While you can buy an Instagram ad click for approximately $1 (or less), time, industry, and target-audience demographics like gender, age, location, and more can change the average and make or break your budget. Use this guide to estimate an Instagram ad budget that gets results, and to learn to keep costs low but effective.
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Instagram Advertising Cost
According to Nanigan’s Instagram Advertising Performance 2017, the average cost-per-click (CPC) of Instagram ads is $0.61. However, Instagram ad costs vary by industry, with some being much more than others. Because Facebook owns Instagram, most reports lump Facebook and Instagram together when discussing ad costs by vertical. However, we can deduce average ad rates for non-listed industries based on average ad cost differences between Facebook and Instagram.
One Instagram-only report by Brand Networks shows CPC (cost-per-click) by industry, but not other key metrics like click-through-rate or cost-per-thousand-impressions. They covered the media and entertainment, financial services, telecommunications and technology industries, and more. To compile the report, they viewed more than 44 billion ad impressions across industries.
Here are the average 2017 CPC costs by industry as observed by Brand Networks:
- The Media and Entertainment 2017 CPM was $6.44.
- The Financial Services 2017 CPM was $5.70.
- The Telco and Tech 2017 CPM was $6.55.
The following is Instagram ad costs from Nanigan’s Instagram Advertising Benchmark Report – Q4 2015, which covers more metrics, including cost per click (CPC) and cost per click-through-rate (CTR), in addition to the CPC, but is not as recent as Brand Network’s. Their more recent reports lump together Facebook and Instagram ad costs data.
Nanigan’s 2015 Instagram Ad Costs by Industry
- Cost per Mille (CPM) – the cost for 1,000 impressions, or ad views
- Click Through Rate (CTR) – percentage of impressions that result in a click
- Cost per Click (CPC) – the cost for one click
Determine Instagram Ad Costs Based on Facebook Ad Costs
Instagram is a platform acquired by Facebook in 2012. As such, Facebook Ads Manager provides Instagram advertising capabilities. In Facebook Ads Manager, advertisers can run ads based on Facebook’s placement recommendations for highest performance, meaning many ads run across both Facebook and Instagram simultaneously. That’s why many Instagram ad cost reports lump together Facebook and Instagram advertising costs with no distinction between the two.
However, we can get a sense of Instagram ad costs from these reports by comparing Facebook ad costs with the average cost differences between Facebook and Instagram. The following are two charts, one showing Facebook ad costs by industry and the second showing Instagram versus Facebook ad costs. From these, we can get a ballpark of Instagram CPM, CTR, and CPC costs by industry.
Percentage Difference in Facebook & Instagram Ad Costs
This report was provided by Nanigan’s Advertising Performance Snapshot for February 2017. Based on the Facebook versus Instagram advertising costs, consumer packaged goods would have a cost-per-mille impressions of $4.89, a click-through-rate of 0.42 percent, and a cost-per-click of $1.01.
“With the exception of Financial Services brands, industries we collected CPM data for maintained steady price efficiency. Though we’re not 100 percent certain of the reason behind Instagram’s steady efficiency, the pricing continuity shows that Instagram is a highly stable, mature advertising ecosystem. The fact that you can now reach over one billion monthly users on the channel is a testament to the scalability of this efficiency and clearly demonstrates the channel’s potential impact for advertisers.”
—Kyle Psaty, VP Marketing, Brand Networks
Why Some Small Businesses Might Pay More for Instagram Ads
Even within industries, many factors can affect whether an Instagram ad costs more or less than the listed averages, including how it is targeted, its placement, and when it runs. For example, Instagram ad placements in the feed are usually more expensive than those placed within an Instagram story, and ads targeted at different age brackets or genders can differ significantly in cost.
Ad Costs by Gender
Targeting one gender more than others could cause businesses to deviate from average Instagram ad costs. AdEspresso by Hootsuite reports that in Q4 2017, Instagram ads targeting males averaged $1.71 in cost per click. Ads targeting females had an average cost-per-click rate of $1.10, $.07 cheaper than male-targeted ads. Male dominated sports apparel companies are likely to be negatively impacted by this difference, while women’s cosmetic brands could reap some rewards.
