Everything you need to know about the Instagram advertising budget

Everything you need to know about the Instagram advertising budget


For many of you wondering how Instagram ads work, the first question is always the same: How Much Budget Should I Invest in Advertising for Instagram Ads? And with all the pain in my heart, dear readers, I must answer you what you will surely be tired of hearing: depends.

Yes, it depends on a lot of things. it depends on the sector that you work, it depends on the quality of your website, depend on price of your product… An Instagram Ads campaign, like on any other platform, requires detailed study of various aspects. Here we put some of the most important points to calculate the budget you should invest in Instagram advertising.

What to consider when preparing an advertising budget on Instagram Ads?

▶ ️ CPM: The pillar on which every Social Ads campaign is based

Beyond the sectors in which you work or the cost of your product, in terms of investment the most universal measure is the Cost per thousand (CPM). This refers to the thousand impressions that can be produced, on any device, of your ad. CPM too varies depending on the type of campaign we are doing. For example, a website traffic campaign will have a lower CPM than a conversion campaign; and in turn, an awareness campaign will cost less than website traffic.

But, in addition, we have other elements that determine the CPM. the ad quality level and the interest or public you are bidding on the cost of your campaigns will also vary.

That said, in Instragram Ads a website traffic campaign can have a CPM of between € 1 and € 2 while a conversion campaign can reach double or even reach much higher figures in the most competitive sectors. (between € 12 and € 15).

▶ ️ Calculate the margin of your product

We continue with the keys to knowing your advertising budget on Instagram Ads. Now that we have talked a little about the most universal measure, if we talk about costs, we can comment on the total cost of a campaign. This can only be known by you.

If your goal on Instagram is to get leads and then contact them, only you can know what the conversion rate is per 100 contacts. To do this, you will later need to work on these contacts so that go down the funnel until the conversion

.

If you run an e-commerce store, only you can know what margin you have per sale (usually 30% of the product’s price). Finally, There are a number of things that you as a business need to see. Once that is clear, we will go in to assess the cost per click.

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▶ ️ CPC: From click to success

Cost per click is the amount of investment it takes for someone to click on your ad. This value is closely related to CPM and click-through rate (CTR). For example, if an ad has a CPM of $ 2 and a click-through rate (CTR) of 1% and the ad has been printed 3,000 times, we’re talking about your cost per click of 0.20 cents.

▶ ️ Cost per result: finally we talk about income

And now comes the time when we talk about the end results. Cost per outcome is the end goal, where we all want to go. For it You need to calculate, of all the clicks your ad receives, how many are converted into actual sales. When it comes to budgeting, the conversion rate is usually around 1% of total website visits (0.5% if you want to put yourself at the worst). In this case, you already have the necessary data.

▶ ️ Calculate advertising budget in Instagram ads

Let’s go. Calculate your budget needed to succeed on Instagram.

Calculate your product’s margin. Once in hand, calculate how many sales your business needs to be successful. With the necessary sales calculated, and if you have the data, check what the number of sales is per 1000 visitors to your website. Once the visits you need have been calculated, keep in mind that this number usually coincides with 1% of your ad impressions.

Example: I need 20 Instagram sales. 1% of my visitors buy, so I need 2000 visits. Those 2000 visits translates to 2000 clicks on the link, let’s calculate that is 1% of all impressions, so I need 200,000 impressions. From the cost per thousand it follows that I need to multiply the CPM by 200. Let’s say I have a CPM of $ 5. we multiply 200 by 5… and you have it. Your budget for advertising on Instagram Ads is $ 1000.

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Instagram Ads, one of the cheapest networks to advertise

Congratulations! You already know your advertising budget on Instagram Ads. I have to say that Instagram is one of the social networks with the lowest CPM and assumed CPC; And that’s not to mention places like stories, where the cost is even lower. Facebook typically doubles the cost and LinkedIn is around $ 10 per CPCSo Instagram is a great option if you want to invest the minimum budget to get results.

On the flip side, now that Twitch is experiencing its fastest growing, some testing can be done on its ad service. How to do it? We have a spectacular article on how to get the most from your investment with Twitch

If you have been attentive, that is to say if you have come this far, you will see that there is a closed answer, this is why you will have to carry out tests and prepare the campaigns well, make good copies and see what works best in your industry. Tested. Don’t stop trying, only then can you see how to increase CTR and therefore reduce costs. (the higher the click-through rate, the higher the visits, and the row of dominoes continues to decline).

And if you find that calculating your advertising budget on Instagram Ads is more difficult than you expected … well, here is a team that can help you achieve your goals more easily.



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