How Much Does Instagram Advertising Cost in 2023?

Instagram started as an innocent platform where people share photos of their kids and meals. However, it has now expanded into a full-fledged marketplace with advanced features to appeal to potential customers.

If you're looking to reach a large and engaged audience cost-effectively, look no further than Instagram ads. Although Instagram ad pricing usually depends on a variety of factors, it remains to be a powerful tool for marketers all over the world.

To give you an idea of how much you can expect to pay, Taradel has a price list for popular types of Instagram ads, like single images and carousels.

This article will explore how Instagram ads work, how much they cost, and why your business cannot ignore the power of Instagram ads.

Why Advertise on Instagram?

Instagram advertising can effectively promote your company and its products or services to a large and engaged audience. With over one billion monthly active users, Instagram is one of the world's most popular social media platforms. It offers a range of features and tools that can help businesses of all sizes connect with their customers and grow their brands.

Instagram is a place for creativity and flexibility in how you want to reach your target audience.

One of the key reasons why Instagram advertising is important for your company is that it allows you to reach a highly targeted audience. Instagram's ad targeting tools allow you to show your ads to specific user groups based on location, age, gender, and interests. This means that you can tailor your ads to reach the people who are most likely to be interested in your products or services, which can help increase the effectiveness of your advertising and reduce your overall marketing costs.

Having many options to filter your target audience, Instagram helps you earn quickly and save money in the long run.

Most Instagram users engage with creative content. And you have the opportunity to appeal to them by creating ads that are visually better and more attractive than competitors. You can master the skills of creating eye-catching offers using Instagram ad formats. These include photo ads, video ads, carousel ads, and Instagram stories. You will utilize features and produce a highly personalized ad in whichever format you choose for your ad campaign.

Instagram allows its users, both companies and individuals, to experiment and find what works best with your specific group of potential customers.

An Instagram ad campaign will come to naught, provided you don't analyze metrics. Instagram has become a highly sophisticated platform for monitoring metrics and measuring success. Instagram provides detailed analytics and metrics that can help you understand how your ads perform and what is driving the results you see.

Optimizing your ad campaign becomes easier when you have all the metrics readily available.

How Do Instagram Ads Work?

As on any other social media platform, Instagram runs paid advertisements. As a user scrolls the Instagram feed, ads appear in-between posts or stories. These ads are easy to distinguish as they are marked to let the users know it is promotional content.

Some ads are simply marked as "sponsored" with a brand's name or have a call-to-action (CTA) as a button. Users who click on a CTA are redirected to the landing page.

As you launch Instagram ads, they are visible only to the people you target. You can set your campaign so that it appears only to people that match your preferred location and interests.

Instagram ads are so well implemented that users sometimes may not instantly realize they are indeed ads.

How Much Do Instagram Ads Cost?

Among many factors, an Instagram ad's cost depends on the bidding strategy. Instagram offers two bidding options: cost-per-click (CPC) and cost-per-impression (CPM).

• Cost-per-click - With CPC bidding, you pay each time someone clicks on your ad.
• Cost-per-impression - With CPM bidding, you pay each time your ad is shown to 1,000 people.

The average cost per click ranges between $0.20 and $2.00, while the average Instagram CPM is $5.00 to $10.00 per 1,000 impressions.

Which bidding strategy you choose will depend on your goals and budget.

How Are Instagram Ad Costs Determined?

The cost of an Instagram ad is determined by a combination of factors, the bidding amount, relevance score, target audience, and more. By understanding these factors, businesses can make informed decisions about how much to spend on their Instagram advertising campaigns and maximize their return on investment.

Bid Amount

The bid amount is the amount of money that a business is willing to pay for a particular action, such as a click on their ad or a user following their Instagram account. When running an ad on Instagram, businesses can set a bid amount for their ad.

Manual vs. Automatic Bidding

The bid amount can be set using either a manual or automatic bidding system. With manual bidding, businesses set a specific amount they are willing to pay for each action, such as $1 per click or $0.50 per follow. With automatic bidding, businesses set the maximum amount they are willing to pay. Instagram's algorithm will automatically adjust the bid amount based on factors such as the ad's performance and the competition for ad space.

Relevance Score

The relevance score is a metric used by Instagram to measure the relevance and effectiveness of an ad. A numerical score from 1 to 10 indicates how well an ad resonates with its intended audience. A higher relevance score means that an ad is more relevant and engaging to its audience, while a lower score indicates that the ad is not resonating.

Several various interactions with an ad determine the score. For example, you need to get clicks, downloads, and likes to increase your ad's score. And if you notice your score decreasing, then your ad is being reported or flagged by users.

A high relevance score can improve the visibility and performance of an ad, making it more likely to be shown to users and driving more traffic to a business's website or social media page.

Moreover, higher-rated Instagram ads are likely to win in a bidding war with an industry competitor.

