How Much Do Instagram Ads Cost in 2024? All Ad Prices + FREE Tools

By Alexandra Kazakova
18 min READ | Dec 3 2024

Instagram Ads can be expensive.

We've seen it firsthand. Many businesses struggle with high advertising costs on social media platforms like Instagram.

But there is a way to get better results while spending less.

For example, our in-house performance creative agency, inBeat, helped Hurom do just that. B

y leveraging influencers, we managed to decrease their Cost Per Acquisition (CPA) by 65%.

But you can use other strategies that drive cost efficiency.

If you're wondering how to control the actual cost of your Instagram Ads or achieve a better-performing campaign, you're in the right place.

We’ll cover the average cost, Instagram CPM, and the cost of advertising across ad types like Video Ads and Instagram Reels.

More importantly, we’ll help you make every dollar cost work harder for your company.

P.S.: Curious about keeping Instagram Ads costs under control while boosting your campaign’s impact?

At inBeat, we offer smart tools to optimize your ad spend. With our extensive influencer database and cost-efficient strategies, you can target the right audience, lower Cost Per Acquisition, and improve engagement rates—all without breaking the bank.

Ready to learn more? Book a FREE Demo and explore how you can achieve more with your budget!

TL;DR:

Instagram Ad Costs: Costs vary by ad type, with average CPC ranging from $0.50 to $1.00, CPM from $2.50 to $3.50, and CPE between $0.01 and $0.05.

Factors like audience, industry competition, and ad quality influence prices.

Ad Formats and Costs:

• Photo Ads: CPC $0.70–$1.00.
• Video Ads: CPC $0.80–$1.20, higher engagement rates.
• Carousel Ads: CPC $0.70–$1.00, showcasing multiple products.
• Story Ads: CPM $3.00–$5.00, full-screen engagement.
• Reels Ads: CPM $4.00–$8.00, popular for short-form video.
• Shopping and Collection Ads: CPC $0.80–$1.50, e-commerce-focused.

Cost Comparisons:

• Instagram is more cost-efficient for CPM than Facebook ($2.50–$3.50 vs. $8.96).
• Facebook may offer lower CPC for traffic-focused campaigns.

Optimization Strategies:

• Use daily budgets and test manual vs. automatic bidding.
• Refine ad creatives and run A/B tests.
• Schedule ads during off-peak times to reduce costs.
• Leverage influencer collaborations for cost-effective reach.
• Utilize tools like inBeat’s calculators and mockup ad generator.

Case Studies:

• Hurom: Reduced CPA by 65% using influencer strategies.
• NYC Votes: Achieved a 70% view-through rate with tailored content.
• New Balance: Reached 750K audience with influencer campaigns.

Influencer Marketing Benefits:

• Delivers up to 8x higher engagement than brand-generated content.
• Influencer partnerships can boost ROI by up to 650%.

Key Recommendations:

• Combine influencer marketing with paid ads for maximum impact.
• Use tools and insights to optimize ad spend and reach target audiences effectively.

What Are Instagram Ad Costs?

Instagram ad costs can vary widely, but understanding the basic metrics and average rates helps you manage your budget effectively.

Costs depend on factors like your target audience, industry competition, and ad quality, but with the right insights, you can optimize spending.

1. Cost Metrics

Instagram ad costs are defined by specific cost metrics that let you see exactly where your budget is going.

Here’s a quick overview:

Cost per Click (CPC)

This one measures the dollar cost for each link click, giving insight into how much you pay when users actively engage.

For example, a CPC of $1.50 on Instagram Stories means you’re spending $1.50 for every click to your destination URL (which is a bit much, but we’ll show you the exact costs in a second).

CPC is ideal for direct-response campaigns where the focus is on getting users to take a specific action beyond viewing the ad, like signing up, exploring a product, or purchasing.

Cost per Engagement (CPE)

This KPI tracks the cost of engagement metrics like likes, comments, or shares.

Basically, it shows how effective your images or video content are in drawing active responses.

A CPE of $0.02 could mean your story ads or in-feed video ads are performing efficiently because they bring in actions without excessive spending.

