Are Instagram Ads Worth It? They Are and Here's Why

Are Instagram Ads Worth it?

Looking to invest in digital advertising? Then no doubt Instagram has crossed your mind. The social media platform boasts 1.35 billion active monthly users, presenting a massive untapped audience for advertisers. 

But with so many social platforms options available, are Instagram ads worth it? 

In this guide, we'll break down the value of Instagram ads and whether or not they're still among the top choices for advertisers.

What are Instagram Adverts?

Instagram adverts are paid promotional content created by businesses to extend their reach on the Instagram platform. These ads are marked with a "Sponsored" label, and come in various forms like photos, videos, or carousels. These then appear in a user’s feed, explore page, or between stories, enabling businesses to target a wide audience.

To make the most of these ad placements and features, businesses can pick goals that match their overall marketing plan. This helps ensure they not only get seen but also get real results. 

These goals include:

• Brand Awareness: To enhance the recognition and visibility of the brand.
• Reach: To maximize the number of unique users who view the ad.
• Traffic: To increase the number of visits to a website or a particular webpage.
• App Installs: To encourage more downloads of a mobile application.
• Engagement: To boost user interaction with the content, such as likes, comments, and shares.
• Video Views: To increase the number of views for a video ad.
• Conversions: To drive specific user actions, such as making a purchase or signing up for a newsletter.

With Instagram's parent company, Facebook, owning the platform, businesses can use the Facebook Ad Manager to easily create and manage their ads. 

Different Types of Instagram Ads

Instagram is a predominately visual platform, meaning that their ad formats revolve around high-quality images and videos. 

Here are the different ad formats available on Instagram:

Image Ads

These ads appear as a single image in a user's feed, and can be accompanied by text and call-to-action (CTA) buttons, i.e ‘Book now’ or ‘Learn more’.

Video Ads

Similar to photo ads, but with a video instead of an image. These ads can be between 3 and 60 seconds long, and appear in a user's feed, story or Instagram Reel.

Carousel Ads

A Carousel ads can showcase up to 10 images or videos, making it perfect for storytelling and showcasing multiple products.

Each card can also contain a unique CTA and link which directs users to it's respective landing page.

Stories Ads

Instagram Stories are used by over half billion active users, making it an excellent option to showcase your brand. These ads appear between user's stories, and can be images, videos or carousel formats.

Explore Section Ads

Instagram's explore section is where users discover new content and accounts daily.

Businesses can place either static images or standard image ads in the explore section. These will then appear as users scroll through the content.

Shopping ads 

These ads showcase your products and can be purchased directly through the ad itself on the business' website. This seamless transition from ad to  purchase makes it an effective way of driving sales.

Shopping ads appear in both the feed and explore section, giving businesses enough opportunities to reach their desired audience.

Collection Adverts

Collection ads blend the interactive elements of carousel ads with the direct appeal of shopping ads. This format allows brands to showcase items from their Instagram product catalog, enabling consumers to purchase products directly from the ad. 

Who Should Advertise on Instagram?

Instagram can be used by businesses of all sizes, from small local shops to large international corporations. Even content creators can boost their posts to expose their material and gain new followers.

Instagram relies on compelling visuals to capture and engage users. This means that businesses with visually appealing products or services, such as fashion, beauty, food, travel, and lifestyle will likely benefit the most.

However, Instagram's large user base caters to all advertisers. Even if your business falls outside of the categories mentioned above, you can still use Instagram's advanced targeting options to reach niche audiences.

The key is to understand your target audience and be creative with your ad content to stand out and capture their attention.

Key Statistics on Instagram Ad Success

It's easy to say that Instagram ads are worth it, but without hard data, it's just speculation.

Below we've gathered some key statistics from various sources to showcase the success of Instagram ads:

• Growing Ad Revenue: Instagram's ad revenue reached $43.28 billion in 2022 and is projected to increase to $50.58 billion in 2023. This growth even exceeds that of its parent company Facebook.

• High User Engagement with Brands: A whopping 44% of Instagram users go shopping on the app weekly . This percentage indicates that users respond to brand adverts on Instagram.

• Effectiveness of Story Ads: One-third of stories viewed everyday are branded stories. This means that businesses regularly get noticed on the Story feed.

• Widespread Marketer Usage: Instagram is used by 97.6% of U.S. marketers. So, if you're in the USA and considering Instagram ads, you're in good company.

• Effective Product Tagging: Implementing product tagging in posts leads to a 37% increase in sales. This means ecommerce stores can enjoy a higher number of transactions simply by tagging products in their Instagram ads.

