Determining Your Instagram Ad Cost Per Click & Is It Worth It?
71% of U.S. businesses are now on Instagram. 65% of the top performing posts center around a brand. 80% of users follow businesses. As a business today, Instagram is the place to be, especially when you consider the 800 million active users on the platform.
Yet 70% of posts never get seen.
To be successful on Instagram, you need strategies that get you noticed and help you engage your target customers. But is the cost for an Instagram ad cost per click worth it?
Will you see a decent ROI?
We’ve got the answers. Find out what you should be paying for an Instagram ad cost per click. Then schedule a call with us to discuss how our services can significantly lower that cost per click.
How the Algorithm Decides Your Instagram Ad Cost Per Click
When you choose to use Instagram ads, you’re taking part in one of the fastest auctions ever. But it all happens behind the scenes in a split second.
You don’t have to stand there listening to an auctioneer. You don’t have to raise your paddle, upping your bid each time someone outbids you. Instead, you tell the bidding system how high you’re willing to go.
The bidding system looks at all of the bids for that ad space. It compares the bids to see which one is highest. It then gives the ad space to the highest bidder.
But having the highest bid doesn’t always mean you made the highest monetary bid as we’ll see. Let’s look at the bidding process.
How the Instagram Bidding Process Works
The Instagram bidding system is actually the Facebook Ads Manager. All Instagram ads are set up through Facebook’s easy-to-use ad platform. When you setup your ads, you’ll choose where you want ads to appear.
They may appear on:
- Facebook (in several different locations)
- Facebook’s Audience Network (Affiliate Websites that have agreed to show Facebook’s ads on their sites)
Your bid amount not only determines if you get a spot. It also determines your ad placement. Placement matters. Some placement is clearly superior.
If you’re not trying to reach a competitive audience, you may get a spot regardless of how low you bid. But if you’re in a competitive space, your ad may get no placement at all.
What Determines Your Instagram Ad Cost Per Click?
Here’s a secret you’re really going to like… You don’t have to outbid people financially to win. 3 main factors go into your Instagram ad cost per click. It’s not all about the money.
- Estimated Action Rates
- Your Actual Bid
What Is Relevance?
Relevance is how “relevant” your ad appears to the people who are seeing it. You have great control over who sees your ad in Instagram. Facebook has collected years of extensive data on its users. When you pay for Facebook or Instagram ads, you gain access to this data.
You can target specific users based upon their:
- Affiliations /Employment
- Location — Over 80% of Instagram users aren’t in the U.S. where you’re most likely doing business. Location targeting is one of the most important ways you target in today’s global economy.
- Buying or other user behavior — Target people who buy products like yours.
When your ad is more relevant it enhances the Instagram user experience. That keeps people using Instagram. It earns more quality clicks for you and more paid clicks for Instagram.
Instagram has an invested interest in making sure ads are as a relevant as possible.
So they reward you by “adding” your relevance score to your monetary bid to determine what your top bid actually is. But you still only pay enough to outbid the bidder below you.
What is an Estimated Action Rate?
The estimated action rate is the attention that Instagram estimates that your ad should be getting. It compares your ad to similar ads, your industry, the audience and other factors. Only certain people at Facebook and Instagram know the exact algorithm.
But what you need to know is this. If you under-perform their estimates, it lowers your relevance score. If you outperform it, your relevance goes up.
This is just one more reason doing a competitor analysis is so important. It’s hard to outperform if you don’t know what you’re up against.
Is Instagram Advertising Worth it?
Is each Instagram ad cost per click worth it? Let’s take a look at the data.
On average, you’ll pay between $0.40 and $3 for a click. Instagram has a higher click-through rate (CTR) than Facebook, .08% compared to .06% respectively.
This click-through rate may seem low in general. But remember, you pay for each click.
You don’t want people clicking who aren’t going to help you meet your goals. As people become more familiar with your brand, CTR goes up as well as the quality of those clicks. That means more conversions.