CPE is great for building brand loyalty and community on social media, especially in campaigns designed to encourage audience interaction with images, stories, or videos.

Cost per Thousand Impressions (CPM)

CPM reflects the cost for every 1,000 views, which is particularly useful in awareness campaigns aiming to reach a broader audience.

A CPM of $10 means that for every thousand impressions on your Instagram feed ads, the actual cost is $10.

This knowledge helps you analyze visibility in competitive industries.

2. Average Costs of Instagram Ads

These metrics give a detailed view of how every dollar is allocated toward achieving your campaign goal.

But understanding the average costs of Instagram Ads is key to optimizing your advertising budget.

Here's a breakdown:

• Cost per Click (CPC): Typically ranges from $0.50 to $1.00, though in competitive industries, it can reach up to $3.00 per click.
• Cost per Engagement (CPE): Generally falls between $0.01 and $0.05, depending on the ad's appeal and audience interaction.
• Cost per Thousand Impressions (CPM): Averages between $2.50 and $3.50 for well-performing campaigns, but can vary based on factors like ad quality and audience targeting.

These figures are influenced by several factors:

• Ad quality: High-quality, relevant content tends to lower costs by improving engagement rates.
• Target audience: Narrowing down to a niche audience can increase costs due to higher competition for specific demographics.
• Industry competition: Sectors with intense competition often see higher advertising costs.

Analyze these metrics and factors to develop a more cost-effective advertising strategy on Instagram.

Different Types of Instagram Ads - How Much Do They Cost?

Instagram offers a variety of ad formats to cater to different marketing goals, each with unique advantages:

Instagram Photo Ads

These classic ads blend into your audience’s feed with only the "Sponsored" label to give them away.

Still, they're straightforward and genuinely effective for driving clicks to websites or promoting single products​.

Cost: The average CPC for photo ads ranges from $0.70 to $1.00, but this can vary based on targeting and competition.

Influencer collaboration, especially through sponsored posts, is a cost-effective choice because you’re leveraging the influencers' follower base for potentially lower costs compared to the more direct advertising method.

Pro tip: To reduce Instagram ad costs while amplifying reach, find through inBeat.co.

Our platform offers a vast database and precise targeting tools to connect you with influencers who can engage your niche audience effectively.

Instagram Video Ads

These ads use engaging videos of up to 60 seconds to tell a dynamic story or demonstrate a product in action.

These are thumb-stopping and increase engagement through poignant visual and audio elements.

Cost: Video ads may have a slightly higher CPC, averaging between $0.80 and $1.20, due to their engaging nature and higher user interaction rates.

Instagram Carousel Ads

Carousel ads allow you to include multiple images or videos in a single ad, which users can swipe through.

This format is perfect for showcasing a range of products or telling a step-by-step story​.

Plus, it works wonders at raising people’s curiosity.

For example, fitness trainer Evan Daly uses this format frequently to promote his business:

Story Ads appear between user stories.

They’re really effective because they offer a full-screen experience that can include quick, engaging photos or videos.

As a side recommend this format especially for promotions because it has a strong visual appeal that generates high engagement rates​.

Cost: Story ads often have a cost per thousand impressions (CPM) ranging from $3.00 to $5.00, depending on targeting and ad quality.

Instagram Reels Ads

Reels capitalize on the popularity of short-form content by featuring full-screen, vertical videos in the Reels feed.

You can upload Reels of up to 15 minutes long, but Instagram CEO Adam Mouseri says that shorter clips of up to 90 seconds perform better.

These are great for reaching younger audiences and driving brand awareness with high-energy content.

These are shown to users actively exploring new content beyond their feed.

We love them for increasing brand exposure to new potential customers​.

Cost: Explore ads typically have a CPC similar to feed ads, averaging around $0.70 to $1.00.

Collection Ads

Designed primarily for e-commerce, Collection Ads users to purchase directly from the ad with an immersive shopping experience.

These ads can feature a mix of images and videos to showcase products effectively​.

Cost: Collection ads may have a higher CPC, averaging between $1.00 and $1.50, due to their interactive features and direct shopping capabilities.