Ad Costs by Age
Targeting different age brackets on Instagram could significantly affect your ad costs. For example, Instagram ad CPC costs for the 13 to 17 age bracket is $0.27, much cheaper than the average CPC costs to target 25- to 34-year-olds, which averages $1.28.
Here are the average Instagram CPC ad costs by age bracket as of Q4 2017:
- CPC ad costs for ages 13-27 is $0.27.
- CPC ad costs for ages 18-24 is $0.80.
- CPC costs for ages 24-34 is $1.28.
- CPC costs for ages 35-44 is $1.21.
- CPC costs for ages 45-54 is $0.93.
- CPC ad costs for ages 55-64 is $0.91.
- CPC ad costs for ages 65+ is $1.91.
As you set your budget, be sure to consider your industry, target gender, and age bracket. A sports brand targeting male gear for an extreme sport should plan to pay more, as their target demographic could very well fall within the highest-costing age brackets.
Ad Costs by Placement
Instagram ad costs can vary significantly based on ad placement. For example, an ad placed within the Instagram mobile main feed comes with an average CPC cost of $1.20, while an ad placed within Instagram stories, on average, comes with a CPC cost of $.93.
While it might be tempting to simply place all ads within Instagram feeds, don’t make choices based on assumptions. For example, Instagram stories vanish after 24 hours, leaving room for opportunities and pitfalls. Added urgency may mean more clicks, but the fact that it isn’t available for main feed perusers may mean lower engagement. Your best bet is to experiment with ad placements with fewer ad dollars, then allocate more funding to better performing placements.
Local versus National Ad Costs
If you are targeting locally, expect to pay more for ad placements than an ecommerce business targeting audiences nationally or globally. Global brands are competing for a wide range of audiences, so the demand for any one is smaller.
Local brands, however, target the same audience with many other companies vying for their ad attention, both locally and nationally. In the end, this means more demand for fewer ad placements before shared target audiences, which drives up the cost as companies bid against each other for placement. Still, if you are a local brick-and-mortar business, it will likely be worth it to target local people who can take advantage of your offer.
Instagram Ad Cost by Run Times
Because consumer behavior fluctuates by time of year and even day of week, Instagram ad costs vary significantly depending on the time and even on the day of the week they run. To plan your Instagram advertising costs, focus not just on your industry and target demographics, but how run times affect your budget. If you find that your estimated ad costs are higher than your budget can afford, making slight adjustments to ad timing could tip the ROI scales.
Ad Cost by Month
Ad costs fluctuate throughout the year, with peaks based on when they’re most likely to result in increased engagement. AdEspresso reports that 2017’s CPC costs began the year at $0.59 in February, ended the year with a peak in October at $1.43, and remained high through November.
Ad Costs by Weekday
Instagram ad costs also fluctuate by the weekday based on likely engagement, with the most expensive days being Wednesday and Tuesday, respectively, followed by Thursday and Friday. Weekends simply didn’t fare as well, likely because fewer people are online as consistently.
Here are the ad CPC trends by weekday for 2017:
- Saturday, Sunday, and Monday were the least expensive on average.
- Wednesday and Tuesday were the most expensive, respectively.
- Thursday and Friday were tied as the third most expensive days to post ads.
Stretch Your Ad Dollars
As you create your Instagram ad, you will be asked to set demographic targets and define when your ad will run. Knowing how targeting affects pricing can help you stay within your budget while still getting the most out of each ad. You can set your priorities and then use other targeting metrics to offset high costs.
For example, you may know you absolutely need to target women with product ads. Even though targeting women may make your ad dollars go faster, by being flexible on when you post or the age demographics, you can work to offset high gender-based targeting costs to make your ad dollars stretch farther.
Set Your Budget & Bid for the Best Results
Your next step is to set your budget parameters within Facebook Ads Manager. This helps you maintain budget and timing control. For example, by choosing between setting a maximum daily budget and a lifetime budget, you decide whether to maintain a very short leash on your ad dollars or your run times. Then, setting your bid strategy helps you either pay the lowest cost or pay the most predictable costs for results.