• Building Brand-Customer Relationships: Two-thirds of active Instagram users build meaningful relationships with brands. This shows businesses routinely converse and engage with users on the platform.

• Access to Younger Audiences: Statista states that 71% of Instagram users are under 35 years old. If you're looking to reach a younger demographic, Instagram advertising is the way to go.
• Increased Platform Consumption: In 2022, people spent, on average, 12 hours a month on Instagram, up from 11.2 hours in 2021. This increase suggests Instagram user consumption is only going up - great for advertisers and content creators alike.

While these stats don't tell the entire story, they do suggest that Instagram is still a prime platform to reach and engage with potential customers.

The Benefits Of Advertising on Instagram

With the above stats in mind, let's break down why advertising on Instagram is still worthwhile.

Robust Targeting Capabilities

Whether you operate in a niche industry or a broad one, Instagram's targeting capabilities help you reach the right people.

During the ad creation process, you can select specific demographics, interests, and behaviors to target. You can also create custom and lookalike audiences, which can be based on your chosen customer profiles, existing followers or website visitors. 

This level of targeting precision ensures that your ads are shown to individuals most likely to be interested in your products or services.

Perfect for Ecommerce Stores

44% of Instagram users shop on the platform weekly. Additionally, two-thirds of users form relationships with brands. These statistics collectively make a compelling case for eCommerce stores to advertise on Instagram.

Besides utilizing shopping ads, businesses can integrate their product catalog with the platform to tag and sell their products on the app. This streamlined shopping experience reduces friction in the purchase process for customers.

Ads Get High Engagement Levels Too

Users love to like, comment and share great content, whether they’re ads or regular posts. This means your ads can garner significant attention and engagement, if crafted with the audience in mind. This can include striking or enticing visuals, interactive elements such as polls or quizzes, and engaging captions that spark conversations.

Furthermore, Instagram's direct messaging feature means you can respond to queries, provide customer service, and even send promotions or discounts directly to interested leads.

It's a Powerful Branding Tool

Instagram has over 1 billion active users, providing all types of trending content including user-generated content, influencer collaborations, and behind-the-scenes glimpses into brands. This diverse range of content can be leveraged to showcase and build your brand's identity.

Use a mix of content to showcase your products, culture, and values. This will help establish a strong brand image and create a loyal following.

It Offers Detailed Performance Analytics

Instagram’s Insights tool offers detailed analytics for business accounts, providing metric data like reach, engagement, clicks, conversions and more. This data can help you make informed decisions about your ad strategy and optimize your campaigns for better results.

How Much Does Instagram Advertising Cost?

Instagram ads are generally cheaper than other social media platforms. This means you can pull off massive ad campaigns with smaller budgets, maximizing ROI.

Here's a comparison of average cost-per-click (CPC) and cost-per-mille (CPM) from lowest to highest for various social media platforms:

Cost-per-click (CPC):

• Pinterest: $0.10 - $1.50
• Instagram: $0.20 - $2.00
• Facebook: $0.44 (average)
• TikTok: $1.00 (average)

Cost-per-mille (CPM):

• Pinterest: $2.00 - $5.00
• Instagram: $6.70 (average)
• TikTok: $10.00 (average)
• Facebook: $14.40 (average)

While Pinterest has the lowest ad costs across the board, Instagram is still a more cost-effective option compared to Facebook and TikTok.

Just ensure to keep these figures in mind when setting your ad budget and strategy on Instagram. With the right targeting and content, you can reach a large audience at an affordable cost.

How to Create and Run an Ad On Instagram

There are two ways to advertise on Instagram:

Boost a Post on Instagram

If you don't have a Facebook ad account, you can promote or 'boost' an existing post from your feed. This method is simpler and well-suited for smaller businesses with limited ad budgets. However, it doesn't offer the same level of targeting options and creative control as creating an ad through Facebook's Ads Manager.

To boost an Instagram post:

1. Log in and go to your Instagram business profile.

2. Select a post and press 'Boost'

3. Choose the second option that says you don't have a Facebook account.

4. Select your goal i.e more profile or website visits.

5. Choose from 'Automatic' or 'Create your own' to either target people like your followers or manually set your budget, audience and duration.

6. If manual, select your locations, interest and age & gender.

7. Select your ad budget and its duration.

8. Review your order and click 'Boost'.

Using the Facebook Ads Manager to Create an Advert

1. Create a Facebook Ad Account: Star by creating a Facebook Business Page and ad account. To learn more, read our complete guide on how to create a Facebook ad account.

2. Link Your Accounts: Connect your Facebook page, Instagram account, and advertising account through Business Manager.

3. Set Up a Campaign: Access Ads Manager, and click 'Create' to start a new campaign.

4. Choose Campaign Objective and Audience: Select an objective compatible with Instagram, such as "Send people to your website" or "Get installs of your app." Then, define your target audience using available demographics and targeting options​​​​.