Instagram Shopping Ads

These transform a standard image or video ads into interactive shopping experiences by tagging products directly in the visuals.

They are effective in driving direct sales from the ad.

• Cost: Shopping ads typically have a CPC ranging from $0.80 to $1.20.

Remember: Please note that these costs are average estimates and actual costs can vary based on factors such as your target audience, ad relevance, competition, and bidding strategy. Instagram ads operate on an auction system, so costs can fluctuate over time. It's recommended to monitor your ad performance and adjust your budget accordingly.

That brings us to the next point:

Factors Influencing Instagram Ad Costs

Several key factors can influence the costs associated with Instagram ads:

• Campaign objectives: The goal you set for your campaign significantly impacts cost. For instance, objectives aimed at driving conversions (like purchases) typically incur higher costs than those focused on brand awareness due to the higher-value actions being targeted​.
• Audience targeting: The specificity and size of your audience also play a crucial role. Targeting a niche audience with specific demographics or interests can drive up costs due to increased competition. Conversely, broader targeting tends to be less expensive but might be less effective.
• Ad creatives: The quality and engagement level of your ad creatives significantly affect costs. Ads with high-quality visuals and compelling copy that resonate well with the target audience tend to have lower costs per engagement, as Instagram's algorithm rewards engaging content with better placement and lower prices​.
• Platform fees: Starting in February 2024, using Instagram’s iOS app to boost posts may incur an Apple service fee of 30% of the total ad payment. This fee applies specifically when boosting ads directly through the app on an iPhone or iPad​.

Effective management of these factors involves optimizing your ad creatives and targeting, aligning your campaign objectives with your business goals, and considering the timing and audience of your ads to maximize return on investment while minimizing costs.

Facebook vs Instagram Ad Costs

When comparing ad costs between Facebook and Instagram, you must understand that each platform caters to different user behaviors and engagement patterns.

Here’s a brief comparison:

• Cost per Click (CPC): Facebook's average CPC is approximately $0.58, while Instagram's ranges between $0.50 and $0.95.
• Cost per Thousand Impressions (CPM): Facebook averages a CPM of $8.96, whereas Instagram's CPM typically falls between $2.50 and $3.50.
• Cost per Action (CPA): Facebook's CPA varies from $8 to $55, depending on the campaign objective and target audience.

Note: These costs are average estimates and actual costs can vary based on factors such as your target audience, ad relevance, competition, and bidding strategy. Both Instagram and Facebook ads operate on an auction system, so costs can fluctuate over time. It's recommended to monitor your ad performance and adjust your budget accordingly.

These cost variances highlight the importance of choosing the right platform based on campaign objectives, target audience, and desired engagement level, all crucial for maximizing return on advertising spend.

Let’s see some examples.

If you have a budget of $1,000, on Instagram, you could achieve roughly 400,000 impressions ($1,000 / $2.50 CPM x 1,000 impressions), whereas, on Facebook, you'd get about 111,607 impressions ($1,000 / $8.96 CPM x 1,000 impressions).

So, Instagram is ideal for campaigns aiming to maximize reach and brand visibility, especially among younger demographics.

But for a campaign with a $500 budget aimed at driving website traffic, you could get approximately 862 clicks on Facebook ($500 / $0.58 CPC) versus around 526 to 1,000 clicks on Instagram, depending on the actual CPC within the range.

Facebook can, therefore, be better for campaigns focused on driving traffic, lead generation, or conversions due to potentially lower CPC and a broader audience base.

Also, a financial services company targeting adults over 35 might achieve better results on Facebook.

But a fashion brand targeting millennials may find better engagement and ROI on Instagram.

Strategies to Optimize and Reduce Ad Costs

To optimize your Instagram advertising budget and reduce costs effectively, consider these strategic approaches that leverage both technology and creative content:

1. Budgeting and Instagram Ad Bidding

Start with a daily budget to control spending, then decide between automatic bidding for consistent results or manual bidding for competitive flexibility.

Test different bid strategies to find the ideal fit for your campaign budget.

Or, dive into the more complex details below.