Estimated Action Rate

The estimated action rate is a metric used by Instagram to predict the likelihood that a user will take a particular action on an ad, such as clicking on the ad or following the business's Instagram account. It is expressed as a percentage and is based on factors such as the ad's performance, relevance, and the user's past behavior on the platform.

The estimated action rate can be helpful for businesses when deciding on the bid amount for their ads. By considering the estimated action rate of an ad, businesses can determine how much they are willing to pay for a particular action and set a realistic bid amount.

If Instagram believes your ad will harvest a lot of positive interactions, it will offer a lower CPC.

Target Audience

Instagram allows advertisers to target their ads to specific user groups based on location, age, gender, and interests. The more specific and targeted your ad targeting is, the more likely it is to be successful and the less you will have to pay for it.

Comparison of Instagram Ads vs. Facebook Ads

Meta operates Facebook and Instagram, and both platforms offer powerful advertising options. However, there are some key differences between the two that you should consider before making a decision.

One of the most significant differences between Instagram and Facebook ads is the audience.

• Age. Instagram has a younger (25 to 29 years old), more visually-focused audience, while Facebook has a more diverse audience with a broader range of interests. This means that the ad type you choose and how you present it may need to be different for each platform.

• Format of ads. Another key difference is the format of the ads. Instagram offers a range of ad formats, including photo ads, video ads, carousel ads, and story ads. In contrast, Facebook offers a broader range of options, including photo ads, video ads, carousel ads, collections ads, and instant experience ads.

• Targeting options. In terms of targeting options, both Instagram and Facebook offer a range of options, including location, age, gender, and interests. However, Instagram offers additional options, such as targeting users based on their behaviors and the accounts they follow.

• Ads cost. Another important consideration is the cost of advertising on each platform. In general, Facebook tends to be more expensive than Instagram. However, the actual cost will depend on a variety of factors, such as the type of ad you're running and the audience you're targeting.

Ultimately, the decision between running ads on Instagram or Facebook will depend on your specific goals and target audience.

If you're targeting a younger, more visually-focused audience, Instagram may be the better option. However, if you want to reach a more diverse audience with a broader range of interests, Facebook may be a better choice.

By considering these factors and experimenting with both platforms, you can determine the best fit for your advertising needs.

In some scenarios, equipping your company with both platforms will have you reach out to a bigger pool of customers. Hence, experimenting with a Facebook ad campaign and Instagram ads can bring more results.

How to Lower Instagram Advertising Costs?

Sometimes all it takes is to masterfully create an unbeatable marketing strategy that is fail-proof. Then the ads cost less and generate more profit. Some may consider it an unachievable goal; however, with the right approach and clear goal, Instagram advertising is bound to drive sales and keep your business afloat.

Here are some tips to help you get started:

1. Set a clear and specific goal for your ad campaign. These objectives will help you determine the most effective way to target your audience and will also help you measure the success of your ads.
2. Use relevant and engaging visuals in your ads. Instagram is all about visual content, so make sure your ads stand out by using high-quality images and videos that will grab your audience's attention.
3. Use targeted advertising to reach the right people. Instagram offers a range of targeting options, including location, age, and interests, so you can make sure your ads are being seen by the people who are most likely to be interested in your products or services.
4. Consider using Instagram's automatic bidding system. This allows Instagram to automatically adjust your bid to ensure that your ads are being shown to the right people at the right time, without you having to adjust your bids manually.
5. Use Instagram's conversion tracking to measure the success of your ads. This will help you see how well your ads perform and make any necessary adjustments to improve their effectiveness.

By following these simple tips, you can effectively lower the costs of your Instagram advertising without sacrificing the effectiveness of your ads. With a clear goal, engaging visuals, targeted advertising, and conversion tracking, you can maximize the return on your advertising investment and reach your desired audience on Instagram.

What Kinds of Instagram Ads Should You Consider?

One of the key factors that can affect the cost of Instagram advertising is the type of ad you want to run. Instagram offers several different types of ads, including photos, videos, carousels, and stories.

Each of these ad types has its own unique features and formats, and the cost of running each type of ad can vary and have a different impact on the ads' visibility.

For example, video ads tend to be more expensive than photo ads because they require more resources and typically have higher engagement rates.

Launch Your Instagram Ads Campaign with Taradel

Overall, the cost of advertising on Instagram will vary depending on the following:

• the type of ad you want to run,
• the target audience you want to reach,
• and the budget you set for your ad campaign.

It's hard to give a definitive answer, as the cost can vary greatly depending on the factors discussed above. However, on average, businesses can expect to pay between $0.20 and $2.00 per click or $5.00 to $10.00 per 1,000 impressions. These numbers are just a starting point; your actual costs may be higher or lower depending on your specific campaign.

Online advertising has become effortless thanks to the solutions brought by Taradel.

We run ads; you get the results - as easy as it gets.

Start your Instagram campaign to spread your brand's awareness or convert potential leads to buyers.