If you’re considering using Instagram advertising to promote your business, one of the first things you are likely to consider is your budget. How much should you spend, what is the likely result and will it offer you a good return on your investment? 

With that in mind, we take a look at Instagram ads costs in the UK in 2024.

How do Instagram ads work? 

Instagram advertising works by placing advertisements in the feed of your ideal audience—usually in the grid, on Instagram stories, or on reels. You can choose which placements you wish to use and can use various placements in a single campaign. 

Instagram is actually part of Meta (formerly known as Facebook ads) so to set up an Instagram advertising campaign, you actually use the Meta ads manager. While you are able to create sponsored posts directly on Instagram, for a well-performing advertising campaign, we would always recommend that this is set up via the Facebook ads manager. 

When it comes to Instagram advertising, there are a number of types of campaigns that you can create and it’s usual to have several types of campaigns or different “ad sets” running at once, but this will very much depend on your business and your overall budget. 

As an example, you can choose campaigns that drive users to your website (traffic), conversion campaigns - which are designed to show to people who are likely to take valuable actions such as buying a product or making an enquiry about a product or digital marketing service. You can choose reach campaigns that have the objective to get your ads in front of as many people as possible. Which types of campaigns you run will depend on your overall marketing strategy and objectives. 

If you’d like to learn more about how Instagram advertising works, why not consider our Facebook ads training. A totally tailored course to help you to get to grips with the platform. 

What is the minimum cost to advertise on Instagram? 

In theory, you can advertise on Instagram for as little as £1 a day.

However, this is very unlikely to achieve anything useful so it’s wise to think about setting a budget that will achieve your aims.

When it comes to working out your objectives, consider how people are likely to interact with your business. For example, if you sell a low-value product that is used in everyday life, it may be as simple as someone seeing your advert, clicking and buying there and then. 

If you’re a b2b provider, you may have quite a long sales process where you need to “warm up” your audience before expecting them to make an initial enquiry. 

Instagram and Facebook advertising generally works on “cost per impression” meaning that you pay for how often your advert is placed on feeds. Impressions are not unique, so often, the same Instagram user will see your advert more than once, and you will still pay for each time they see your advert. 

When you start advertising, a good benchmark is to look at cost per thousand impressions (CPM). This will vary depending on who your audience is and what type of campaign objective you are using, and will also fluctuate depending on how many other advertisers are  “going after” the same audience. If you imagine that each and every person’s Instagram feed is somewhere that holds virtual billboards - consider that you are effectively bidding against other advertisers to get space on those “billboards” (whether it’s story placement, a post in the feed or a reel). If your target audience is a competitive one, then the chances are that more advertisers are “bidding against you” and therefore you are likely to pay more for an impression. 

Once you have an idea of the CPM, you can take an estimate of what your click-through rate is (the percentage of people who see your ad who then click or take action). This will give you an idea of how much traffic you can expect to your website if you are undertaking say a conversion campaign. Then look at the “conversion rate” on your website - the number of people on your website that take action (making a purchase or making an enquiry).

So for example let’s say that you have a CPM of £10 for your campaign, a 5% click through rate and a 2% website conversion rate. 

This means that for every £10 spent, you can expect to have 50 website visitors. If you then convert 2% of them to sales then you can expect 1 “action” per £10 you spend. 

Of course, all of the above figures are completely dependent on your ads, your call to action and how much a conversion is worth to you. 

A rule of thumb that is often mentioned is a minimum budget of £10 per day for Instagram advertising. However, in reality, most successful campaigns will have a budget of at least £20 - £50 per day, and big advertisers can spend tens of thousands. 

That doesn’t mean that small budgets cannot work - but it is worth investing properly with a plan for scaling up your campaigns. 

How much should I spend on Instagram ads?

There is no right or wrong answer here. Like any marketing campaign, there are no guarantees of how they will perform, but there are some things you can put in place to help you to get a better idea. 

Firstly we recommend choosing a test budget to start advertising. This will at least allow you to get a feel for the topline costs for your specific audience and campaign type. 

Firstly, Meta will give you an estimated reach and performance of your campaigns based on your target audience and bid. While we would caveat that this tends to be a big range and often inaccurate, you can at least get some baseline figures to start with. 

It’s also important to consider your own margins. For example, if you are offering a service, then you may have large margins (as there are no production costs). Whereas if you sell a product with smaller margins, it’s worth considering how you increase the value from each purchase event, for example by increasing your average order value. 

Is Instagram advertising pay per click? 

No. You pay for impressions - but you can get to a cost per click by looking at how much you are paying for someone to click on your advert. However, unlike with Google advertising, you are not charged based on how many people click on your advert, but on how many times it is placed on the feed. 

Your “cost per click (CPC) is based on the CPM/number of clicks. The good news is that by constantly testing and improving your ads - you can drive down the cost per click. The bad news is - even if not a single user clicks on your adverts - you will still be charged for advertising. 

However, CPC is not always the best measure for Instagram campaigns. For example, if you are running a campaign that is designed to get people commenting on your post, then your measure would instead be engagement rate. Or you may be choosing to run a lead generation advert - where a user fills in a form directly online - again, here you would be looking at cost per lead, and not per click. 

How are you charged for Instagram adverts? 

As above, you are charged for impressions. However, you set a specific budget (you can choose to set a daily budget or a lifetime budget), and over the course of a month or the lifetime of the campaign, you will not be charged more than the total monthly or lifetime budget. 

Looking to learn more?

If you’re thinking of advertising on Instagram, we can help.

We offer Instagram advertising training which is designed to help you to get more from your ads budget.

Or if you’re looking for a social media agency to look after your advertising for you, then do get in touch.