HOW MUCH DOES IT COST TO ADVERTSIE ON INSTAGRAM

At Lillian Purge, we specialise in Local SEO Services and have written How Much Does it Cost to Advertise on Instagram to help you budget effectively, understand the variables affecting ad costs, and plan campaigns for any business size.

Instagram has become one of the most effective platforms for businesses to reach potential customers. With over a billion active users, it offers powerful targeting tools that help brands connect with audiences based on location, interests, and behaviour. But before launching a campaign, one of the most common questions businesses ask is: how much does it actually cost to advertise on Instagram?

The short answer is that Instagram advertising costs vary depending on your budget, goals, audience, and competition. This article breaks down how Instagram Ads pricing works, the factors that affect costs, and how to manage your spending effectively.

How Instagram Advertising Works

Instagram advertising operates through Meta’s (Facebook’s) Ads Manager platform. This system runs on an auction model, meaning advertisers bid for ad placements in front of specific audiences. You don’t always pay the highest price, but you do compete with others targeting the same users.

You can set daily or lifetime budgets, choose how long your campaign runs, and control how much you’re willing to spend per click, view, or conversion. Instagram then uses your budget to deliver ads to users most likely to engage or take action.

Average Cost of Instagram Ads in the UK

Instagram ad pricing is typically measured by:

  • Cost per Click (CPC): How much you pay when someone clicks your ad.

  • Cost per Mille (CPM): How much you pay per 1,000 impressions.

  • Cost per Action (CPA): The cost when a user completes a desired action, like signing up or purchasing.

On average, UK businesses can expect the following ranges:

  • CPC: £0.30 to £2.00 per click.

  • CPM: £4.00 to £10.00 per 1,000 impressions.

  • CPA: £3.00 to £10.00 depending on conversion goals and industry.

These costs fluctuate based on seasonality, audience size, competition, and the quality of your ad content. For example, ads targeting highly competitive industries such as finance or fashion tend to be more expensive than those for local services.

Factors That Influence Instagram Ad Costs

Target Audience

The more specific your targeting, the higher the potential cost. Reaching a broad audience is cheaper but less precise. If you target users by interests, age, location, and buying intent, expect to pay slightly more for that precision.

Ad Placement

Instagram offers different ad placements such as Feed, Stories, Explore, and Reels. Feed ads generally cost more because they tend to deliver higher engagement, while Story ads can be more cost-effective for brand awareness.

Campaign Objective

Instagram allows you to choose from several objectives, including awareness, engagement, traffic, or conversions. Awareness campaigns (focused on visibility) tend to cost less than conversion campaigns (which aim for purchases or sign-ups) because conversions require more valuable actions.

Bidding Strategy

You can choose between automatic bidding, where Instagram optimises delivery based on your goals, or manual bidding, where you set a maximum bid per result. Automatic bidding suits beginners, while manual bidding gives experienced advertisers more control over costs.

Relevance and Quality Score

Instagram rewards high-quality ads with better placement and lower costs. Ads that generate engagement (likes, clicks, shares) are seen as more relevant, meaning you’ll pay less per result compared to poorly performing ads.

Season and Competition

Ad costs rise during busy periods such as Black Friday, Christmas, or major sales events. More advertisers compete for the same audience, increasing bid prices.

How to Set a Budget for Instagram Ads

When starting out, it’s best to test with a smaller budget to understand what works for your business. Many small businesses begin with around £5 to £20 per day. Once you have data on which ads perform best, you can scale spending accordingly.

There are two types of budgets:

  • Daily budget: The average amount you’re willing to spend each day.

  • Lifetime budget: A total spend limit across the campaign’s entire duration.

Instagram automatically adjusts your spending within these limits to maximise results.

How to Reduce Instagram Advertising Costs

Even with a limited budget, you can achieve strong results by focusing on efficiency and relevance.

  1. Refine your audience: Avoid targeting too broadly. Use insights from previous campaigns to focus on high-performing demographics.

  2. Improve ad creatives: Use eye-catching visuals, short captions, and clear calls to action.

  3. Use retargeting: Show ads to users who have already interacted with your brand to increase conversion rates.

  4. Test different formats: Experiment with carousels, videos, and story ads to find what drives engagement.

  5. Run A/B tests: Compare two versions of an ad to identify which performs better and allocate more budget to the winner.

  6. Schedule smartly: Run ads during times when your audience is most active to maximise performance.

Examples of Instagram Ad Formats

Instagram offers several ad types to suit different marketing goals:

  • Image ads: Ideal for showcasing products or services.

  • Video ads: Capture attention and tell a story.

  • Carousel ads: Allow users to swipe through multiple images or videos.

  • Stories ads: Full-screen vertical ads that appear between user stories.

  • Reels ads: Short, engaging clips that reach users exploring trending content.

Each format has unique benefits, so experiment to see which works best for your audience.

Measuring ROI from Instagram Ads

Tracking return on investment (ROI) is essential for understanding whether your campaigns are cost-effective. Use Meta Ads Manager to monitor performance metrics such as:

  • Click-through rate (CTR).

  • Conversion rate.

  • Cost per conversion.

  • Engagement rate.

  • Overall return on ad spend (ROAS).

Regularly reviewing these insights helps identify which ads deliver the best results so you can adjust your strategy and budget for maximum efficiency.

Common Mistakes That Increase Costs

  • Ignoring audience insights and targeting too broadly.

  • Using generic or low-quality ad creatives.

  • Failing to optimise landing pages for conversions.

  • Running campaigns without testing variations.

  • Not monitoring performance and leaving underperforming ads active.

Avoiding these mistakes ensures your ad spend delivers measurable returns.

Expert Advice from Lillian Purge

  1. Start small and scale strategically. Test various ad types before committing to larger budgets.

  2. Focus on quality. High-performing content reduces costs and increases engagement.

  3. Use retargeting. It’s one of the most efficient ways to convert warm leads.

  4. Analyse results weekly. Adjust bids, visuals, and copy based on performance data.

  5. Combine with SEO. A strong organic presence supports paid campaigns for long-term growth.

Instagram advertising can be highly cost-effective when managed correctly. By understanding how the pricing system works, setting realistic budgets, and continuously optimising your campaigns, you can achieve excellent results regardless of your ad spend.

We have also written in depth articles on How to Advertise on Instagram and How to Advertise on Instagram for Free as well as our Instagram Hub to give you further guidance.