Here are the steps and options to set your budget and bid strategy:
1. Set Your Budget
Facebook’s Ad Manager allows you to set your budget in two different ways: a daily maximum budget or a lifetime budget. You can start with as little as $5 a day. Facebook Ads Manager will suggest a minimum ad budget to align with your objectives, ad type, and more. While you cannot reset whether you’ve chosen a lifetime or a daily budget after you’ve started your campaign, you can adjust your budget whenever you’d like.
Retain Daily Spending Control with a Daily Budget
The daily budget allows you to decide how much to spend running your ad on a daily basis. This does not mean you will only spend your set amount on a given day, but that your daily budget will average out to that amount. For example, if you set a daily budget at $11 to increase engagement, Facebook may spend up to 25 percent over your budget on some days to take advantage of higher engagement. It will then use less than $11 on other days for an average $11/day spent.
In addition, in the very beginning of your campaign, Facebook is likely to run your ad more aggressively so it can learn when and with which audiences it best performs. Once it learns best performance conditions, it then slows down and more precisely targets your ads.
Retain Timing Control with a Lifetime Budget
When you set a lifetime budget, you allocate a certain amount to the entirety of the campaign. Then, if you want to, set a start and end date. If you’re running your ad for just a few hours, you’ll set a lifetime budget. Daily budgets require a minimum one-day campaign run. Stay flexible when setting campaign run times and days. Facebook may publish a campaign at a set time but user behaviors (like sharing or commenting) can mean your ad is seen later.
For lifetime budget ads, you can schedule your ad for specific days of the week or specific times of the day. Given our above average CPC for days of the week, this is your chance to keep costs manageable by targeting days that align with your budget. Remember that Tuesdays and Wednesdays tend to be the most expensive days. However, if you leave this up to Facebook, they will allocate to ensure you have the greatest change to achieve your campaign objectives.
Understand Your “Advanced Options”
“Advanced Options” for setting lifetime budgets include setting your ad optimization objective. If you choose “Post Engagement,” for example, Facebook will deliver your ad to the people most likely to like, share, or comment on your post. If you choose “Impressions,” it will deliver your ad so as to be seen as many times as possible. Lastly, if you choose “Daily Unique Reach,” it will deliver your add to as many people as possible, but only to be viewed one time by each person.
You can also choose between “Standard” and “Accelerated” to determine how your ad will be paced. Under Standard pacing, Facebook will ensure your budget isn’t spent too quickly. Choose an “Accelerated” delivery if your promotion must be acted upon quickly.
2. Set Your Bid Strategy
When setting your bidding strategy for ad placements, you can select the target cost bid strategy or the lowest cost bid strategy. This tells Facebook Ads Manager whether you want them to bid to maintain the lowest bidding cost or to maintain a stable cost average per optimization event. Your available choice of optimization events will change based on what ad objective you chose, but may include impressions, link clicks, daily unique reach, and more.
Choose your Optimization for Ad Delivery
Your “Optimization for Ad Delivery” is what you want to set your ad to achieve and is based on the objective you set for your ad in the first step of Facebook Ads Manager’s ad creation process. Objectives for your ad range from brand awareness to reach in the awareness marketing phase; lead generation in the consideration marketing phase; and conversions, catalogue sales, and store visits in the conversion marketing phase.
For example, if you chose “Reach” as your objective for your ad, you will be presented with relevant “Optimization for Ad Delivery” options, including “reach,” which signals Facebook Ads Manager to deliver your ads to the maximum number of people; and “impressions,” which signals Facebook to deliver your ad as many times as possible. But, if you chose “Conversions,” an example of an available “Optimization for Ad Delivery” choice is “landing page views.”
Choose Between a Lowest-Cost or the Target-Cost Bid Strategy
Facebook Ads Manager offers two bid strategies: a lowest-cost bid strategy and a target-cost bid strategy. They are offered to align with two different business goals and budget structures, including if you want more budget control or if you want to spend the minimum you have to.
