people like to spend more time on image-sharing platforms. Both platforms give an equal opportunity to advertise to connect with their potential audience. Below we are going to highlight the three important factors that will help you to determine what is better for your business: 

1. Reach 

The terms reach refers to the total number of users your ad and post can reach. So let’s start with one of the popular and widely used platforms 

Reach on Facebook 

Undoubtedly Facebook is the oldest and most popular social networking site with more than 2.41 billion active users. So you have a good opportunity to target a wide range of audiences who might be interested in your product and services. If your businesses are looking to reach a wider range of audiences then Facebook can be the platform.

Reach on Instagram

After Facebook Instagram is another popular image sharing platform with more than a billion active users which make it best for business and brand to use the platform to reach their potential audience. When it comes to both paid and unpaid promotion Instagram can be best for your business. 

But again the number of active users on Facebook is just double the number of Instagram so when it comes to reaching Facebook ads might give you better results. It also depends on your niche for example if you are targeting the age group between 55-75 then Facebook may give better results than Instagram. 

2. Engagement 

The term engagement refers to how social media users interact with your content and post like clicking on the ad, link, commenting on the post, and more.

Engagement On Facebook 

While it’s true that organic content on Facebook struggles to reach a wide audience and which automatically reduces the engagement rate. But Facebook ads can still offer you great engagement if your content and objective relate to the user you are trying to target.

Engagement on Instagram 

Again when it comes to organic and paid in both cases Instagram beats Facebook as it offers high engagement. That is the reason why it is considered the king of social media when it comes to engagement. Instagram engagement rate is considered to be 10 times higher than Facebook but again the engagement totally depends on what type of content you are sharing. 

Being an image sharing platform you need to offer the best infographics that deliver the objective of publishing the image. With the additional feature, an ecommerce website can also start selling their product directly on Instagram.

3. Demographics 

Demographics can give you a brief idea about the type of audience using the platform. Advertising demographics play a crucial role as it helps you to identify whether your potential customers are using the platform or not mainly when you are planning to run ads. 

Demographics on Facebook 

Recent research by Pew Research tells that 69% of the US adults use Facebook more than 74% of them visit the site on a daily basis. The daily visit on Facebook is higher than on Instagram. Not only that but the female visitor on Facebook is comparatively higher than male. And the use of Facebook among teens has declined in the recent year compared to Instagram and Snapchat. 

Apart from this, there are a lot of demographics that every business and marketers should know before they start advertising on Facebook. 

Demographics on Instagram 

Instagram is mostly used by younger generations with more than 75% of the youngsters between the age group 18-24 years old using Instagram in 2020. Compared to other countries, the US still has the most number of active Instagram users. 116 million is continuing to grow. Not only in the uS but Instagram has a good number of active users in other countries as well. 


By now you might have a clear idea about how effective and productive Instagram can be for your business. And we have also listed some of the factors that determine Instagram advertising cost. So until you get practical and start using an ad manager on your own it will be difficult to determine the Instagram advertising cost. Using the above tips you can lower your ad cost but if you need further help related to Instagram, then you can always reach out to our marketing experts that can help you to create a conversion-centric strategy for your business.  

Frequently Asked Questions: 

1. Is Instagram good for small businesses? 

Instagram is a powerful social media platform that has the full potential to help businesses to reach their potential customers. Mainly for small businesses Instagram can be the best social media platform to help them grow their business online. Using Instagram businesses can reach new customers, convert them into potential leads, encourage them to download their app, visit their website, and many more. nOt only that, but businesses can also leverage Instagram ads to acquire more customers. 

2. Can you sell directly on Instagram? 

Yes, Instagram allows business and individuals to sell their products through posts. You can create a shoppable Instagram page and if you are living in the US then you can enable the product tagging. Apart from that you can add the CTA to bio and link your landing page or your web pages. You Can also ask your user to sell the product by reposting your content or post. So there are many ways you can use Instagram to sell the product. 

3. How do I sell items directly on Instagram? 

If you are looking to start selling items and products on Instagram then you can make use of the below steps: 

  • Convert your current profile to a business profile 
  • The next step is to reach the maximum number of audience by using the right hashtags
  • Make use of Instagram ad to reach potential customers and also gain more organic followers 
  • Use Instagram shopping feature
  • Start partnering with various influencers 

4. Are Instagram better or Facebook ads?

It totally depends on the demographics you are targeting and the niche you are working in. But if you have got appealing and strong visual content that can engage users and encourage them to take action then we recommend going with Instagram. Most of the Instagram users first focus on the visuals than on the caption. So if you create a highly attractive and engaging visual then Instagram has got the full potential to deliver the desired results. 

Because the budget you spent in creating that type of content should offer you the results. On the other hand, if your content is more about the text or written content then Facebook or Twitter can be the based platform to advertise. If you need any help related to social media marketing strategy then you can always reach out to our professionals that can help you to create result-driven strategies

5. Is it worth paying for Instagram ads?

Undoubtedly if you have the budget then it’s worth running ads on Instagram due to higher reach and engagement. Instagram has started to attract tons of small as well as big brands to advertise on their platform so if your reason says your potential customers use Instagram regularly then it will be worth spending money and time on the Instagram advertisement.