Instagram is gaining popularity among businesses as a tool for customer targeting. As an online marketing agency, we are dealing more and more with Instagram Ads in our daily work. For this reason, in the following article we would like to take a closer look at Instagram advertising and costs, as additional reach in the social media network is not for free. Here we go!
Instagram Advertising costs
When it comes to PPC advertising, there is no doubt that it implies costs. Nevertheless, we prefer using the term investment, provided that it is approached correctly. Below you can find out why spending on Instagram Ads is always an investment for customer targeting.
- Performance measurement. The Instagram network enables us to evaluate the performance of campaigns extensively and permanently. As a result, we can apply
- Leads. Thanks to the detailed performance overview that the Instagram network offers us, we can quickly and easily determine the costs for a contact request. This enables us to compare the costs of Instagram advertising to other online marketing channels.
- Lookalike Audiences. A particularly interesting aspect of Instagram advertising is the numerous targeting options. With Lookalike Audiences for example, it is possible to create statistical twins of desired groups, such as existing customers which can then be targeted with Instagram advertising.
- Overview. Instagram ads offer the great advantage of continuously monitoring performance. You can react quickly and efficiently to negative changes and your budget is always used optimally.
Instagram Advertising Budget Controlling
Instagram offers advertisers two options for setting the budget. On the one hand, the daily budget is intended for long-term campaigns and spends a fixed amount every day. Second, the term budget has a start and end date and a specified amount to be spent over that period. With the right setting options, you can have full control over all costs of Instagram ads, without the risk of unplanned spending.
When it comes to billing, Instagram uses 2 models:
CPC (Cost per Click) billing model
With this billing model, you only pay if a user actually clicks on one of your Instagram ads. This model is particularly suitable for ads that are geared towards interaction. With the CPC model, the advertiser sets a maximum CPC at the beginning, to which the placements are then adjusted in a bidding process. On average, the broader the target group, the cheaper the click prices.
CPM (Cost per Mille) billing model
The so-called TCP (thousand contact price) is suitable for ads that target reach and impressions. In this case, you don’t pay for the individual click, but for impressions. Like the CPC model, the CPM model is also adjusted in the bidding process.
The minimum cost per click is USD 0.01. However, the advertising space is not guaranteed and the ad is rarely displayed. On average, the price per click is 0.5 euros, although the price can be much lower or significantly higher.
An advertisement in a well-known daily newspaper can cost up to several thousand euros, while most people will not even have a general interest in the advertised product. On Instagram instead, ads are displayed only to people who have a high probability of becoming potential customers, making you pay only when clicks are actually generated.
Instagram Ad costs: Is it worth it for me?
As a digital marketing agency, the most common question that we get when it comes to Instagram advertising is profitability. Are Instagram Ads profitable for me? A general answer cannot be provided. It always depends on what goals the advertiser is pursuing with their campaigns and what benchmarks they use as a guide. For example, a branding campaign will achieve completely different values than a retargeting campaign, which aims to generate as many sales as possible.
The big advantage of Instagram ads is that you can decide what goals you want to achieve. The performance of the ads is based on the target you set and is optimized by Instagram accordingly. Whether impressions or conversions, you only pay for the event you choose.
Conclusion: Instagram advertising with manageable costs
Spending on Instagram advertising is limited due to the currently low level of competition, especially if we compare it to other channels such as Google Ads. In addition, it is an opportunity to gain a lot of reach at a low price. Nevertheless, Instagram users are generally less willing to interact with an ad compared to Google users. Due to the bidding process, prices increase as competition increases. Beneficiaries of Instagram advertising are those who leverage their experience with target groups to use their budget in an optimal way.
Contact us! In the free initial consultation, we will provide you all the information about the profitability of Instagram advertising.