If you’re buying a new car, you might start by researching models online, looking at the price range for the car and choosing the one you like. Then you go to a dealership and haggle your way to below market value, armed with the knowledge of what your car should cost.
But when you’re buying Instagram ads, there’s no salesman or online marketplace to look at. You can’t haggle over the phone or cite competitor’s prices.
So how do you make sure that you’re not overpaying for ads?
After all, marketing budgets are not unlimited! You want to get a good return on what you spend.
That’s why we’ve compiled these proven techniques for figuring out if your Instagram ads cost too much.
Read on for instant Instagram savings!
Quick Refresh Calculating Your Instagram Ads Cost
The cost of Instagram ads, like the cost of many digital ads, is determined by a number of factors. They’re all important factors to dig into when you’re trying to figure out if you’re overpaying.
Let’s take a quick peek at the most important things you need to know:
- Ad quality and relevance. Instagram wants to show people ads they like and interact with, so if your ads play well with your intended audience, they’ll be more successful in Instagram’s algorithm.
- Your price limits. When you’re setting up your Instagram ads, you can choose upper limits for your spend on bids and your overall campaign.
- Competition for your audience. If you choose a highly sought-after group, it will cost more to advertise to them. This is where your targeting and personas make a big difference.
- Estimated action rates. Like rating your ad for relevance, Instagram rates your ad based on how likely users will be to engage with your ad.
- When you run your ad. Everything from day of the week to time of the year matters when you’re trying to figure out your Instagram ads cost. If you wanted to advertise around Christmas, for example, you’d have much stiffer competition, and therefore would have to pay more to place your ad.
For a more in-depth refresh, check out our deep dive into Instagram ads cost. We include a full breakdown of costs by demographic and a full rundown of the cost of Instagram ads in 2017.
But if you’re feeling confident, let’s get started on figuring out if you’re paying too much.
We’ll look at 6 ways to evaluate the cost of your ads:
- Historical cost
- Ad optimization
- Objective settings
- A/B Testing
Consider this your ultimate checklist to evaluating the cost of your ads!
Psst… if you’re setting up your very first ad campaign, check out our beginner’s guide!
1. Look at How Much Your Instagram Ads Cost, Historically
If you’ve run your fair share of Instagram ads, it’s worth comparing and contrasting what you’ve typically been paying, to what you’re paying for a new campaign. You should absolutely keep track of your ad spend by campaign, and look at how that changes over the year or with different personas.
However, this isn’t a foolproof way to tell if you’re paying too much. What if you’re launching a totally new campaign or product with a different target audience? What if you were part of a niche industry that’s started to boom?
Though looking at your previous numbers is important, take them with a grain of salt. If you suddenly see an uptick in your numbers, look for outside factors that might be affecting your ad space, like more competition.
If you’ve never run a campaign before, or if you don’t have enough campaigns for a robust comparison, don’t worry. You don’t need historical costs to investigate your Instagram ads cost.
There are many other ways that you can make sure you’re paying the right amount.
2. Look at Your Ad Optimization Settings
When you are setting up your ads in your ad manager, you will be asked to optimize your ad for certain actions, like clicks or impressions.
But if your optimization and your ad campaign don’t align well, you’re driving up the cost of your ads. Earlier this year, we wrote:
An ad’s optimization option can affect the ad’s cost because it determines who will see the ad. If these people don’t complete the objective action you’ve set for the ad, the ad’s estimated action rate and relevance scores will decrease, causing the ad’s cost to increase.
If you want your Instagram ads cost to stay low, you need to take care to pick the right settings when you’re setting up your campaign. Although this seems like a basic tip, there are so many things to decide on when you’re setting up your ad, it can be easy to make a mistake.
If your ad cost seems unnaturally high, you should go back into your ad settings and make sure nothing looks off.
Is your CTA “Shop Now” but your ad is charged based on impression and not clicks? Well, there’s your problem.
Pro Tip: If you’re the creator of the ad campaign, try to get a fresh pair of eyes on your ad’s settings to spot potential errors.
3. Check Your Objective
Speaking of, optimization and objectives go hand in hand.
Since costs are partially based on estimated action rates, you need to align all of your ad content and the objectives for your ad.
The types of campaigns you’d run to build local awareness are probably pretty different from the ads you run to boost website conversions.
Telltale signs that you’re driving up your costs with poor objectives are:
- Repurposed content from an existing campaign is now much more expensive to run
- Your ad is getting impressions but few interactions
- The copy, image and in-app directives don’t all align
Creating an Instagram ad is easy, but creating a cohesive campaign with killer ads — from copy to ad placement — is really hard. So if you take a look at your ad spend and it’s higher than you would want, one of the first places you should look is objective.
