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Is Advertising on Instagram Worth It?

Sammi Caramela
Sammi Caramela

Advertising on Instagram could be a great way to attract new audience members with striking visuals. But is it right for your business?

It's no surprise that Instagram has become a successful marketing tool for businesses of all sorts and sizes. Implementing Instagram ads into your marketing strategy can do wonders for your bottom line. Through high-quality visuals, you can increase your brand's visibility and cultivate awareness of your business.

However, Instagram advertising can be an expensive investment, especially for small businesses with limited budgets. Wondering whether Instagram advertising is right for your business? Here are some factors to consider before getting started.

What are Instagram ads?

Unlike organic marketing efforts on Instagram, Instagram ads are paid advertisements that target people who are most likely to be interested in the product or service displayed. This helps companies reach consumers based on their interests and demographics.

"Instagram ads show up on a user's Instagram feed," said Linda Chester, founder of The Health Hour. "The person or the brand advertising pays to post the sponsored message. The aim is to reach a specific audience of people, known as a target audience, and this group will be defined by you."

Instagram advertising is simple to spot, but it also blends in with other content. At the top of each sponsored image, it has the word "Sponsored."

How much does advertising on Instagram cost?

Instagram advertising can get pricey, but the cost is often flexible and depends on your budget. For example, you can run your ads based on cost per click (CPC) or cost per mile (CPM), focusing on impressions. Influencer Marketing Hub reported that the average CPC ranges from 20 cents to $2, and the average CPM is about $5 per 1,000 visitors.

"The amount will depend on how long you want to have your ads be visible on the platform or the kind of groups or audiences you want to reach," said John Howard, founder and CEO of Coupon Lawn.

Types of Instagram ads

There are various types of ads on Instagram, each serving unique purposes. Here are the most popular options:

  • Carousel ads: This is a single post with up to 10 photos/videos for users to swipe through, so you can highlight different products or the specific details of one product, or tell a story developed over each swipe, Chester said.

  • Stories ads: These ads appear in the stories feature of Instagram; they last only a few seconds and often provide a "swipe up" option or other call to action.

  • Photos ads: This is the simplest and most common type of Instagram ad, according to Howard; it's a single photo displayed on the timeline to promote a specific product or service.

  • Video ads: These ads follow a similar concept to photo ads, except in video form, which is often more engaging. They can be up to 120 seconds long, according to Chester.

  • Collection ads: This type of ad is a collection of photos/videos in a grid-like format, with one as the main ad and the others showing the specific products displayed. You can give customers the option to purchase directly from the post, according to Howard.

  • Explore ads: These ads are posted on the Explore page, where users go to discover new accounts. Explore ads display your brand with content that is culturally relevant and trending, Chester said.

Targeting users on Instagram

Instagram allows you to target your audience in the same way as Facebook ads. You complete your targeting based on certain traits, such as gender, age group and interests.

Nevertheless, because Facebook owns Instagram, it's possible to gain information on Instagram by associating users with their Facebook accounts.

To make these ads work, you have to link your Instagram and Facebook accounts.

Instagram campaign successes

As you're considering Instagram for advertising, look at some leading examples to understand whether this platform is right for your business. Here are two successful Instagram campaigns:

John Lewis campaign

Clothing retailer John Lewis launched a campaign in which it targeted females between the ages of 25 and 34. The company's goal was to inform users about the retailer's autumn/winter fashion collections. The campaign lasted six weeks, and the company worked with a number of top fashion bloggers in Britain.

John Lewis Campaign

Image via Instagram

According to Instagram, John Lewis increased its number of followers by 10,000. The brand also saw 14 times the amount of purchasing intent for women within the chosen age range. The success led John Lewis to extend the initiative into a quarterly campaign.

Channel 4 campaign

Channel 4 is one of the primary TV channels within the U.K. In 2014, Channel 4 unveiled its series of original programming, named Gogglebox. Channel 4 wanted to use Instagram to promote its show, particularly to males and females ages 16 to 34.

Channel 4 Campaign

Image via Instagram

This campaign ran for three weeks from October 2014 to November 2014. Channel 4 decided to use photo content exclusively and developed images to match the personalities of the characters in the show. The goal was to increase engagement, so Channel 4 asked users to guess which character was related to each photo.

The campaign reached 750,000 people, and ad recall increased by 19 points. It allowed Channel 4 to target younger viewers, who are more likely to watch Channel 4 than the other U.K.-based TV channels.

Do people pay attention?

It's pointless to invest in ads if people are numb to them. In an article for The Guardian, author Grace Regan, a millennial, polled her fellow millennial friends about their feelings about advertising on Instagram.

She found that most people hadn't noticed ads cluttering up their feeds. This meant the ads accomplished the primary goal of not being noticeable to users. There are three types of thoughts that appeared when ads were initially introduced to this audience:

  1. This goes against everything Instagram stands for.
  2. People are concerned ads will disrupt their feeds.
  3. Some users didn't mind the advertising at all.

Users who don't respond to ads, however, simply don't notice them; these users have become numb to ads on social media. More important for businesses is that Instagram's high engagement rates demonstrate that users don't distinguish between user-generated content and business-generated content.

Is Instagram advertising worth it?

When Instagram advertising is done right, the potential benefits are unparalleled. However, for these campaigns to be successful, you must know your target audience and how to reach those users.

It's important to create images that will resonate with your target audience, and to do this, you must do your research and experiment. Success with Instagram is never guaranteed, but with the right strategy, it can be an effective advertising platform for a wide range of businesses.

 

Bright Yellow Creative; Instagram Statistics

Original reporting by Alesia Hsiao.

Sammi Caramela
Sammi Caramela,
business.com Writer
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Sammi Caramela has always loved words. When she isn't writing for business.com and Business News Daily, she's writing (and furiously editing) her first novel, reading a YA book with a third cup of coffee, or attending local pop-punk concerts. She is also the content manager for Lightning Media Partners. Check out her short stories in "Night Light: Haunted Tales of Terror," which is sold on Amazon.