5. Budget and Schedule: Set your ad's budget and decide when it will run​​.

6. Select 'Automatic placements' or 'Manual placements.': We recommend automatic placements for beginners, as this lets Facebook optimize where your ad will be shown across its platforms, including Instagram, for the best results.

7. Create Your Ad: Choose between a single image/video or multiple formats. Ensure Instagram is enabled as a placement, then select your ad creative.

8. Run Your Ad and Monitor Performance: Submit your ad for review. Once approved, it will start running as scheduled. You can track its performance through Ads Manager or Business Manager.​​

Best Practises For Advertising On Instagram

Create an Ad with Striking Visuals

Instagram thrives on visually appealing content, so yours have to be up to scratch to catch user attention.

Follow these basic guidelines to create compelling images:

• Stick to vertical images as they're more mobile-friendly.
• Invest in a good smartphone or camera to capture high-quality photos and videos.
• Use bright, eye-catching colors and avoid cluttered backgrounds.
• Incorporate your brand's logo or identity into the ad to reinforce your business's messaging.
• Use good lighting and a good backdrop to create a professional-looking image.
• Maintain a consistent style and aesthetic across all your ads to establish brand identity.

These should set you on the right path to creating visually appealing ads that stand out on Instagram.

Think About What Stage of the Buyer's Journey Your Audience is In

Many businesses just think about sales and conversions. But if your brand is new, most people won't trust you enough to purchase from you - yet. Instead of trying to sell right off the bat, focus on building a relationship with your audience.

There are three main stages in the buyer's journey which are awareness, consideration, and decision. Here are a few potential ad campaigns you can launch for each stage:

• Awareness Stage: Launch brand awareness campaigns to introduce your brand and familiarize new audiences with your offerings.
• Consideration Stage: Use engagement campaigns to increase interactions such as likes, comments, and shares, deepening audience connection.
• Decision Stage: Implement lead generation campaigns to collect user information, converting prospects into leads with compelling calls-to-action.

By aligning your content with these stages, your Instagram ads can effectively guide potential customers through their purchasing journey.

Ensure Copy is Short and Provides Value

Let’s put it this way: If your ad images catch people's attention, the copy makes them stay and eventually convert.

Focus on writing short and simple sentences that convey your product's or service's benefits.  This means talking less about your product's features, and more about how it can add value to your audience's life.

Lastly, don't use overly sales-y language as it'll come off as insincere. Instead, be genuine and relatable to your audience.

Use Your Existing Customer Profiles to Create Lookalike Audiences

Your customers include all the necessary data to create a perfect audience for your ads. And as the saying goes, birds of a feather flock together.

Use tools like Facebook's Lookalike Audiences feature to find people who have similar interests, demographics, and behaviors to your existing customers. These are more likely to be interested in your brand and convert into customers themselves.

Set a Budget Based on Your Conversion Cost

If you already know the average cost to convert a lead into a customer, use this information to set your ad budget. For instance, if your average conversion cost is $10, and you want to acquire 100 new customers, then you can set a budget of $1,000.

This helps to maximize ROI and ensures you're not overspending on ads. You can also adjust your budget based on the campaign's current trajectory - if some are performing better than others, allocate more budget towards those.

Use A/B Testing to Optimize Your Ads

Ads can be a hit or miss, so you’ll need to continually test and optimize them.

You can do this via A/B testing, where you pit two and variations against each other to see which one performs better. This can involve changing the image, headline, or call-to-action (CTA) to see which version gets more clicks.

After confirming your top-performer, identify which ad elements made the difference and use that knowledge to create future ads.

Monitor Your Ad Metrics

Instagram's Analytics helps users track ad performance. Here, you can see ad metrics such as reach, impressions, clicks, conversions and more.

You can also look at demographic data via Instagram's Insights tool. This allows you to see which age groups, locations, and genders are responding to your Instagram ads the most.

All this information can help you further optimize your ads and target the right audience for maximum conversion rates.

Conclusion

So are Instagram ads worth it?

The answer is yes!

Instagram isn't going anywhere, and with its growing user base, high engagement rates, relatively low ad costs and active shopping audience, it's a platform that most businesses can benefit from.

However, just keep in mind that organic content is still important to maintain a strong presence on the platform and establish brand trust. As such, you can use both strategically to give your business a well-rounded presence on Instagram.

So don't be afraid to invest in Instagram ads, but make sure to also focus on creating quality organic content for long-term success.

Happy advertising!