1.1. How to Set Your Instagram Ad Bidding

To set Instagram ad bidding, start by defining your campaign objective, which will guide the strategy you choose—such as whether you’re focused on awareness, reach, or conversions.

Once you've done this, create an ad set that includes your audience, placements, and budget, making sure all these align with your campaign goals.

Next, decide on your budget type—either a daily budget, which sets a fixed amount for daily spending, or a lifetime budget, which allows Instagram to spend more flexibly over the entire campaign duration.

This choice will influence how your bidding is handled.

Navigate to the “Optimization & Delivery” section of Ads Manager to find your bidding options.

You can either select automatic or manual bidding.

This brings us to the next point:

1.2. Manual vs Automatic Bidding on Instagram

Automatic bidding lets Instagram determine the best bid for each action, which is ideal for those who are new or looking for simplicity.

It works well when you want Instagram to optimize for conversions or impressions within your set budget.

Manual bidding, on the other hand, allows you to set a specific bid for each action, which is useful if you have experience or know exactly how much you’re willing to pay per click, impression, or action.

If you go with manual bidding, decide whether you want a cost cap to ensure cost-per-result doesn’t exceed a certain amount, or a bid cap to limit how much you’re willing to bid for a specific action.

Keep competitor benchmarks in mind, and balance your budget against audience size to avoid exhausting your funds too quickly or failing to get enough impressions.

After setting up your bidding method, monitor the campaign results.

With automatic bidding, keep an eye on performance and adjust the budget if needed, while manual bidding requires you to look at metrics such as cost per thousand impressions (CPM), click-through rate (CTR), and cost per action (CPA).

Adjust your bid limits if your results aren't meeting expectations.

2. Ad Performance and Relevance

Boost relevance scores by refining ad creatives and conducting A/B tests.

Use clear, enticing images and engaging copy to improve conversion rates and lower costs.

Hint: We’ll show you a great tool for A/B testing in just a few seconds.

3. Time Your Campaigns

Schedule campaigns to avoid peak hours when CPCs spike, such as holidays or weekends.

Off-peak times can provide a cost advantage in competitive industries.

4. Leverage Tools

Use Instagram’s Audience Insights to refine targeting, ensuring your ads reach the most relevant audience.

This precision targeting can help decrease overall campaign costs.

Pro tip: Utilize inBeat's free calculators for budgeting insights.

These tools allow for smarter ad placements and cost control.

Our free CPA (Cost Per Acquisition/Action) Calculator allows users to determine their CPA by inputting any two of the following: Total Cost, Conversions, or CPA, with the third value automatically calculated.

There’s also an advanced version where you can compare multiple campaigns.

Our free CPM Calculator helps users calculate their Cost Per Thousand (CPM) by entering any two of the following fields: Total Cost, Impressions, or CPM, with the third value auto-calculated.

Again, you can use this CPM calculator’s advanced version to track the results of different Instagram ad campaigns.

But before you have any results to track, you should refine your:

5. Content Strategies

Develop content that genuinely resonates with your target audience to enhance engagement without increasing spend.

Pro tip: Use inBeat’s Instagram mockup ad generator to experiment with different content setups before launching live ads.

This one’s also great for A/B testing creative assets.

You can create realistic ad previews by selecting ad formats (Square, Portrait, Landscape, or Story), uploading an image, and adding profile details and captions.

The final mockup appears on the right, and you can download it as a PNG for easy sharing or presentation.

6. Using Influencers

Partner with influencers to tap into their engaged followings for a lower cost than traditional ad placements.

This can be particularly effective in reaching niche audiences.

Access our influencer database to connect with niche creators who drive engagement without the high costs of traditional ads.

The platform simplifies finding influencers aligned with your target audience.

• Our filtering tool lets you refine influencer searches by follower count, engagement rate, location, and language, with options to require email contact and exclude previously exported profiles. Once settings are chosen, click Ok to apply the filters and display influencers that match your specified criteria.

Pro tip: You can use our Influencer Marketing ROI Calculator to estimate the potential reach, engagement, and impressions for your campaign.

Simply input your budget and the average followers per influencer and select the desired content types to see projected campaign results instantly.

