A Detailed Guide to Instagram Ads Cost in 2023



Instagram has close to 1.5 billion monthly active users, with the average social media usage of internet users worldwide amounting to 147 minutes daily. With numbers so high, Instagram Ads can significantly help you expand your reach.

Statistics of most used social media platforms

The cost of advertising on Instagram depends on several factors like demographics, day of the week, and whether your ad campaigns are running when big e-commerce platforms or your competitors are running many promotional activities, to name a few. In addition, the audience you are targeting also determines the cost of your ads, which is why it is critical to understand your target audience apart from the Instagram platform. 

In this blog, we will cover all essential tips and tricks that will help you master your Instagram Marketing game and focus on how to maximize the cost-efficiency of your Instagram Ads. 

Related Article: Tips for Creating Engaging Facebook Ad Copy That Converts

Why Are Instagram Ads Important to Your Business?

According to a Facebook-commissioned online survey in Oct-Nov 2020, 44% of people strongly associate Instagram with discovering local and small brands. So, if you are a Small Business Owner, using Instagram to engage with your potential target audience is the best thing you can do. 

You can easily connect with your customers and leads by posting videos, images and stories about what your business does.You can also use that content to build advertising that will help you get discovered by people who can eventually become your loyal paying customers. 

Here are a few pro tips to excite your customers and boost sales on Instagram:

  • TIP 1: Establish trust with your community by using Instagram Direct to address comments or queries. You can easily provide excellent customer service while saving time by automating FAQ responses. Remember, additional sales opportunities may result from a positive customer experience!
  • TIP 2: Do you sell a product or service that prospective customers might be curious to learn more about? Advertisements that drive customers to WhatsApp or Instagram Direct provide more value to your potential leads. You can raise customer satisfaction by assisting clients with their purchases and offering a consultative experience by individually responding to their inquiries.
  • TIP 3: By having your own shop on Instagram, you can keep your current customers and followers interested. Users can browse and buy things without leaving the app with Instagram Shopping. Create collections and  make it easier for your consumers to find items they will love and buy.
  • TIP 4: Upload your Product Catalog and use Product Tags in your feed, stories, reels and ads so people can discover your products in different formats.
  • TIP 5:  Pay attention to user-generated content  to learn which products are popular with your audience. Utilize that user-generated content to create your product catalogs to save time. Once the product receives user approval, categorize it and give your buyers information about it in the description that will aid them in making a purchasing decision.

Why Instagram Ad Charges Are Worth Your Money

Better CTRs (Click-Through Rates)

Though you may split your ad budget among different social media channels like Tiktok, Google, and other platforms. Instagram tends to give the highest results in terms of CTRs. CTR is the number of clicks that your ad receives divided by the number of times your ad is shown: Clicks ÷ Impressions = CTR. 

Formula for calculating CTR for Instagram Ads

For example, if you had 5 clicks and 100 impressions, then your CTR would be 5%.

According to a Fortune survey, Instagram advertising has a CTR that is 2.5 times higher than other social media channels.

Instagram ads also contribute to increased sales with higher order values. According to a recent Shopify study, the average order value for Instagram users is $65. Despite the fact that Facebook accounts for a sizable portion of social media sales, its average order value is $55, which is $10 less than Instagram.

Instagram Ads Generate The Most Engagement.

According to a Forrester analysis, Instagram has high engagement rates when compared to other networks. Instagram gives ten times the engagement when compared to Facebook.

When you have people who are involved with a network, your business might gain from advertising. You can encourage people to click on your ad, like your page, or buy your goods if you make ads that target the right people.

Instagram Ads Have High Conversion Rates.

Instagram ads not only generate greater order values, but they also have higher conversion rates than other networks. Instagram advertising has a conversion rate of 1.08% on average. In comparison, the average conversion rate for Pinterest advertisements is 0.54%, while Twitter ads have a conversion rate of 0.77%.

Instagram Stories: A Powerful Feature For Your Business

Instagram Stories are used by 500 million accounts, according to Instagram. And businesses account for one-third of the most popular Stories. 

Furthermore, one out of every five Stories receives a direct message from its visitors. Stories are full-screen mobile experiences that are available on practically every social network. Your marketing plan should include an Instagram Stories strategy because users enjoy and actively seek them out.

Instagram Stories provides many great alternatives for businesses, including

  • The ability to include a link to your website.
  • Shopping stickers are available to tag things in Stories.
  • The question, quiz, and message stickers encourage customer interaction.
  • The capacity to go live and interact live with customers.

