For years, Facebook ads have been the top choice for social media advertising, largely because Facebook lets companies focus on specific customer groups and helps marketers quickly find what works best in their campaigns, including the right visuals, audience, placement, and more.
This is according to Timothy Masek, a senior growth strategist at the marketing agency Ladder. He explained that Facebook’s purchase of the photo-sharing app in 2012 allowed them to easily add Instagram as a placement choice within the Facebook ads platform, which is exactly what marketers wanted.
“Since 2015, choosing to display your ads on Instagram has been as simple as using a basic toggle in the Facebook Ads Manager platform,” Masek added. Because of this, Patrick Havey, social media manager at the digital marketing agency Passion Digital, said it might be appealing to handle Instagram ads the same way as Facebook ads. “However, despite the fact that both platforms now replicate each other’s features – has anyone noticed The Great Storification? – users still interact with them in different ways,” he said. This presents several advantages for marketers who know how to leverage them. Furthermore, Havey emphasized that Instagram posts tend to get 10 times more engagement than Facebook posts on average.
Instagram engagement stats “This presents a special chance to establish credibility and forge genuine connections with your target groups in an environment free from excessive clutter,” he added. In agreement, Nathan Mendenhall, director of social strategy at digital marketing agency That Agency, affirmed that Instagram is a platform with high user interaction and serves as an excellent choice for increasing both brand recognition and website traffic. Free download: Improve your strategies with our free all-star online advertising playbook.
What’s the Price Tag? Understanding Instagram Ad Costs
However, Keith Baumwald, founder of the boutique consulting agency Leverag Consulting, pointed out that online ad costs for Instagram ads tend to be a bit higher than their Facebook equivalents. “With highly targeted ads, you could end up spending over $5 per CPM” (cost per thousand impressions) on Instagram, Baumwald explained. Conversely, Masek noted that when Facebook introduces a new ad feature, like a new creative format or audience type, they often lower the CPM to make it more appealing and accessible to marketers. “So, while a typical CPM on Facebook Ads currently hovers around $10, it used to be closer to $5 on Instagram,” Masek said. “Nowadays, the difference is becoming less and less significant. This meant that running ads on Instagram was inherently more budget-friendly for marketers – in fact, twice as much.” Simultaneously, as Instagram started introducing ads, users were clicking on them at a much faster rate than they were on Facebook, Masek observed. “Users have grown accustomed to ads on their Facebook newsfeed and have started clicking on them less frequently – similar to how the first banner ad on the internet had a 44% click-through rate (CTR) while today’s banners have a 0.1% CTR,” he added. “Therefore, when Instagram launched ads, not only were they less expensive, but the CTRs were incredibly high.” Damon Gochneaur, founder of the digital marketing agency Aspiro Agency, emphasized that the typical cost of advertising on Instagram can fluctuate significantly depending on factors like the ad type, the target audience, and the creative elements used. “Generally, single image ads will have the highest cost, while carousel or multi-image ads usually outperform single image ads,” Gochneaur explained. “Furthermore, video ads typically surpass both single image ads and carousel ads in performance. Moreover, the specific audience you are targeting will also influence the overall cost of the ad.”
Example of a video ad on Instagram from Netflix “This [$5 CPM] is still considerably cheaper than almost any other platform for display ads, particularly when you consider the effectiveness of its targeting capabilities,” Baumwald added. “However, if you operate in a highly competitive market, whether due to your product or geographical location, the costs can increase substantially.” Let’s delve into how advertisers can manage these Instagram ad costs, regardless of their target market. P.S. Don’t miss our updated article on the cost of advertising on Instagram in 2021.
1. Keep Your Ad Content Authentic and Not Overproduced
Havey pointed out that because Instagram doesn’t allow users to schedule posts, content that feels genuine tends to perform well. “When users perceive something as fresh and authentic, they’re more inclined to engage with it and develop a positive impression of your brand,” he explained. “User-generated content can be incredibly effective and contributes to building a reciprocal relationship between the brand and the consumer.”
Havey also emphasized that the most successful social ads blend seamlessly into the platform’s natural flow. “No one enjoys seeing an ad that stands out like a sore thumb in their meticulously curated Instagram lifestyle feed,” he stated. “Therefore, concentrating on compelling visual storytelling and brand marketing, rather than aiming for an immediate direct response, can often yield more favorable outcomes.” Scott Bauer, marketing director at digital marketing firm Navigator Multimedia, noted that Instagram users have become adept at distinguishing ads from posts by actual followers. As a result, advertisers should be mindful that they might only have one or two seconds to capture a user’s interest before they scroll past. “The highest ROI won’t always be found in the lowest CPM. I advise crafting content that resonates with your target demographic and avoiding a premature sales pitch,” he said. “Instagram is a highly visual platform, and your goal should be to produce top-funnel content to introduce your business/brand.” He added, “Many advertisers approach Instagram as they would search ads, but the context is entirely different.”
