What is Instagram Advertising Pricing?
Advertising on Instagram is similar to running ads on Facebook. There are a few gaps related to formats, placements, and, of course, costs.
Instagram ad prices differ from Facebook’s for several reasons. The Facebook platform, which has owned Instagram since 2012, has more seniority and a different user profile database. There were 3 billion monthly active users on Instagram in 2025. Pretty much the same as on Facebook.
The price varies due to many factors. Here is a baseline of how much Instagram ads cost:
- Cost Per Click (CPC) is around 0.50-1 USD per click.
- Cost Per Mille (CPM) is around 2-5 USD per 1,000 impressions.
It is interesting to notice that the CPC is lower on Facebook than on Instagram. This is because Facebook is more text-based than Instagram, which is visual-oriented. On the contrary, the CPM is lower on Instagram than on Facebook, for the same reason.
Of course, businesses must take those averages carefully. If you advertise products in an extremely competitive field, such as apparel, it is normal to see CPCs as high as 5 USD on Instagram.
On the other hand, if you run both Facebook and Instagram ads in parallel and notice that your CPM is higher on Instagram, that should be a red flag. It means your campaign needs optimization.
In the article below, we will list and explain the main factors that affect Instagram ad costs. After that, we will share valuable tips on optimizing your Instagram advertising costs.
What are the Factors Impacting Instagram Ads Costs?
When running Instagram ads, businesses must consider the following factors:
- Bidding.
- Ad relevancy score.
- Estimated action rate.
- Competition.
- Market industry.
- Target audience.
- Timeframe.
Now, let’s explain in detail how each factor affects the pricing of Instagram ads.
Bidding
The bidding amount is how much you are ready to pay for a specific result (ex, a click or a conversion) when running ads.
When launching their campaigns, all businesses must define a bid. Those bidding amounts will compete. Based on various factors, Instagram’s algorithms will decide how to deliver ads to platform users.
To illustrate with a concrete example, let’s say you have a budget of 1,000 USD for running your campaign. If you value 1 click at 1 USD (meaning your bid is 1 USD), you can expect to get 1,000 clicks during this campaign.
Ad relevancy score
This factor measures how relevant your ad is to your target audience. Every ad published on Instagram (or Facebook) must comply with the ad policies.
The logic behind this is simple. Instagram wants to show content that is relevant to its users. This includes both organic and paid publishing.
Consequently, the platform prefers ads that are highly relevant. The better your ad follows the policies and resonates with the audience, the lower your bid will be.
Make sure to polish your ads. It saves lots of money.
Estimated action rate
Instagram estimates the action rate based on the likelihood that users will engage with your ads. Engagement means viewing, clicking, converting, and so on.
The platform keeps this estimation confidential. Advertisers can only have a sense of it when running ads and following up on the campaign performance.
This important metric influences the cost of the ad. If the rate is high, the bid amount will decrease. Besides understanding Instagram ad policies, companies can maximize their estimated action rate based on past campaign experience.
Competition
Over 200 million businesses have a company page on Instagram. Only 10% of them run ads on the platform.
It means there are around 20 million potential competitors on Instagram. Of course, competition depends on the location and the products.
When advertisers set a bidding amount for their campaign, the Instagram algorithm compares it to all other bids. If a competitor bids high and has a good ad relevancy score, it may force you to pay more during your campaign.
Market industry
Depending on the business field, Instagram ad costs vary a lot.
This social media network focuses on creative and engaged people. Companies operating business-to-business (B2B) must spend more to activate their ads. On the contrary, Instagram ads cost less for Business-to-Customer (B2C), especially for physical products.
Due to intense competition, ad pricing can be higher for travel and fashion, which are the top topics on Instagram.
Target audience
The target audience is all the Instagram users who will see your ads. Their profiles significantly impact the ad costs, such as:
- Location
- Age
- Gender
- Interests
- Behavior
From experience, ads targeting women are more expensive, because they are more likely to engage and shop than men on average.
Timeframe
Instagram ad pricing depends on the moment when the campaign runs. When setting up ads, the business manager lets advertisers schedule their campaign delivery.
It costs more to run Instagram ads during holidays or special events because the competition is fierce.
It is also good to know that Instagram users engage more with both organic and paid publications during the weekdays than on weekends. Wednesday and Friday are the best days to run ads at a lower cost.
How to Optimize Instagram Ad Costs?
With the information shared above, you understand that having a small budget shouldn’t prevent you from running ads. Low bidding can win if your ad is relevant to your target audience and more appealing than your competitors’.
We recommend that businesses polish their ad creatives to succeed with Instagram ads. This is more important than the media spending itself.
Besides, Prodima Vietnam is happy to share professional tips to help you reduce your advertising pricing on the Instagram platform:
- Choose the right goal
- Use all data available
- Polish your ad visual and landing page
- Segment your audience
- Do A/B testing
Let’s develop each hint in detail.
Choose the right goal
Many businesses fail at running optimized ads because they do not select the right objective for their campaigns. A few of them have no goals at all and choose randomly.
Take this step seriously if you want to reduce your ad costs.
For example, if you are a newcomer in a competitive market, do not run conversion ads right away. Instagram users have no reason to purchase your products instead of those from well-established companies. In this case, you need to run brand awareness campaigns first.
Once your business has enough visibility and trust, you will consider running ads to sell your products.
Use all data available
The best way to get started with Instagram ads when having no data is to choose the option “automatic bidding.” It will allow the platform algorithm to populate enough information for future campaigns.
Once you have enough data, we recommend going manual. It requires extra effort, but such involvement always pays off in the long run.
Since Facebook owns Instagram, do not forget that you can use Facebook data (ex, from the Facebook pixel) to run your ads.
Polish your ad visual & landing page
As mentioned above, the ad relevancy score is crucial to reducing your ad pricing on Instagram.
Make sure you create appealing, engaging, interactive, and suitable images and videos for your target audience. The more relevant and creative they are, the more likely you are to pay less for them.
To lower the cost of Instagram ads, consider videos instead of photos, if possible. Instagram users engage more with them.
Think about your Call To Action (CTA) button. You need to make it visible and attractive enough so your target audience interacts smoothly. Keep the text short (1-3 words max).
Segment your audience
As always, when running ads on every digital platform, the less you segment your audience, the more accurately you will target.
Create groups of ideal customers, also called “personas”, and design dedicated Instagram ad visuals for all of them.
Consider using custom and lookalike audiences to lower your costs and get more conversions. Custom audiences are users who have already interacted with your brand. Lookalike audiences are people who have not engaged with your business yet but are using the digital platform and have a similar profile to your custom audience.
Do A/B testing
If you run a campaign that delivers the same ad visual to all audiences, you prevent yourself from optimizing performance.
If you run a campaign that delivers 2 different ads to the same audience, you can evaluate which one performs better and choose the best.
Follow up on Instagram Insights. Create several ads that differ on 1 single factor and optimize as you go. This is the best way, if not the only one, to reduce your ad costs on Instagram.
Is it worth it to run Instagram ads?
Yes, it is. All businesses have an interest in running ads on Instagram, whether they are small or large, with a low or high budget.
It takes time to learn how to run efficient ad campaigns on Instagram. Many businesses are afraid of Instagram ad pricing. If you read this article carefully, you should be more confident now.
Instagram ads offer one of the highest Return On Investments (ROI) of all ad platforms, thanks to their engaged community. Instagram users spend more time on the platform than on any other social media network.
Get started with your ads. Contact our team of Instagram experts now!