According to info provided by Selftstartr, Instagram ads have 58x the interaction rate of Facebook. People are more likely to see you and want to interact with you.
They may do so by liking, commenting, following, swiping up and clicking. All of these benefit your brand by getting people interested and invested.
Because the interaction rates are stronger on Instagram, you will pay more per click than you will on Facebook.
So is it worth it? It absolutely can be if you’re applying the right strategies to keep costs low and conversion rates high. It is when you recognize the power of Instagram to generate brand awareness, increase leads, increase customer lifetime value and grow your business.
Next, let’s dive into actionable strategies that impact your Instagram ad cost per click and help you get the right return on your investment.
Strategies to Keep Instagram Ad Cost Per Click Low & ROI High
First, let’s look at a strategy that doesn’t work and why.
Can You Just Outbid the Competition?
Many people look at the complexity of relevance scores, estimated action rates, and having to do a competitor analysis. They wonder if they can just outbid everyone.
Long term, they think they can knock everyone out of the water. Then their costs go way down. Here’s why that’s a really bad idea.
You could just spend a fortune on Instagram, paying more than anyone else is willing to bid. But you’ll end up with acquisition costs that are through the roof.
In local advertising, you might overspend temporarily to bump out the competitors. It can work in small markets. But on Instagram, this traditional ad strategy doesn’t work. You won’t be squeezing people out of the market.
There are always new advertisers ready to come in and take their places.
To get the best ROI on Instagram, apply strategies that work. These strategies keep costs low and relevance high.
Set Clear Objectives
You can waste a lot of money on Instagram ad cost per click when you don’t really know what you want to achieve. Sure, you may want sales. But that’s the end result.
If you’re new to Instagram ads, you may need to take steps to get there like:
- Building your brand
- Reach — Increasing visibility
- Website traffic
- Installation of an app with in-app purchases
- Video Views
- Start a conversation
- Brick-and-mortar store visits
In Facebook Ads Manager, choose the objective that best describes what you want this specific campaign to do.
Facebook uses the objective you provide to further help you target the right people on Instagram. When you meet your objectives, this makes you appear more relevant. It lowers your Instagram ad cost per click.
Be honest with yourself and Facebook about what you plan to achieve. Align your campaign with that objective. Now that’s how to keep Instagram ad costs low and get results.
Perform well and you’ll be running full speed in no time.
It’s marketing 101. If you try to connect with everyone, you connect with no one.
The best performing campaigns aren’t the ones that reach millions of disinterested people. They’re the ones that convert 1,000 people who really want what you have.
They buy more of it. They tell their friends. You grow as a business.
You may be using Instagram to build a following for your personal brand as a blogger or vlogger. You may be trying to grow your ecommerce business. Or you might be a local business exploring how digital advertising can help you on a local level.
Whatever you are as a brand, get really clear on who your target is.
Whenever possible, use your own customer data to determine this. Ask customers to complete surveys or use analytics programs to learn more about them. Then create written buyer personas from this data.
Be selective when you choose groups to target. You’ll see the reach going down with each new selection you choose. But now you’re laser-focused on your target.
Get hyper-specific here. Take time to read the interesting options that might help you target:
- Singles or married couples
- People with young children, elementary, or older teens
- People without kids
- People who work at a specific company, in a certain job role or industry
- People who are visiting your area from out of town
- Diet preferences and fitness habits
- Existing customers
- People who’ve visited your website before
That just lists a few. You can even target look-alike audiences. If you have the contact info for existing customers, share it with Facebook. They’ll find you more people who are like your existing customers.
When you target in these ways, you’re more relevant. As that relevance score goes up, your Instagram ad cost per click goes down.
Instagram is absolutely worth it!
Now that you have 1-5 clear targets for your campaigns. Don’t show the same ad to each target.
To connect, the ad should speak directly to the person seeing it.
It may speak to a common challenge or goal for that group. You may use certain language or visuals when targeting Generation X that wouldn’t be as effective for Millennials.