If the objective doesn’t match the ad, it’s going to get ranked lower because it’s more annoying for users, and you’ll end up paying more.
4. Run an A/B Test
If you aren’t running A/B tests on your ads, you should be! A/B Tests are a great way to optimize your ad performance — which leads to a lower Instagram ad cost.
The truth of the matter is that if you aren’t A/B testing, you’re overpaying for Instagram ads.
A/B Tests help you:
- Find the most effective copy and images
- Tweak your audience
- Pick the best ad placement
- Refine CTAs, links, emoji use, and more
Remember how Instagram wants to run ads that are likely to succeed? By A/B testing, you’re finding which of your ads is most likely to succeed. This will lower your costs for your current ads, and help you hone in on the elements that ring true with your audience.
With AdEspresso, you can easily run A/B tests on your ads right from our editor. You can track and compare campaigns, and even test multiple audiences in the same campaign:
And if you want a huge breakdown on exactly how to make your A/B test a smash success, check out our beginner’s guide to A/B testing!
5. Look at Your Target Audience
While you may think you’ve discovered your perfect audience, it’s always worth it to try something new once in a while.
Slight tweaks to your targeting can reduce cost by uncovering a more receptive audience. This means that your ads are more compelling, which will help them rank higher in Instagram’s algorithm.
Putting out ads to the same or very similar audiences time after time is a problem for a couple of reasons.
It contributes to ad fatigue, which can make users less likely to engage with you and more likely to flag your ads as spammy or irrelevant. It can also keep you from finding a narrower audience that’s more in tune with your brand and less sought after.
Because competition is a factor in ad cost, honing in on a more targeted audience will reduce your ad cost.
So, take a look at your campaign and ask:
- Am I using an audience that’s targeting too many people?
- Am I using a lookalike audience from previous campaigns that might not be a great fit for this one?
- Have I tried A/B testing my ad with different audiences?
- Has the marketing team recently revisited our personas?
If you are answering “yes” to any of the above questions, you’re probably overpaying for your Instagram ads.
For a great way to start focusing in on your audience, or to refresh your user personas, revisit how to make personas for your ads — we’ve even included a workbook that will get your costs back on track.
6. Check Your Timing
Certain times are more expensive to promote your content than others. This is true not just at obvious times — like black Friday — but can also vary industry to industry. It can be hard to determine what the trends around prices and times of week or year are, but we’ve done the work for you.
Check out our breakdown of the most expensive times to advertise on Instagram, and then ask yourself:
- When you’re evaluating the cost of your ads, do you take into account what time the ads are running?
- Are you aware of regional events and holidays that could drive Instagram ad prices up?
- Could you be targeting people at less expensive times without changing your messaging, or are most of your campaigns around high-cost times?
If you don’t know the answers to these questions, it’s really hard to determine if you’re overpaying for your ads.
A breakdown of CPC by month shows that you’ll probably be spending more on ads over the summer.
You need to know whether or not there is a general trend in upward ad cost in order to be able to evaluate your own ad spend, and you need to take into account different types of campaigns and events when you’re trying to figure out if you’re overpaying.
Answer these questions about your ad campaigns before you make up your mind about whether you’ve overpaid.
Bonus: Don’t Just Stick To In-Feed Ads
You should use all types of branded Instagram content to ensure that your only efforts for reaching out aren’t just through ads.
Instagram stories and Instagram live, for example, can be great tools to promote without jumping through all the same hoops of building an ad campaign.
When you’re promoting your brand authentically and growing your following by interacting with other users, having killer curated content on your own page and driving traffic to your Instagram, you’ll end up with a lower overall spend on Instagram ads.
Why? Because you’re digging into what your customers want to see out of your Instagram, and curating a following that will bring in attention naturally.
Define Your Own ROI
Now that you know how to evaluate the costs of your Instagram ads, it’s time for you to determine, once and for all, whether or not you’re overpaying for Instagram ads on any given campaign.
The key? Define your own ROI.
For some campaigns, like massive holiday sale campaigns, you might be willing to spend more. For new product launches, you might be willing to take a gamble on a new target audience. But for other campaigns, you might decide that your budget is lower and you’re going to squeeze out every cent you can.
Now it’s your turn. Go check your Instagram ad spend, put our suggestions into practice and let us know your improvements in the comments below!