Case Studies and Examples

Some companies achieve awesome outcomes if they use tailored & data-driven Instagram ad strategies.

Let us give you some examples:

1. Hurom

Through the strategic use of influencer partnerships, Hurom scaled its return on ad spend (ROAS) by 2.5 times.

They focused on targeted audience engagement and high-quality content first and foremost.

This is what effectively reduced their cost per acquisition while increasing the overall engagement rate without relying so much on discount-based ads.

2. NYC Votes

inBeat Agency executed a campaign for NYC Votes that resulted in a 70% average view-through rate.

The agency used audience data to create highly relevant and engaging content tailored for a specific demographic.

That’s how they managed to increase the campaign's efficiency, reducing overall ad spend and improving cost-effectiveness.

3. New Balance

Utilizing a network of influencers, the agency helped New Balance reach a cumulative audience of 750k across creators.

This strategy extended New Balance’s reach and optimized its ad spend.

After all, leveraging the organic reach and credibility of influencers helps you cut back on other high advertising investments.

Maximizing ROI with Instagram Ads: Insights on Cost, Conversions, and Strategic Impact

Instagram ads offer varied cost structures tailored to campaign objectives, audience targeting, and ad quality.

Instagram users average $65 per sale, outpacing Facebook’s $55, which highlights Instagram’s unique ROI for social media advertising.

With a conversion rate of 1.08%, Instagram’s visual platform drives valuable engagement for businesses.

But there's more to Instagram ads than just cost and conversion metrics—leveraging influencer marketing alongside paid ads can provide a multiplier effect on results.

Collaborating with relevant influencers helps build authentic connections with target audiences, amplifies ad messaging, and drives significantly higher engagement rates.

In fact, influencer-generated content has been shown to deliver up to 8x higher engagement rates compared to brand-generated content, with 49% of consumers reporting they depend on influencer recommendations for their purchase decisions.

Influencers are also trusted by their audiences, making them a powerful addition to traditional advertising.

Studies show that 92% of consumers trust an influencer more than an ad or traditional celebrity endorsement. Their authentic recommendations can significantly enhance ad impact, increasing both conversion rates and overall ROI to 650%.

Pro tip: It’s also important to build relationships with high-performing influencers.

These partnerships drive action and foster trust in your brand, leading to both immediate conversions and long-term loyalty.

By understanding these dynamics and integrating our insights on cost management, businesses can harness the full potential of Instagram ads, ensuring every dollar spent maximizes both reach and returns.

Whether you're aiming for broad brand awareness or targeted conversions, you need to pick the right creators.

Discover how inBeat’s powerful influencer database and Toolkit can transform your ad strategy.

Try inBeat for free and see how easy optimizing your budget can be!

Frequently Asked Questions

How much does it cost to put an ad on Instagram?

The cost varies, with CPCs generally between $0.50 and $1.00, but it can reach up to $3.00 per click in competitive industries.

Are Instagram ads worth it in 2024?

Yes, with Instagram users spending an average of $65 per referred sale and a conversion rate of 1.08%, the platform offers robust ROI for advertisers.

How are Instagram ad costs calculated?

Costs are calculated based on CPC, CPE, and CPM metrics, influenced by ad quality, target audience specifics, and industry competition.

How much does Instagram advertising cost per month?

Monthly costs can vary widely depending on ad frequency, chosen campaign settings, and engagement goals, with some campaigns spending thousands monthly.

What is a good budget for Instagram ads?

A good starting budget can range from $5 to $10 a day for smaller campaigns, scaling up based on campaign objectives and expected reach.

Are Instagram ads cheaper?

Instagram ads can be less expensive than other platforms like Google Ads but vary based on target audience and competition.

What is the minimum ad price on Instagram?

Instagram allows a minimum spend of $1 per day on ad campaigns, but effective campaigns typically require a higher budget.

How does Instagram charge you for ads?

Instagram charges based on ad interactions, such as clicks or impressions, with options for daily or lifetime budget settings.

How much of your advertising budget should you spend on Instagram Ads?

Allocate between 20% to 40% of your digital advertising budget to Instagram ads to effectively tap into its high engagement and conversion rates.

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