Instagram Advertising in Close Up: Ad Objectives and Cost

With over 1 million advertisers and a massive community of more than 700 million monthly active users, Instagram's marketing potential is bigger than ever before. We wanted to take a closer look at advertising on the platform to discover latest trends and costs. Here's what we found out:

For a long time, advertising on Instagram was available only to selected few marketers. It wasn't until 2015 that Instagram rolled out self-service advertising accessible to every Instagram business profile.

Since then, marketers are able to choose from four ad formats (Photo, Video, and Carousel in the feed, plus Stories) and eight ad objectives (Brand Awareness, Reach, Traffic, App Installs, Engagement, Video Views, Lead Generation, Conversions).

To find out how marketers are using Instagram's advertising capabilities and how much advertising on the platform actually costs them, we analyzed exclusive Socialbakers data on nearly 40,000 Instagram ads published between January and June, 2017.

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Clearly, when it comes to Instagram, marketers are focusing mainly on ads that trigger user action. This makes a lot of sense, given the fact that Instagram is a highly engaging platform - as Socialbakers' own data has shown, brands get nearly 4x more interactions on Instagram compared to Facebook. Companies tapping into Instagram's potential to engage prove that they are well aware of the platform's character and optimize their social media advertising strategy accordingly.

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With both Instagram and Facebook ads, we found a correlation between ads’ Click-through-Rate (CTR) and Cost-per-Click (CPC). On Instagram, ads with a CTR of 0.0% - 0.1% are 16x more expensive than ads with a CTR of 1.9% - 2.0%. This difference is less drastic on Facebook, where the worst-performing ads cost nearly 10x more than the top-performing ones.

The costs of advertising on both Facebook and Instagram are strongly influenced by the effectiveness of ads, as measured by CTR. At the same time, an inefficient advertising strategy on Instagram will be more costly than on Facebook. Marketers also shouldn't be taking Instagram’s high reach for granted, as it might come at a price.

Tip: To make your Instagram advertising more cost-effective, put your resources into creating quality ads and closely monitor their performance with a social media marketing tool.

The Takeaway

Instagram advertising is strongly engagement-oriented. Companies are optimizing their ads primarily for objectives that get the audiences to interact, which plays to the platform’s strengths at engaging its users.

The cost of Instagram ads depends on how much engagement they generate. That's why it's important to make sure that your ads are compelling enough to capture users' attention and make them interact.


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