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  • Writer's pictureAustin Lynch

Are Instagram Ads Worth It? A Comprehensive Analysis


are instagram ads worth it high beam marketing

In today’s digital advertising ecosystem, businesses like yours have a lot of options for where to run ads. One platform that has gained immense popularity is Instagram.


With its visually appealing interface, and more than 2 billion monthly active users (MAU), Instagram presents an exciting opportunity for businesses to showcase their products or services. But the question always comes up . . . “Are Instagram ads worth it?”


Why should you consider advertising on Instagram?

Instagram is not just a platform for sharing beautiful photos; it's also a powerful advertising tool. Here are a few reasons why businesses should run Instagram ads.


Massive User Base

Instagram boasts a massive and diverse user base. With users spanning various demographics, you can effectively target your desired audience. Like I said earlier, Instagram has 2 billion MAUs. I bet your ideal customer spends time on the platform.


Visual Appeal

Instagram is inherently visual, making it an ideal platform for businesses with visually appealing products or services. High-quality videos and imagery can catch your audience's attention.


Engagement

Instagram users are highly engaged. They like, comment, and share content regularly, providing plenty of opportunities for interaction with your brand.


Integration with Meta

Instagram ads are managed through the Meta Ads Manager, allowing for seamless integration with Facebook and other advertising campaigns.


Advanced Targeting

The Meta Ads Manager offers advanced targeting options on Instagram, allowing you to reach specific demographics, interests, and behaviors, ensuring your ads are seen by the right people.


Stories and Reels

Instagram's Stories and Reels features provide creative ways to engage with your audience, allowing you to tell your brand's story in a more dynamic and interactive manner.


The Cost of Instagram Advertising

While Instagram advertising offers a range of benefits, we have to consider the costs involved. The cost of Instagram ads can vary widely based on several factors.


Ad Type

Instagram offers various ad formats, including video ads, image-based ads, carousel ads, and more. The cost will depend on the type of ad you choose.


Audience

The size and targeting specificity of your audience can greatly influence the cost of your Instagram ad campaign. Highly targeted audiences may be more expensive because you are forcing the platform to prioritize a more specific bid over someone else’s broad bid (in other words, you’re giving the platform more restrictions when running your ads).


Ad Quality

High-quality, engaging ads perform better and can lower your overall advertising costs.


Bidding Strategy

Your bidding strategy, whether it's based on a cost per result, a cost per impression (CPM) or a cost per click (CPC), will impact your overall ad spend. Awareness and Reach strategies typically have lower rates than strategies with a more specific goal (such as sales or leads).


Ad Frequency

Overexposure of the same ad to the same audience can result in “ad fatigue” (lower engagement and increased costs). Effective ad rotation and audience management are crucial.


Measuring the ROI of Instagram Ads

Determining the worth of Instagram ads for your business ultimately comes down to measuring the return on your investment. Here are some key metrics to consider when evaluating the effectiveness of your Instagram advertising campaigns.


Conversion Rate

Keep a close eye on the number of users who took the desired action after clicking on your ad, such as making a purchase or becoming a lead. Two big factors that influence the conversion rate is the quality of the clickers (are they qualified to buy your product or service) and the experience post-click (does the website make it harder or easier for the clicker to take the desired action?).


Click-Through Rate (CTR)

Measure how many users clicked on your ad compared to the total number of impressions. A higher CTR indicates an ad that is higher in quality. Do some research to discover what a benchmark CTR is for your industry, and try to beat it!


Cost Per Acquisition (CPA)

Calculate the cost of acquiring a new customer through your Instagram ad campaign. Ensure that your CPA aligns with your budget and revenue goals.


Return on Ad Spend (ROAS)

ROAS measures the revenue generated for every dollar spent on advertising. A positive ROAS indicates a profitable campaign.


Average Order Value (AOV)

AOV measures the average amount of revenue generated by each sale driven by your campaign. This number might change based on sales you are running, but we should strive for a higher AOV when possible.


Ad Engagement

Analyze likes, comments, shares, and other forms of engagement to gauge how well your ads resonate with your audience. Don’t hesitate to respond to comments, which could generate even more engagement - lowering your costs.


Customer Lifetime Value (CLV)

Consider the long-term value of acquired customers to assess the overall impact of your Instagram ads on your business. Comparing the CPA to the CLV is a common practice when evaluating the impact of an ad campaign.


TL;DR Run Ads on Instagram

Digital advertising is always changing. Instagram (much to the chagrin of TikTok) is still a power play in the digital advertising space. At the end of the day, the question of whether Instagram ads are worth it or not for your business ultimately depends on your specific goals, target audience, and budget.


To make the most of Instagram advertising, it's essential to develop a well-thought-out strategy, create visually captivating content, and continuously analyze your performance metrics. By doing so, you can harness the power of Instagram ads to reach and engage with your audience effectively.


As you begin navigating the Meta Ads Manager, be careful! There are tons of tricky options that, when used, can cause your ads to run in ways you might not have intended. This leads to “ad waste” and your precious dollars disappearing without much to show for it. We see this with almost every ad account we take over, and that is why we began offering free advertising audits.


If you're already running Instagram ads, or any other digital advertising, and want a second set of eyes to make sure everything is running the way you want, click the button below to schedule a discovery call to see if you qualify for our free digital ad audit. We run Instagram ad campaigns every day and average over a 6x ROAS with Meta Ads (Facebook and Instagram) alone!



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