Instagram Ad Cost Per Month: How to Budget and Optimize Your Campaigns
But how much does it cost to advertise on Instagram? And how can you make the most of your budget and optimize your campaigns? In this article, I'll share with you everything you need to know about Instagram ad cost per month, based on my experience and the latest data from various sources. I'll also give you some tips and best practices on how to create effective Instagram ads that deliver results.
How Instagram Ads Work
Instagram ads are paid posts or stories that appear on users' feeds or stories. They look like regular Instagram posts, but they have a "Sponsored" label and a call-to-action button that encourages users to take a specific action, such as visiting a website, downloading an app, or shopping online.
Instagram ads are managed through Facebook's Ads Manager, which means you can use the same tools and features that you use for Facebook ads. You can also create Instagram ads from your Facebook Page or your Instagram account.
To set up Instagram ads, you need to choose a campaign objective, a budget, a target audience, an ad placement, and an optimization option. You can also choose from different ad formats, such as photo, video, carousel, collection, or stories.
Campaign Objective
The campaign objective is the goal that you want to achieve with your Instagram ads. There are three main categories of objectives: awareness, consideration, and conversion. Depending on your objective, you can choose from different options, such as:
- Brand awareness: to increase the awareness of your brand among your target audience.
- Reach: to show your ad to as many people as possible in your target audience.
- Traffic: to drive more people to your website or app.
- Engagement: to get more likes, comments, shares, or views on your post or story.
- App installs: to get more people to download your app.
- Video views: to get more people to watch your video.
- Lead generation: to collect leads from people who are interested in your product or service.
- Messages: to get more people to send you messages on Instagram or Facebook Messenger.
- Conversions: to get more people to take a specific action on your website or app, such as making a purchase or signing up for a newsletter.
- Catalog sales: to show products from your catalog to people who are likely to buy them.
- Store traffic: to drive more people to your physical store locations.
Budget
The budget is the amount of money that you are willing to spend on your Instagram ads. You can set a daily budget or a lifetime budget for your campaign. A daily budget is the average amount that you want to spend each day during the campaign period. A lifetime budget is the total amount that you want to spend for the entire duration of the campaign.
You can also set a bid strategy, which is the way that you pay for your ads. You can choose from different options, such as:
- Lowest cost: to get the lowest possible cost per result while spending your entire budget.
- Cost cap: to set a maximum cost per result that you are willing to pay.
- Bid cap: to set a maximum bid that you are willing to pay for each ad impression or auction.
- Target cost: to maintain a stable average cost per result while spending your entire budget.
Audience
The audience is the group of people that you want to show your ads to. You can use Facebook's Audience Network tool to create custom audiences based on criteria such as demographics, interests, behaviors, location, and more. You can also create lookalike audiences based on people who have already interacted with your business on Facebook or Instagram.
Placement
The placement is where you want your ads to appear on Instagram. You can choose from different options, such as:
- Feed: to show your ads in the main feed of users.
- Stories: to show your ads in the stories of users.
- Explore: to show your ads in the Explore tab, where users discover new content.
- Reels: to show your ads in the Reels tab, where users watch short videos.
- IGTV: to show your ads in the IGTV app, where users watch long-form videos.
You can also choose to show your ads on other platforms, such as Facebook, Messenger, or Audience Network.
Optimization
The optimization is how you want Facebook to deliver your ads to your audience. You can choose from different options, such as:
- Impressions: to show your ads as many times as possible to your audience.
- Link clicks: to show your ads to people who are likely to click on your link.
- Landing page views: to show your ads to people who are likely to load your landing page after clicking on your link.
- Daily unique reach: to show your ads to as many people as possible once per day.
- Post engagement: to show your ads to people who are likely to engage with your post.
- Video views: to show your ads to people who are likely to watch your video.
- ThruPlay: to show your ads to people who are likely to watch at least 15 seconds of your video.
- App installs: to show your ads to people who are likely to install your app.
