Instagram Ads Cost 2022: How to Plan Your Budget and Maximize Your ROI

By Cepy 8/19/2023 Post a Comment

Hi Online Friends,

If you're looking for a way to grow your brand awareness, reach new customers, and increase your sales, you might want to consider advertising on Instagram. Instagram is one of the most popular and engaging social media platforms in the world, with over 1.4 billion monthly active users and 500 million daily Stories users. It's also a powerful advertising platform, with a variety of ad formats, targeting options, and creative possibilities.

But how much does it cost to advertise on Instagram in 2022? And how can you make the most of your budget and optimize your campaigns for the best results? In this article, I'll answer these questions and more, based on my experience as an Instagram marketer and the latest data from industry sources. I'll also share some tips and best practices on how to plan your Instagram ads budget, choose the right ad objectives, placements, and formats, and measure your performance and ROI.

How Instagram Ads Work

What are Instagram Ads?

Instagram ads are paid posts or Stories that appear on users' feeds or Stories tabs. They look like regular organic posts or Stories, except they have a "Sponsored" label and a call-to-action button. They can also appear on other places on Instagram, such as Explore, Reels, IGTV, and Shopping.

Instagram ads are run through Facebook's Ads Manager, which means you can use the same tools and features that you use for Facebook ads. You can also run your ads on both Facebook and Instagram at the same time, or choose specific placements for each platform.

What are the Benefits of Instagram Ads?

Instagram ads offer many benefits for advertisers, such as:

- High reach: You can access a large and diverse audience of over 1.4 billion people worldwide, across different ages, genders, interests, and locations.- High engagement: You can capture users' attention with visually appealing and immersive content that blends in with their feeds or Stories. According to Facebook, Instagram ads have around a 0.22% click-through rate (CTR) for in-feed posts and around 0.33% for Reels and Stories.- High conversion: You can drive users to take action with clear and compelling call-to-action buttons, such as "Shop Now", "Learn More", or "Download". According to Facebook, Instagram ads have an average cost per action (CPA) of $5.68 across all industries.- High creativity: You can showcase your brand personality and story with different ad formats, such as photos, videos, carousels, collections, Stories, Reels, IGTV, Shopping, and more. You can also use interactive features, such as polls, stickers, filters, effects, music, and sound.- High targeting: You can reach your ideal customers with advanced targeting options based on demographics, behaviors, interests, locations, custom audiences, lookalike audiences, and more. You can also use retargeting to re-engage users who have already interacted with your brand or website.- High measurement: You can track and optimize your campaigns with real-time data and insights from Facebook's Ads Manager. You can also use tools like Facebook Pixel, Facebook Analytics, and Facebook Attribution to measure your conversions and ROI across different devices and channels.

How Much Do Instagram Ads Cost in 2022?

What Factors Affect Instagram Ad Costs?

The cost of Instagram ads depends on several factors, such as:

- Your campaign objective: This is the goal you want to achieve with your ads, such as brand awareness, reach, traffic, engagement, app installs, video views,conversions,lead generation,or messages. Different objectives have different costs depending on the level of competition and demand in the market.- Your bid strategy: This is the amount you're willing to pay for each result or impression from your ads. You can choose between lowest cost (which automatically optimizes your bid to get the most results at the lowest cost), target cost (which maintains a stable average cost per result), or cost cap (which sets a maximum limit on how much you're willing to pay per result).- Your target audience: This is the group of people you want to reach with your ads based on their demographics,behaviors,interests,locations,custom audiences,lookalike audiences,and more. The more specific and relevant your audience is,the lower your costs will be.- Your ad placement: This is where your ads appear on Instagram or Facebook,such as feed,Stories,Explore,Reels,IGTV,Shopping,or other apps and websites in the Audience Network. Different placements have different costs depending on the level of visibility and engagement they offer.- Your ad quality and relevance: This is how well your ads match the preferences and expectations of your target audience. Facebook assigns a relevance score to each ad based on the positive and negative feedback it receives from users, such as likes, comments, shares, clicks, saves, views, or hides, reports, or skips. The higher your relevance score is, the lower your costs will be.- Your ad schedule: This is when your ads run during the day or week. You can choose between running your ads continuously (which automatically optimizes your delivery to get the most results at the lowest cost) or running your ads on a schedule (which allows you to specify the hours and days you want your ads to run). Different times and days have different costs depending on the level of competition and demand in the market.

What are the Average Instagram Ad Costs in 2022?