The more aligned your ad is with the audience seeing it, the better it will perform. That’s less cost for clicks and a better response rate.
Don’t Be Shy About CTAs
Maybe you’re nervous about telling strangers what to do. Buy now. Click here. Get the eBook.
Isn’t that too salesy for social media? It’s good that you have some apprehension about being salesy on social media. But there are ways to include CTA that are completely socially acceptable.
In fact, studies show that people prefer to know what you’d like them to do. Tell them in a concise Instagram way. Swipe up. Double tap.
Here a great example within an Instagram story for a sleeping bag.
Also, when someone clicks your CTAs, be mindful of where to send them. According to Baumwald, your ad and what they see on the landing page should match. It is actually recommended to create a dedicated landing page for your Instagram ads and not depend solely on your homepage. Study says that doing so will make the ad campaigns more effective.
Be About the LifeStyle
Instagram is all about the visuals. People go to Instagram to be inspired by what they see. Tapping into this is the way to really connect with an audience. Earn clicks. Be seen as relevant by Instagram.
You’re selling designer sunglasses. What’s the difference between this…
Both show the product you’re selling. Both are nicely produced, high-resolution images. But only one gives you a glimpse into the lifestyle these sunglasses afford the person.
To be more relevant, focus on the people — and pets — that enjoy the product or service, not the product alone.
If you’re a local landscaper, you may think a shot of a beautifully manicured yard will be enough to earn clicks. After all, that’s what you’re selling.
But show a bunch of 20-somethings at a barbecue or kids playing with the dog in that yard. That’s the money shot.
On Instagram, you’re not selling products or services. You’re selling the experience people can expect when they buy your product or service.
It’s a 100% visually based platform, so naturally lifestyle shots outperform product shots 8 to 1, according to a study reported in Entrepreneur Magazine.
Offer Limited Time Promo Codes
Much of the benefit of an ad campaign is delayed. People see your ad. They click it. Then they leave. They come back later. Then after several visits, they may buy something.
In fact, it takes 7-13 clicks before someone becomes a paying customer. It’s hard to swallow the idea that you might be paying a $2 – $3 Instagram ad cost per click 7-13 times for one sale. Your ad just cost you $14-$39 for one sale, depending on how many clicks it took to convert the user.
But be strategic and you can improve this conversion rate dramatically.
To be successful in digital advertising, you have to master the art of getting people to take an action now. Sometimes that’s signing up for an email newsletter. It may be downloading a free trial. Or it may be selling something small.
These micro-conversions help you start the customer relationship. Begin learning more about your new customer. Engage with them to increase their value as a customer.
Including a promo code will not only earn more clicks, it will improve that relevancy score we talked about. It will increase your short-term ROI on the campaign. It will impact your revenues long term as that person comes back to spend more money.
Make it a Contest
Instagrammers love contests. When you create a contest that is very relevant to your target, people can’t help but click to sign up for a chance to win.
Make the prize something uniquely appealing to your audience and fun.
This might be a:
- Product gift pack from your brand
- A free service upgrade
- Something else uniquely valuable to your target audience
Here are some great ways to run contests on Instagram:
- Ask people to take selfies of themselves using a product you sell and tag it with a specific hashtag
- Choose a theme. Ask people to submit themed photos with the contest hashtag.
- Gather contact info that you can use to expand your email subscriber list at the same time.
This is not only a great way to get people involved. It creates social proof. It shows that people use and get excited about your brand. When others see this on Instagram, they want to know what the excitement is all about.
Visual storytelling is what Instagram is all about. A story can be told in a single image. Or it may be a series in an actual Instagram story.
When people see an image that evokes an emotional response, they immediately build their own story around it. You can guide these internal storytelling process by saying something with your ad photos.
Help them envision themselves in that place. Consider your target. Where do they want to be? What do they want to be doing? Capture this in your ad.
Use Facebook Ads Manager to Better Understand Instagram Ad Performance
Ads Manager allows you to customize your reports. This gives you quick access to the data you need to manage your campaigns.