Instagram Is Pushing Video Conversion

The internet is transitioning to video. Instagram in response to the overwhelming success of TikTok, are prioritizing commerce and video sharing. This is great news for all small and medium companies. 

Instagram Ads Provide Advanced Targeting Options

Instagram, like Facebook, offers powerful targeting possibilities for your business. You can increase the return of your ads by using specific targeting choices, which range from location to behaviors and interests. For example, instead of targeting people interested in jewelry, you can specifically target those interested in rings or necklaces.

What Factors Influence Instagram Ad Prices?

Bid Amount

How much you spend on an Instagram ad campaign depends on your bid price. You must decide on the budget that you are prepared to spend on acquiring leads. The value of your bid also influences the amount you pay.

Due to the increased bid prices on Instagram, you should be prepared to pay more for clicks and impressions. If your bid is set at $2 per click and your budget is $500, your ad receives only 250 clicks. However, 500 clicks are obtained with a $1,000 expenditure at $2 CPC. In the identical example, a bid amount of $0.50 would enable even more clicks for the same budget amount.

Estimated Action Rates

Your Instagram ad cost also depends on the projected action rates. Instagram claims that the rate depends on the likelihood that users will respond to your advertisement. They mostly want to learn how likely it is that your audience will interact with your advertisement. These interactions involve actions like clicking and buying.

Instagram wants to spread advertisements that they believe people will connect and engage with. Your ad will be prioritized if Instagram thinks that more users will interact with it. As a result, you will receive a reduced offer, which will enable you to generate more leads and conversions.


Your competitors will always have an effect on the cost of your Instagram advertisements. Know that they – your competitors are also attempting to reach the same demographic as you.

A bidding war may develop if other people place bids to target the same audience. To win the top slot, companies will have to outbid each other. Trying to outbid your competitor can lead to increased CPC, which is not ideal.

There are a couple of other elements that affect the ad cost as well, such as 

  • Target Market: The market you want to reach determines the cost of your Instagram ad. Because Instagram has fewer businesses than people, it is more expensive for B2B enterprises to place advertising. Some industries, such as clothes, are more expensive due to intense rivalry.
  • Gender: Female advertising costs more than male advertising. Females are more inclined to interact and engage on Instagram; therefore, reaching out to them will cost you more.
  • The day of the week: Instagram users interact more on weekdays than on weekends. This implies that running an ad on a Thursday will cost you more than running an ad on a Saturday.
  • Holidays and Events: There is a lot of competition throughout the holiday season, especially around Christmas, Thanksgiving, and New Year. Many businesses are fighting to showcase themselves to potential audiences and drive their sales. This usually drives up CPC during this time. You need to be prepared to budget for holidays and events around the year additionally.

Even though Instagram ads are more expensive, advertisers have control over how their expenditures are allocated. You can pick between a daily budget, which limits the amount spent every day, and a lifetime budget, which allows you to schedule your advertising for a defined period before the budget runs out.

So How Much Does It Actually Cost to Advertise on Instagram

We have categorized the actual cost it takes to advertise on Instagram and compared them with other popular social media platforms such as Facebook, Twitter, TikTok etc., according to

  • Minimum Ad Budget
  • Average CPC – Cost Per Click
  • Average CPM – Cost Per Mille (thousand)

Minimum Ad Budget

Several social media networks have a minimum daily spending requirement for social media advertising. The required budget varies according to the platform; some base it on the type of bids, such as impressions, clicks, likes, or views.

But most have a very modest minimum spending requirement. You can use the price below as a reference for the minimum spending required for the various platforms for each bid type.

Instagram$1 per day for impressions.$5 per day for clicks, likes, or views.$40 per day for app installs or offer claims
Facebook$1 per day for impressions.$5 per day for clicks, likes, or views.$40 per day for app installs or offer claims.
TwitterNo minimum ad spending.
TikTok$50 per day for campaigns, $20 per day for ad groups.
Youtube$10 per day.
LinkedIn$2 per click.$10 per day.
Pinterest$2.00 for impressions.$0.10 for clicks.

Average CPC – Cost Per Click 

Your company may utilize a variety of bidding strategies with social media advertising, such as cost per like (CPL) or cost per view (CPV). Cost-per-click, or CPC, is a common bidding option. Because of this, many businesses look at CPC first when evaluating the price of social media advertising. Examine the typical CPC for the social media sites used in your ad campaign using the graphic below:

Average Cost Per Click for popular Social Media Platforms

Average CPM for Social Media Ads

Cost per Mille or Cost per thousand impressions is another bidding option available on the biggest social media networks. With this bidding option, your organization prioritizes ad views above ad clicks. Because you’re paying per 1000 impressions rather than a single click, the typical cost for CPM is often higher. In the graphic below, you can see a breakdown of social media advertising expenses by CPM:

Average Cost per Impression for each social media platform

Maximizing Your Instagram Ad Performance

To make the most of your marketing budget, dedicate money to ads and campaigns only if they will eventually help increase Sales and most importantly Profits. 

