Instagram ad cost depends on the bidding option you choose. Facebook gives you the choices of cost per click (CPC), cost per thousand impressions (CPM), cost per action (CPA) or cost per like. You can also choose between automatic and manual bidding.

Instagram Ad Cost

According to eMarketer, Instagram’s average CPM is between $5-$6 on the buyer side and the average CPC is calculated to fall in the range of 56 cents and 72 cents.

Let’s learn in detail how each of these factors impacts the final cost of your Instagram ads.

How Instagram Ad Cost is Calculated

Instagram follows the same rules as its parent company, Facebook, when calculating ad costs. There are a few variables that ultimately determine how much you will pay:

  • Bid price – the bidding amount tells the platform how much you’re willing to pay for your ad to be placed. Manual bidding tells Facebook the highest price you’ll pay and automatic bidding has Facebook choose your bid to match the best price for the most engagements.
  • Ad quality and relevance – Facebook gives a score to ads based on how relevant they are to the audience being targeted and how people react to it. Your score increases when people react positively to your ad and decreases if people respond negatively, such as hitting the “hide this” button. Ads with a high relevance score are placed over lower-scoring ones.
  • Estimated action rates – this number represents how much Facebook thinks a person will perform the action an ad is optimized for (such as downloading an app or visiting a website).
  • Audience targeting and competition – the cost of advertising on Instagram increases when there are other advertisers competing to show ads to the same audience. Keep in mind the people you’re targeting and if others will be trying to land the same spot.
  • Time of year – with all advertisers fighting for ad space during the heavier advertising periods of the year, such as during the holidays, prices tend to increase because of the level of competition. Consider this variable before preparing your budget.
  • Ad Placement – allowing Facebook to place ads on their other networks, such as the main Facebook platform and the Audience Network, helps reduce the average cost of your ad.
  • Optimization of ad delivery – just like in other ad platforms, be sure to optimize your ads for the results you want. Develop a targeting plan to ensure your ads end up in front of people that are valuable to you, increasing your chances of having your ad placed over a competitor and driving down your costs.