Lowest-Cost Bid Strategy
The goal with this strategy is to pay the lowest cost per optimization event, even if that cost often fluctuates, while spending your entire set budget. You can set a “bid cap” just to be sure your bids don’t go over an amount you’re not comfortable with. This is right for companies looking to get the most value for their ad dollars at all times.
Target-Cost Bid Strategy
The goal with this strategy is to achieve an average cost per optimization event but to also keep the overall campaign cost within your target budget. This is available only if you’ve chosen lead generation, app install, conversions, or catalogue sales as your ad objective. This is best for companies looking to have a stable, predictable average cost per optimization event, even as you allocate more dollars to high-performing ads or campaigns.
Pro Tips from Instagram Advertisers
1. Don’t Set an End Date
“If you’re looking to eke every cent out of your ad campaign, then make sure you don’t set an end date. This may be obvious for the campaigns you’re going to be running nearly constantly, but is even more important for time-limited campaigns. If you set a budget and an end time for your campaign, then you’re going to end up bidding higher on ads that you don’t need, just to burn out your remaining budget. Instead, let your ad run naturally and cancel it manually when the time comes.”
—Jordan Harling, Chief Digital Strategist, Blinds Direct – UK
2. Target as Broadly as You Can
“I’ve found being hyper-specific, including only targeting very locally on Instagram, drives up ad costs substantially. It works much better to have a wide range of audiences, and you can save a lot by testing and cutting out the more expensive audiences, then adding new ones as your old audiences dry up.”
—Stacy Caprio, Financial Blogger, Fiscal Nerd
3. Test to Achieve Impact
“Testing is key. Instagram gives you a multitude of options when creating your ad, so making sure you test these options is key. For example, since Tiege Hanley is an ecommerce company, our goal with most campaigns is getting conversions. When choosing a ‘call to action’ for the ad, there are a few options that could make sense for us to use, so we tested them. The three options were Learn More, Shop Now, and Get Offer. Even if one of these only has a slight edge over the others, over time it’ll make a huge difference, depending on the advertising budget.”
—Joshua Weilding, Social Media Marketing, Tiege Hanley
If you need help making the most of your Instagram advertising budget, check out our article on the Top 6 Best Instagram Marketing Services.
Frequently Asked Questions (FAQ)
How Much Does Instagram Influencer Marketing Cost?
Instagram influencer marketing costs fluctuate by number of followers and industries. For example, you can expect to pay approximately $133 for a branded post published by influencer with 10,000 to 25,000 followers and $1,405 for an influencer with 1 million or more followers. In addition, you can expect to pay on average $220 for a post from a travel-industry influencer and $134 for a post from a business-industry influencer.
For more information about Instagram influencer marketing costs, read Instagram Influencer Marketing, Ultimate Guide 2018.
Should I Outsource My Instagram Advertising?
Instagram advertising requires a careful analysis of target audiences, competitors, cost fluctuations, timing, placements, and more to make the most of budgets and get the best results. Many small companies don’t have the time or staff expertise to invest for best outcomes. In these cases, finding an Instagram advertising expert who can make the most of advertising budgets and free up small business resources for key operational tasks might be helpful.
If you would like to manage your small business’ Instagram advertising, read our Instagram Advertising: How to Promote Your Small Business guide.
How Much Does It Cost to Put an Ad on Instagram?
You can run an Instagram ad campaign for a budget as small as $5. But what you get out of that campaign varies depending on many factors. For example, you can expect to pay, on average, $1.08 to get one click from target audiences and $5.41, on average, for your ad to be viewed by 1,000 Instagram target-audience users. These averages fluctuate up and down slightly depending on the ad’s target audience, industry, run time, and more.
Bottom Line: Instagram Ads Cost by Industry
Instagram advertising budgets can start as low as $5, but your industry, how you target, when you run your ad, your ad placement, how you set up your budget, and your bidding strategy all affect how far your advertising dollars will take you. This guide can help you make the most of those ad dollars by telling you how your choices affect your results.
If you find Instagram advertising challenging or too time consuming for your small business schedule, don’t be afraid to look for help. On Fiverr, you can find Instagram advertisers with years of expertise at making small business ad dollars go farther and be most effective. Simply search for Instagram marketing expert on Fiverr and choose your freelancer.