2. Use Video to Expand Your Audiences
According to Gochneaur, companies aiming to reduce Instagram ad costs should explore creating slideshow-style videos using their existing photo assets. They can then use these video ads to target consumers at the top of the funnel who haven’t yet developed any brand affinity. “Video traffic has a lower acquisition cost and allows you to grow your audiences more cost-effectively – the key takeaway being ‘build audiences,’” he elaborated. “Once you’ve attracted traffic through the initial video ad, you’ll want to employ remarketing aligned with a sales funnel to generate revenue and business growth from the Instagram traffic.”
3. Test Different Creative Approaches and Audience Segments
Masek emphasized that as users become more familiar with Instagram ads and CPMs become more competitive, marketers can enhance their ad performance through testing. “Facebook and Instagram reward companies that deliver content relevant to their users. The higher your CTR, the higher your relevance score and the lower your CPMs – that’s the fundamental principle,” he explained. “The way to achieve relevance with your ads is to experiment with different combinations of audience, messaging, and creative elements,” he advised. “Avoid showing the same ad to everyone. Instead, select five distinct audiences, set them up as separate campaigns, and then craft five different ads tailored to each audience. Then, observe the results as you invest your media budget and see how the world responds to your ads.” By doing so, Masek suggested that marketers might discover that one specific audience yields a 10 times lower CPC, and within that audience, one particular Instagram ad generates a 5 times higher CTR. “Discontinue all other campaigns and concentrate your budget on this winning combination. That’s how you strategically leverage the system,” he added.
4. Optimize Your Campaigns Using Demographic Data
Mendenhall emphasized that because Instagram ads are managed through Facebook’s advertising platform, marketers have access to the same valuable data – and it’s crucial to utilize it.
“We recommend analyzing which demographics are generating the most expensive outcomes and excluding them from your targeting,” he said. “For instance, if your data reveals that men aged 45-54 have a cost per click of $2.00, removing them from your targeting will help lower your overall costs.” Baumwald concurred with this approach. “By segmenting your ads based on different criteria, you’ll quickly identify which audiences offer the most cost-effective results,” Baumwald said. Mendenhall also advised launching Instagram campaigns with a focused audience and adjusting as costs fluctuate. “When you add or remove a targeting parameter and notice a decrease in the cost per result, take note of that for future campaigns,” he suggested. “Continue making these minor adjustments as needed.”
5. Maintain a Strong Relevance Score
On a related note, Mendenhall highlighted the importance of the Relevance Score, which is Facebook’s metric for assessing the quality of an ad.
“This score is determined by factors such as your ad’s creative elements, targeting, and overall results,” he explained. “A higher Relevance Score translates to more efficient use of your budget.” Furthermore, David Bosley, managing partner at the digital marketing agency PBJ Marketing, suggested that if marketers struggle to gain impressions using the target CPA/CPL/CPI method, they can try averaging the suggested bid and doubling it. “While it’s unlikely you’ll actually pay this significantly higher rate, it will help you win more auctions. On average, you might still be able to achieve your target metrics,” he said. “Give it a shot – it may not work for everyone, but when it does, it can deliver exceptional results.”
6. Develop a Comprehensive Campaign Strategy
Havey explained that the ability to reach the same users on both Facebook and Instagram offers marketers a valuable opportunity to build a multi-touchpoint campaign without significant effort. “A well-executed social ad strategy that effectively utilizes each platform can smoothly guide your audience through the entire customer journey, from awareness to purchase to advocacy,” he added.
7. Design Dedicated Landing Pages
Baumwald emphasized the importance for brands to carefully consider what happens once users who click on their Instagram ads arrive at their website. “Is there consistency between the ad’s creative elements and what they see on the website? Are you implementing best practices to make it easy for users to convert?” he asked. “Landing pages with higher conversion rates make it significantly easier to justify the costs associated with slightly more expensive Instagram campaigns. For a truly effective campaign, prioritize building dedicated landing pages instead of directing users to your homepage.” Bosley pointed out that the most successful Instagram campaigns typically have mobile-friendly goals, such as increasing brand awareness, driving app installs, generating leads, and sending users to mobile-optimized websites that load quickly (within three seconds or less).
8. Implement Retargeting
By adding a tracking pixel to their website or app, brands can easily retarget users who have previously visited their sites. “Because these individuals will already have some familiarity with your brand, the advertising will be significantly more effective,” Baumwald explained. “The cost might remain similar, but the number of users who convert should be considerably higher.”
He did offer a word of caution: “Keep in mind that you’ll be targeting a much smaller audience with this approach, so it’s crucial to update your creative elements regularly to prevent ad fatigue. Your audience shouldn’t be seeing the same ads from you repeatedly.”