Many newer and smaller brands falsely assume that they can’t possibly afford to advertise on large social media platforms and compete with more-established brands with huge marketing budgets. However, that’s not necessarily the case! Advertising on Instagram can be cost effective with the right approach, strategy, and expertise.
Advertising on Instagram isn’t cheap, so why should you spend your tightly budgeted marketing dollars on this platform? For starters, Instagram is the fourth most popular social media platform in the world with over one billion users—ranking only after Facebook, YouTube, and WhatsApp.
Instagram offers higher engagement rates compared with other platforms. In 2018, Instagram users spent about 53 minutes on the platform—meaning that they are very engaged with it. This engagement also translates into advertising wherein Instagram ad engagement is ten times higher than on Facebook.
Finally, Instagram is the place to be if you’re looking to reach a specific age or gender demographic—namely Generation Z and Millennials. Instagram is also an ideal platform if you’re looking to reach women since 68% of users are female.
If you’re new to advertising on Instagram, the process can seem confusing and overwhelming. The good news is that MuteSix is here to guide you through it so that you can create amazing advertising campaigns to promote your brand and products.
Essentially, advertising on Instagram involves paying for your content to appear to specific groups of users. You pay for your ads through a bidding model wherein you compete with other brands for the same ad placement. You choose your group of users through targeting mechanisms. From there, users interact with your ad—providing you with leads and, hopefully, conversions.
Now that you have a better understanding of how Instagram advertising works, let’s discuss some of the different advertising formats to choose from so that you can develop an effective and affordable campaign:
Instagram advertising costs vary based on a number of different factors. That being said, the average cost-per-million impressions for an advertising campaign on Instagram is about $6.70. At the same time, the average cost-per-click (CPC) for an advertising campaign on Instagram ranges from $0.20 to $2.00. Clearly, this is still a huge range, so here are some of the different factors that determine the cost of Instagram ads:
Like Facebook, Instagram ads use a bidding auction method when determining ad costs.
The first factor that determines the cost of advertising on Instagram is the bid amount. This refers to the amount that you’re willing to pay to obtain either clicks or impressions on the platform. You can choose between automatic bidding and manual bidding during a bidding war, which will also affect the overall cost of your ad.
For instance, say that you have a budget of $1,000 to spend on Instagram advertising with a bid amount of $0.20—on the lower end of the average spectrum. With this amount, you would be able to obtain 5,000 leads with your campaign. On the other hand, if you have higher bid amounts, you would only be able to obtain 500 leads with the same budget of $1,000.
The second factor that determines the cost of advertising on Instagram is your ad relevance score. This refers to how relevant Instagram thinks your ad will be to its viewers. Instagram wants to please its users, which means that they want to place relevant content that users are actually interested in rather than irrelevant and annoying content.
If your ad is relevant and engaging—leading people to engage with it—your ad relevance score will go up and your ad will gain more placements. On the other hand, if your ad is irrelevant or boring—leading people to hide it—your ad relevance score will go down and your ad won’t be placed as much.
The third factor that determines the cost of advertising on Instagram is the estimated action rates. This refers to how many people Instagram thinks will act on your ad. Instagram wants to promote engaging ads, so it prioritizes ads with high estimated action rates. When your ads are prioritized, you can obtain lower bid amounts.
The fourth factor that determines the cost of advertising on Instagram is competition. Since you’re bidding to obtain ad placements, you’re effectively competing with other brands for the same ad slots. If there are tons of different companies bidding to reach the same subset of users, you’re going to see higher advertising costs. By this logic, retailers will pay more for Instagram ads around Black Friday, Cyber Monday, Christmas, or other large shopping holidays. On the other hand, if you are trying to reach a unique or niche group of users, you’re going to see less competition and, therefore, lower advertising costs.
In addition to the factors listed above, your Instagram advertising costs can also run higher during holidays and events when competition is fiercer. It’s also more expensive to target females than males since this is a more in-demand and competitive demographic.
The day of the week can also affect how much Instagram ads cost. Believe it or not, it’s actually more expensive to advertise on Instagram during the week compared to the weekend since users engage more with the platform on weekdays.
Facebook actually owns Instagram—which means that the two platforms are connected in more ways than one. But how do advertising costs compare with two of the largest social media platforms in the world? Generally speaking, Facebook comes with slightly higher advertising costs than Instagram ad campaigns since it has more users to reach.
The average cost-per-click for Facebook ads is $0.97 compared to $0.20 to $2.00 on Instagram. The average cost-per-million impressions for an advertising campaign on Facebook is $7.19 compared to $6.70 on Instagram.