According to various sources, the average Instagram ad costs in 2022 are as follows:

- Average cost per click (CPC): This is the amount you pay for each click on your ad. According to WordStream, the average CPC for Instagram ads in 2022 is $1.33, which is slightly higher than the average CPC for Facebook ads ($1.28). However, this can vary depending on your industry, location, and ad placement. For example, according to Revealbot, the average CPC for Instagram feed ads in July 2021 in the United States was $1.28, while the average CPC for Instagram Stories ads was $0.91.- Average cost per engagement (CPE): This is the amount you pay for each engagement on your ad, such as likes, comments, shares, saves, or views. According to Influencer Marketing Hub, the average CPE for Instagram ads in 2022 is $0.96, which is slightly lower than the average CPE for Facebook ads ($0.97). However, this can vary depending on your industry, location, and ad placement. For example, according to Revealbot, the average CPE for Instagram feed ads in July 2021 in the United States was $0.26, while the average CPE for Instagram Stories ads was $0.15.- Average cost per thousand impressions (CPM): This is the amount you pay for every 1,000 impressions (or views) of your ad. According to HubSpot, the average CPM for Instagram ads in 2022 is $7.91, which is slightly higher than the average CPM for Facebook ads ($7.19). However, this can vary depending on your industry, location, and ad placement. For example, according to Revealbot, the average CPM for Instagram feed ads in July 2021 in the United States was $5.12,while the average CPM for Instagram Stories ads was $4.52.

How to Plan Your Instagram Ads Budget in 2022

How to Set Your Campaign Budget

The first step to plan your Instagram ads budget is to set your campaign budget. This is the amount you're willing to spend in total for a single campaign over its lifetime or per day.

To set your campaign budget,you need to consider:

To calculate your campaign budget,you can use this formula:

Campaign budget = Expected results x Target cost per result x Campaign duration

For example,if you want to run a traffic campaign with a target cost per click of $1 and an expected click-through rate of 1% for 30 days,you can calculate your campaign budget as follows:

Campaign budget = (Impressions x0.01) x $1 x 30

Assuming you want to reach 100,000 people per day, your campaign budget would be:

Campaign budget = (100,000 x 0.01) x $1 x 30

Campaign budget = $30,000

How to Allocate Your Budget Across Ad Sets and Ads

The next step to plan your Instagram ads budget is to allocate your budget across ad sets and ads. An ad set is a group of ads that share the same target audience, ad placement, and optimization goal. An ad is a single creative unit that appears on users' feeds or Stories.

To allocate your budget across ad sets and ads, you need to consider:

- Your target audience: This is the group of people you want to reach with your ads based on their demographics, behaviors, interests, locations, custom audiences, lookalike audiences, and more. You can create multiple ad sets with different audiences to test which ones perform better and allocate more budget to them.- Your ad placement: This is where your ads appear on Instagram or Facebook, such as feed, Stories, Explore, Reels, IGTV, Shopping, or other apps and websites in the Audience Network. You can choose between automatic placements (which let Facebook decide where to show your ads for the best results) or manual placements (which let you select specific placements for each ad set). You can also create multiple ad sets with different placements to test which ones perform better and allocate more budget to them.- Your ad format: This is the type of creative unit you use for your ads, such as photos, videos, carousels, collections, Stories, Reels, IGTV, Shopping, and more. You can create multiple ads with different formats within each ad set to test which ones perform better and allocate more budget to them.

To allocate your budget across ad sets and ads,you can use Facebook's budget optimization feature or manual budget control.

Budget optimization is a feature that automatically distributes your campaign budget across your ad sets based on their performance and potential. It helps you get the most results from your budget without having to manually adjust it. You can turn on budget optimization at the campaign level and set a daily or lifetime budget for your campaign.

Manual budget control is a feature that lets you set a specific budget for each ad set and ad within your campaign. It gives you more control over how much you spend on each audience,placement,and format. You can turn off budget optimization at the campaign level and set a daily or lifetime budget for each ad set and ad.

How to Optimize Your Instagram Ads for the Best Results

How to Choose the Right Campaign Objective

The first step to optimize your Instagram ads for the best results is to choose the right campaign objective. This is the goal you want to achieve with your ads,such as brand awareness,reach,traffic,engagement,app installs,video views,conversions,lead generation,or messages.