- Lead generation: to show your ads to people who are likely to submit a lead form.
- Conversions: to show your ads to people who are likely to convert on your website or app.
- Catalog sales: to show your ads to people who are likely to buy products from your catalog.
- Store visits: to show your ads to people who are near your store locations and are likely to visit them.
How Much Does It Cost to Advertise on Instagram?
The cost of advertising on Instagram depends on several factors, such as the campaign objective, the budget, the audience, the placement, and the optimization. It also varies depending on the industry, the location, and the competition. Therefore, there is no definitive answer or fixed price for Instagram ads. However, based on various sources and studies, we can get some estimates and averages of how much Instagram ads cost per month.
Average Cost Per Click
The cost per click (CPC) is the amount that you pay for each click on your ad. It is calculated by dividing the total amount spent by the total number of clicks. The CPC is one of the most common metrics used to measure the performance and efficiency of Instagram ads. According to AdEspresso, the average CPC for Instagram ads in 2021 is $0.80. However, this number can vary depending on different factors, such as:
- The industry: some industries have higher or lower CPCs than others. For example, according to WordStream, the average CPC for travel and hospitality is $0.44, while the average CPC for consumer services is $3.08.
- The location: some countries or regions have higher or lower CPCs than others. For example, according to AdEspresso, the average CPC for Canada is $0.50, while the average CPC for Japan is $1.35.
- The placement: some placements have higher or lower CPCs than others. For example, according to AdEspresso, the average CPC for feed ads is $0.76, while the average CPC for stories ads is $0.91.
Average Cost Per Engagement
The cost per engagement (CPE) is the amount that you pay for each engagement on your ad. An engagement can be a like, a comment, a share, a reaction, or a view. It is calculated by dividing the total amount spent by the total number of engagements. The CPE is another common metric used to measure the performance and efficiency of Instagram ads. According to AdEspresso, the average CPE for Instagram ads in 2021 is $0.03. However, this number can also vary depending on different factors, such as:
- The industry: some industries have higher or lower CPEs than others. For example, according to WordStream, the average CPE for education is $0.02, while the average CPE for technology is $0.06.
- The location: some countries or regions have higher or lower CPEs than others. For example, according to AdEspresso, the average CPE for Australia is $0.02, while the average CPE for Brazil is $0.05.
- The placement: some placements have higher or lower CPEs than others. For example, according to AdEspresso, the average CPE for feed ads is $0.03, while the average CPE for stories ads is $0.04.
Average Cost Per Thousand Impressions
The cost per thousand impressions (CPM) is the amount that you pay for every 1,000 impressions of your ad. An impression is when your ad is shown to a user, regardless of whether they click on it or not. It is calculated by multiplying the total amount spent by 1,000 and dividing it by the total number of impressions. The CPM is another common metric used to measure the performance and efficiency of Instagram ads. According to AdEspresso, the average CPM for Instagram ads in 2021 is $5.14. However, this number can also vary depending on different factors, such as:
- The industry: some industries have higher or lower CPMs than others. For example, according to WordStream, the average CPM for retail is $4.15, while the average CPM for finance and insurance is $7.77.
- The location: some countries or regions have higher or lower CPMs than others. For example, according to AdEspresso, the average CPM for the United States is $6.70, while the average CPM for India is $1.09.
- The placement: some placements have higher or lower CPMs than others. For example, according to AdEspresso, the average CPM for feed ads is $4.96, while the average CPM for stories ads is $5.45.
How to Budget and Optimize Your Instagram Ads
Now that you have an idea of how much Instagram ads cost per month, you might be wondering how to budget and optimize your campaigns to get the best results. Here are some tips and best practices that can help you:
Set a realistic and flexible budget
Before you start advertising on Instagram, you need to set a realistic and flexible budget that aligns with your goals and resources. A realistic budget is one that you can afford and that can generate a positive return on investment (ROI). A flexible budget is one that you can adjust and optimize based on your performance and feedback.