While advertising on Instagram may not be “cheap,” follow these eight tips to maximize your advertising budget and get the most bang for your buck on this incredibly valuable platform.
For starters, you need to choose the right ad formats and objectives for your Instagram advertising campaign. We’ve already covered ad formats, but Instagram also lets you choose an ad objective of brand awareness, reach, traffic, engagement, lead generation, conversions, app installs, and more.
If you’re a new brand just starting out, focusing on brand awareness would be a smart move. On the other hand, if you’ve already worked to establish your brand and just launched a new line of products, you may want to focus on an objective like traffic, lead generation, or conversions.
Once you have the right ad format and objective, you need to make sure that your campaign is actually reaching the right people. A campaign with the right format and objective won’t be effective if the right people don’t see it! This involves figuring out who your target audience is and then figuring out how to reach them on the platform.
The good news is that Instagram offers tons of advanced targeting mechanisms for you to take advantage of to reach people who want and need your products. You’re able to target people based on location, demographics, interests, and behavior. There are also lookalike audiences, custom audiences, and retargeting available on the platform.
No matter how excited you are to launch your Instagram advertising campaign, it’s still important to test your content beforehand. Choose a small test group based on your target audience and set a limited budget. Then perform A/B or split testing by coming up with several different versions of your ad, showing them to these groups, and monitoring their performance.
Select the best-performing iterations of your ad based on your tests and combine them for a campaign that’s basically guaranteed to be effective.
While it may be tempting to maintain complete and total control over your Instagram advertising campaign from start to finish, this might not be the best approach. Doing things manually can be beneficial in some cases, but when it comes to Instagram, there’s so much technology out there for you to take advantage of.
Specifically, you should consider an automated bidding strategy that allows you to set your maximum bid work and let the algorithm do all the rest. This approach will help you win the best ad placements for the lowest costs.
Even with a great campaign, your advertising efforts can be easily squashed by ineffective landing pages. After spending all that money on your campaign and doing all this work to gain clicks, you definitely don’t want potential leads to be turned off by your landing pages. So in addition to investing in paid advertising, you also need to invest in website design.
Make sure that your landing pages actually make sense for the ad in question. From there, make the page as simple and straightforward as possible with minimal distractions. Include a strong call to action (CTA), helpful information, and an irresistible offer to convert people from potential leads to paying customers through Instagram.
To ensure that your campaign is performing as you intended, you can’t just set it and forget it. Instead, you need to continuously monitor your campaign throughout its life. Specifically, you need to monitor key performance indicators such as click-through rate (CTR), return on ad spend (ROAS), cost per impression (CPM), and cost per conversion (CPA).
At the beginning of your campaign, set ambitious yet realistic goals for what you want to see in your KPIs. If any metric is falling short at any point during the campaign, take action to correct it and get your campaign back on track.
While not technically advertising with Instagram, influencer advertising is incredibly popular on the platform. This method of advertising involves partnering with influential accounts or personalities on the platform to promote your brand and products. You will need to select influencers that make sense for your brand and target audience, as each influencer tends to have their own niche.
For instance, there are fitness influencers, lifestyle influencers, cooking influencers, fashion influencers, parent influencers, pet influencers, and so much more. When choosing your influencer partners, keep in mind that follower numbers aren’t everything. Instead, make sure that the partnership really makes sense for your brand image and personality. We know how overwhelming the world of influencer marketing can be. That’s why an omni-channel digital marketing agency like MuteSix has a dedicated Influencer Marketing team to assist our clients in their Influencer Marketing strategy.
Clearly, a lot of work goes into cost-effective advertising on Instagram. As an entrepreneur, you likely don’t have the time or energy to dedicate to following all of these tips and guidelines to create a successful Instagram campaign all on your own. The good news is that you don’t have to thanks to Instagram ad agencies like MuteSix.
MuteSix is a best-in-class performance marketing agency that helps brands scale with cross-channel, data-driven creative content. We can help you with everything from content to targeting to analytics and everything in between, just as we have helped brands like Morphe, Ring, Honey, and more. So reach out to us today for a complimentary marketing consultation.
While advertising on Instagram may not be cheap, you have to think about your ROI. With this hugely popular and engaging platform, you can definitely gain the leads and conversions you’ve been looking for with an Instagram advertising strategy developed by the marketing experts at MuteSix.
Sources:
Instagram Revenue and Usage Statistics (2021) | Business of Apps
Target and Convert: How to Find Your Target Audience Online | Forbes
Influencer Marketing 101: A Blueprint for Running a Successful Campaign | Entrepreneur