To choose the right campaign objective,you need to consider:

- Your marketing funnel: This is the journey your customers take from becoming aware of your brand to making a purchase or taking another action. Different campaign objectives correspond to different stages of the funnel,such as awareness,consideration,or conversion. You should choose a campaign objective that matches the stage of the funnel you want to target with your ads.- Your key performance indicators (KPIs): These are the metrics that measure how well you're achieving your campaign objective,such as impressions,reach,clicks,engagements,app installs,video views,conversions,leads,or messages. You should choose a campaign objective that aligns with the KPIs you want to track and improve.

How to Choose the Right Target Audience

The second step to optimize your Instagram ads for the best results is to choose the right target audience. This is the group of people you want to reach with your ads based on their demographics,behaviors,interests,locations,custom audiences,lookalike audiences,and more.

To choose the right target audience,you need to consider:

- Your buyer persona: This is a semi-fictional representation of your ideal customer based on market research and data from your existing customers. It describes their demographics,behaviors,interests,pain points,goals,and motivations. You should use your buyer persona as a guide to create relevant and specific audiences for your ads.- Your audience network: This is a collection of audiences that are related to your existing customers or prospects based on their similarities or connections. It includes custom audiences (which are audiences created from your own data sources),lookalike audiences (which are audiences that resemble your custom audiences),and interest-based audiences (which are audiences that share common interests with your custom audiences). You should use your audience network to expand your reach and find new customers for your ads.

How to Choose the Right Ad Placement

The third step to optimize your Instagram ads for the best results is to choose the right ad placement. This is where your ads appear on Instagram or Facebook,such as feed,Stories,Explore,Reels,IGTV,Shopping,or other apps and websites in the Audience Network.

To choose the right ad placement,you need to consider:

- Your campaign objective: This is the goal you want to achieve with your ads,such as brand awareness,reach,traffic,engagement,app installs,video views,conversions,lead generation,or messages. Different ad placements have different strengths and weaknesses for different campaign objectives. For example, feed ads are good for driving traffic and conversions, while Stories ads are good for driving brand awareness and engagement.- Your ad format: This is the type of creative unit you use for your ads, such as photos, videos, carousels, collections, Stories, Reels, IGTV, Shopping, and more. Different ad formats are compatible with different ad placements. For example, Reels ads can only appear on Reels, while Shopping ads can appear on feed, Stories, Explore, or Shopping.- Your target audience: This is the group of people you want to reach with your ads based on their demographics, behaviors, interests, locations, custom audiences, lookalike audiences, and more. Different ad placements have different levels of popularity and engagement among different audiences. For example, Stories ads are more popular and engaging among younger audiences, while feed ads are more popular and engaging among older audiences.

How to Choose the Right Ad Format

The fourth step to optimize your Instagram ads for the best results is to choose the right ad format. This is the type of creative unit you use for your ads, such as photos, videos, carousels, collections, Stories, Reels, IGTV, Shopping, and more.

To choose the right ad format,you need to consider:

- Your campaign objective: This is the goal you want to achieve with your ads,such as brand awareness,reach,traffic,engagement,app installs,video views,conversions,lead generation,or messages. Different ad formats have different advantages and disadvantages for different campaign objectives. For example, video ads are good for driving brand awareness and video views, while carousel ads are good for driving traffic and conversions.- Your ad placement: This is where your ads appear on Instagram or Facebook,such as feed,Stories,Explore,Reels,IGTV,Shopping,or other apps and websites in the Audience Network. Different ad formats are compatible with different ad placements. For example, Reels ads can only appear on Reels, while Shopping ads can appear on feed, Stories, Explore, or Shopping.- Your creative strategy: This is how you use your ad format to showcase your brand personality and story. Different ad formats offer different creative possibilities and limitations. For example, photo ads are simple and straightforward, while collection ads are complex and immersive. You should choose an ad format that suits your creative strategy and delivers your message effectively.

How to Measure Your Instagram Ads Performance and ROI

How to Track Your Instagram Ads Metrics

The first step to measure your Instagram ads performance and ROI is to track your Instagram ads metrics. These are the data points that show how well your ads are performing in terms of reach, impressions, clicks, engagements, app installs, video views, conversions, leads, messages, cost per result, relevance score, frequency, and more.

To track your Instagram ads metrics,you can use:

- Facebook's Ads Manager: This is the tool that lets you create and manage your Instagram ads campaigns. It also lets you monitor and analyze your campaigns' performance and results in real-time. You can use Ads Manager to view various metrics at the campaign, ad set, or ad level. You can also use filters, breakdowns, charts

Google Ads Guide