Put your money behind posts and content that you already know, have performed well organically. Test everything to see what works the best, and dedicate most of your ad spend to that.

Make sure to track and measure your ads performance and take note of anything that didn’t do as well as you’d hoped. Here are a few ways by which you can increase your Instagram Ads performance.

Use Precise Targeting

When creating Instagram advertising, the idea is to target people who are likely to be interested in your products or services. To reach your target audience, use precision targeting. Instagram allows you to target users by

  • Habits: When someone takes specific actions to browse your website, you can target them based on those behaviors.
  • Interests: As people communicate on Instagram, their interests become clear. You may target people directly depending on what they enjoy, whether it’s design or technology.
  • Demographic: Demographic information is the most commonly used approach to target leads. Race, gender, and age are among the details provided.
  • Location: People might be targeted based on their geographic location. It might range from as big as a country to as narrow as a postal code.

You will reach more people who are interested in your products and services if you use precision targeting. This implies your ad copy will become even more relevant to them, assisting you in achieving a higher ad rank and a cheaper CPC. This would also result in an increase in sales, which would help cover the campaign’s costs. Visit our blog to learn more about precisely targeting a market.

Set Your Ads Goals

Setting goals will assist you in staying focused on what you want to achieve with your advertisement. There are three key objectives you should strive towards with your Instagram Ads:

  • Awareness: Through an awareness campaign, you should focus on increasing awareness of your company, brand, product, app, or service. You want to draw attention to it and make people aware of it. You will focus on conducting a CPM campaign to achieve this goal.
  • Consideration: If consideration is your goal, you will concentrate more on educating your audience. You’ll want to provide more convincing facts to your audience in order to persuade them to convert. To that aim, you will concentrate on obtaining clicks, views, and leads.
  • Conversion: Business owners want their customers to buy their products, download their apps, or use their services. If the campaign’s aim is conversions, you’ll want to have a convincing copy that entices your audience to buy your product or use your services immediately.

Make Useful Landing Pages

The majority of businesses make the error of redirecting leads to their home page when they click on their Instagram ad. This does not encourage engagement because users are not sent to an ad-relevant landing page. Users are more likely to convert if they are directed straight to the product they see in the ad. Customers are more likely to convert when they are directed straight to the product. This will assist you in recouping the costs of executing your campaign.

Ads Testing

Test your ads to ensure that you are releasing the best version available. Testing your ad allows you to create a more relevant ad copy. Relevant ad copy means a higher ad space, which equals a reduced CPC.

Choosing an Automatic Bidding System

If you’ve never utilized Instagram advertising previously, employing automated bidding for your campaign might be advantageous. It’s a simple approach for you to find the best bid for your campaign.

Automatic bidding is the best option if you don’t have any past data to notify you of a decent CPC to establish for your campaign. This will assist you in determining the bid amount that is appropriate for your campaign.

By implementing automatic bidding, you may keep your organization from overspending to run an ad. The lack of past data might make determining the appropriate bid amount difficult. You could bid more than necessary. Automatic bidding is an excellent approach to reduce the cost of your Instagram ads.

How Can AdVize Maximize Your Instagram Ads Performance?

As you now know, running Instagram Ads can really be beneficial for your business, but there are a lot of technical functions that you should know. If you think that just creating an ad copy and selecting your audience is going to bring in a large number of traffic or conversions, then you are wrong.

You have to select the right target audience, create an engaging, visually appealing copy that connects with your audience, optimize your budget, and set goals and KPIs at the campaign and ad set level.

Track and measure the ads’ performance over time and take optimization decisions to increase or decrease ad budget, change targeting parameters or ultimately stop underperforming ads. As you can see, it is a lengthy and complex process that cannot be mastered in a couple of days or months.

In fact, even seasoned marketers sometimes make mistakes that simply result in the loss of the entire budget. AdVize is an AI&ML-based tool that learns continuously to ensure faster and smarter ad optimizations. Easily optimize the performance of your ads and maximize your ROAS instantly. Make data-driven decisions based on actionable directions and leave the guesswork out of your social media advertising strategy.

Join our waitlist and get 80% off on the tool that can help you invest in winning ads and scale your business.

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