Not only will this report show you the relevance score. It gives you insight into why your relevance may not be ideal. Use what you learn in the article and on our site to make your ads more relevant.
Further customize the report based on your campaign objectives. Did people actually watch your video or did they start it only to leave? How often are your ads appearing?
You’re not only concerned with how people interact. You need to know who.
Breakdowns allow you to find out what types of people are clicking. How old are they? What devices are they on? etc.
Use this information to identify if your ad is connecting with the people you were trying to reach. Know what works and what doesn’t with different groups.
What you learn here will be invaluable. It tells you whether you need to make some changes or if it’s time to ramp up your efforts.
Do more of what you’re doing right.
Once you’ve selected which data is most important to you, see it laid out in an easy to understand visual format.
To keep yourself informed, schedule your reports. You and the emails you choose will receive as frequently as daily.
Instagram ad management takes practice and even experts have to try different things and test ideas. Reviewing this data will help you stay on top of performance and make changes before a misjudgment costs you a lot.
Hint: Don’t overwhelm yourself with data. Determine which Instagram metrics matter the most. Too much data causes data overload. Overloaded? You’ll miss what’s important or get overwhelmed.
Keep your campaigns simple and targeted. That’s how to keep Instagram ad cost per click low and relevance high.
Choose Your Ad Placement
Normally Facebook Ads Manager decides where your ad goes.
But because ad placement is so important, Facebook Ads Manager will allow you to choose where the ad appears. You may have noticed that certain ad placements perform much better for you than others. Select this option to further optimize your ROI.
Only appear where you get the best results.
But be aware that it will reduce your reach. If you didn’t bid high enough for that spot, the ad won’t appear at all.
Consider the pros and cons before limiting yourself in this way.
Choose an Effective Format
Don’t get stuck in a rut when advertising on Instagram. Your relevance score and Instagram ad cost per click will suffer.
Take advantage of the various Instagram formats. Depending on your business, you may find one much more effective when it comes to increasing relevance and your ROI. A combination of 2-3 of them working toward one objective is often most effective.
Choose from the following layouts…
- Instagram Images — Choose square, landscape or vertical to best display your product or service and stand out. If you have a single image that says it all, this can be very effective.
- Instagram videos — Choose square, landscape or vertical to show what you do in the best light.
- Instagram stories — Stories have a lot of features that make your ad more interactive. Ad gifs. Mark it up. Direct viewers to swipe and click to view more and continue the “story”.
- Instagram carousel — Showcase your best products or services with a carousel ad using either still images or a series of 2-10-second videos.
And finally, let’s look at how using more videos can help you keep Instagram ad cost per click low and improve your ROI.
Use More Videos
Inspiring images are at the heart of Instagram. But to get results, video is often more effective. The average person watches over 1 hour of videos on social media each week.
They’re not just sitting down with their coffee to watch a 1-hour video. Instagram videos can only be up to one minute in length. Ad videos are generally much shorter.
So they’re watching a lot of videos.
92% of mobile video watchers regularly share videos with others. Video drives 158% more traffic to websites than other mediums. But does all of this activity translate to business revenues?
Over half of marketers say video delivers the highest ROI. 64% of people have bought something after watching a video. Conversion rates are 30% higher.
Get more engagement. Appear more relevant. Keep costs low to maximize profits.
Instagram Ad Cost Per Click: You Don’t Have to Spend a Fortune
When it comes to advertising on social media, relevance helps you keep costs low. To be relevant, set clear objectives. Know who you’re targeting. And put strategies in place that earn quality clicks.
Track your ad’s performance. Make changes to improve your relevance. Continue cut costs and improve your ROI.
Are you overspending on social media advertising? Having trouble getting acquisition costs down? Or maybe you just simply don’t have the time to invest into your ads. We can help you streamline your social media advertising to get the most out of your budget. Not only will your Instagram ad cost per click decrease, but your stress level will as well. Contact us to schedule a consultation to see how our social advertising services can help you and your business.