To set a realistic and flexible budget, you need to consider several factors, such as:
- Your campaign objective: what do you want to achieve with your Instagram ads? How will you measure your success?
- Your target audience: who do you want to reach with your Instagram ads? How big is your potential market?
- Your industry: what is the average cost and competition in your industry? How can you differentiate yourself from your competitors?
- Your location: where do you want to advertise on Instagram? How does the cost and demand vary across different regions?
- Your ad format: what type of ad do you want to use on Instagram? How does the cost and performance vary across different formats?
- Your ad creative: what kind of content do you want to use on your Instagram ads? How does the quality and relevance affect your cost and results?
Based on these factors, you can estimate how much Instagram ads cost per month for your business and set a daily or lifetime budget accordingly. You can also use Facebook's Budget Optimization tool to automatically distribute your budget across different ad sets based on their performance.
Test and optimize your campaigns
Once you have set a budget for your Instagram ads, you need to test and optimize your campaigns to improve your efficiency and effectiveness. Testing and optimizing means experimenting with different variables and measuring their impact on your results.
To test and optimize your campaigns, you need to follow these steps:
- Create multiple ad variations: create different versions of your ads with different elements, such as headlines, images, videos, captions, call-to-action buttons, etc.
- Run split tests: run split tests or A/B tests to compare two or more ad variations and see which one performs better.
- Analyze the results: analyze the results of your split tests using metrics such as impressions, clicks, conversions, cost per result, etc.
- Scale the winners: scale the winning ad variations by increasing their budget or expanding their audience.
- Kill the losers: kill the losing ad variations by pausing or deleting them.
- Repeat the process: repeat the process regularly to find new opportunities and avoid ad fatigue.
Follow the best practices
Finally, to get the most out of your Instagram ads, you need to follow the best practices that can help you create engaging and effective ads. Here are some of the best practices that you should keep in mind:
- Know your audience: know who your target audience is, what they want, and how they use Instagram. Use the Audience Network tool to create custom or lookalike audiences that match your ideal customers.
- Define your goal: define your campaign objective and align it with your overall marketing strategy. Use the SMART framework to set specific, measurable, achievable, relevant, and time-bound goals.
- Choose the right format: choose the right ad format for your goal and audience. Use photo ads for simple and clear messages, video ads for storytelling and emotion, carousel ads for showcasing multiple products or features, collection ads for creating immersive shopping experiences, or stories ads for capturing attention and creating urgency.
- Use high-quality visuals: use high-quality images or videos that are relevant, appealing, and consistent with your brand identity. Follow the technical specifications and best practices for each ad format. Use tools like Canva or InVideo to create stunning visuals.
- Write compelling copy: write compelling copy that captures your value proposition, highlights your benefits, and includes a clear call-to-action. Use short and simple sentences, emojis, hashtags, and questions to engage your audience. Use tools like Grammarly or Hemingway to improve your writing.
- Optimize your landing page: optimize your landing page for conversions and user experience. Make sure that your landing page matches your ad creative, has a clear headline, a relevant image or video, a compelling offer, a simple form, and a strong call-to-action. Use tools like Unbounce or Instapage to create landing pages.
A Detailed Table Breakdown of Instagram Ad Cost Per Month
To give you a more detailed breakdown of how much Instagram ads cost per month, here is a table that shows the average cost per click (CPC), cost per engagement (CPE), and cost per thousand impressions (CPM) for different industries, locations, and placements, based on data from AdEspresso and WordStream.
$0.03| Industry | Average CPC | Average CPE | Average CPM |
|---|---|---|---|
| Auto | $2.24 | $0.04 | $5.00 |
| B2B | $2.52 | $0.05 | $6.05 |
| Beauty | $1.81 | $0.03 | $4.70 |
| Clothing | $1.45 |
| Location | Average CPC | Average CPE | Average CPM |
|---|---|---|---|
| United States | $1.01 |
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