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How much does it cost to advertise on Instagram? by Top Digital Marketing Agency, Absolute Digital

Updated: Oct 20, 2020

by Absolute Digital

Instagram Business has changed the way businesses advertise on social media platforms for the better. Before Instagram, Facebook Advertising has been leading the social media marketing game for years. Facebook targets your audience using the information found on their profile which includes their location, age, job title, interests, and more... Making your ads effective and highly relevant when you narrow down your target audience.

Quick answerThe average Instagram ads CPC (cost-per-click) is around $0.50 – $1.00.

Instagram's feed, however, shows posts from the accounts you follow. 90% of Instagram users follow a business account in 2020, among it's 1 Billion active monthly users. 849 Million of these are what's called advertising audience because they have the potential to buy something they found on Instagram. Now, that's a large audience.

Updated in 2016, Instagram's new algorithm has now curated your feed into a more personalized centre instead of showing you posts based on the timing of which it was posted. This has seen increased in views and conversions for many businesses which reported a better user-experience for many.

The way Instagram shows posts in 2020 is based on 3 things:

  1. Relationship: Posts from accounts that a user already interacts with. For brands and creators, this means that focusing on community engagement is key.

  2. Interest: If users have enjoyed certain types of posts in the past, the algorithm is more likely to show that type of post to them in the future.

  3. Timelines: Posts that are more recent are more likely to be pushed to the top of people’s feeds. This means that posting when your audience is online is crucial.

Types of Instagram Advertising

While Instagram is a relatively simple app to use compared to Facebook, there are several ways you can advertise on Instagram as a business to either gain more presence or convert your audience into potential clients of your brand.

To find out how much does it cost to advertise on Instagram, you first need to understand what are the different types of Instagram Advertising, and what are their purposes. Marketing your business online does not require a fixed budget, but rather a budget that is suitable to achieve your goals. Of course, the more effective your campaign is, the lower your budget needs to be and the higher your conversion rate will be, effectively increasing your ROI.

An example of an effective social media marketing campaign is one that requires the least amount of budget, achieving your desired goals. For example, if your goal is to convert your target audience into e-commerce sales, then you should look at your Impressions, Reach, Conversions, Cost-Per-Lead, and Cost-Per-Sale numbers to strategise and effective Instagram campaign. Your digital marketing agency will be able to make suggestions to improve your current campaign or ideas on how to start a new social media marketing campaign to achieve your goals.

The 2 main feeds on Instagram for businesses to advertise on are Instagram Feed and Instagram Story and here are examples of how you can advertise on Instagram:

1. Photo Ads

A single photo in landscape or square will appear on the user's feed with the tag "Sponsored". Your target audience need not follow your Instagram Account to see your ads and may engage with your post with a like, share, comment, or link to your Instagram account or website if they are interested.

2. Video Ads

Similar to a photo ad, but in a video format. Video ads also have the same features like a photo ad.

3. Carousel Ads

A series or collection of photos or videos that a user can scroll through. These form of ads have the same features of both the photo and video ads as well.

4. Instagram Story Ads

Instagram story ads allow users, and brands, to share self-destructing photos and videos within a 15-second timeframe (per story). Businesses can also advertise on Instagram Stories with a photo or video content which will appear when the user is scrolling through their feed's stories. Your target audience need not follow your Instagram Account to see your ads and may engage with your post by clicking on the link to your Instagram account or website if they are interested.

Costs to Advertise on Instagram

The cost of advertising on Instagram differs on the goals of your social media marketing campaign, the competitiveness of your service/product, as well as your target audience. You see, the average time spent on Instagram in 2020 is roughly 28 minutes per day. Amongst the statistics that have been gathered on Instagram users, this one is by far the most important:

One-third of Instagram users have purchased through the platform on mobile.

The average cost of advertising on Instagram is about $0.50 to $1 per click. Depending on your industry, these costs may vary. You will pay more in highly competitive industries such as retail where Instagram ads cost can reach up to $3.00 per click

AdEspresso found that the average cost-per-click on Instagram is around $0.80 in 2018, and an average Instagram ads cost-per-click is between $0.70 and $1.00. However, there are many factors determining your Instagram ads’ cost. For example, there’s a difference in Instagram CPC prices for various age groups. The highest CPC age groups are 18-24, 25-34, and 35-44-year-olds – the most valuable age groups when it comes to Instagram marketing because they are considered most likely to engage with an Instagram ad or to purchase a product/service from Instagram. AdEspresso’s 2016 analysis on Facebook ads also found that Instagram is often the most expensive ad placement.

If you'd like to understand more about Instagram Advertising, Social Media Marketing, or Digital Marketing in general, you may reach out to a reliable award-winning digital marketing agency, Absolute Digital, at +65 8892 1290 or email us at hello@absolutedigital.sg for more information. Alternatively, there are other helpful articles on how you can increase your business's digital presence with online marketing strategies here.

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