How to Set an Instagram Ad Budget: The Ultimate Guide

Clara Alex
Combin Blog
Published in
7 min readOct 15, 2019

Here’s a piece of bad news. Nobody can tell you what or how to set your Instagram budget, the same way nobody can tell you how to fall in love. However, unlike falling in love, Instagram has a landscape that you can understand and exploit. Rather than tell you how to set your Instagram budget, this article offers you the ultimate guide to how the Instagram advertising platform works so that you may understand and exploit it. This article will help you get the most out of the money you spend on Instagram advertising.

Instagram and Facebook Manager — Use Facebook’s Demographics To A Degree

As you know, Facebook owns Instagram, and Instagram is integrated with the Facebook Ad Manager. This means you can use the information that Facebook has at its fingertips to help you with your Instagram videos.

You need to use and consider Facebook’s demographic information to be useful, if not a little suspect. It is useful because it will help you target as good as mostly any affiliate program, and it does it very effectively. For example, if you are aiming for people in a certain area, then your Instagram ad will get you there.

Where the information is a little “suspect” is demographic information concerning ages. Facebook will tell you that its audience is around half teenagers and half adults of 20yrs or older. However, all other demographic analytics suggest it is far more heavily weighted towards younger teens and tweens. Part of the problem is that Facebook wants to present itself as a place for adults when it is more suited to children (Hence the reason you read such dumb and childish posts on there). The other part of the problem is that you have to be 13yrs or older to use Facebook, so kids as young as 10 years old are lying about their age, usually putting themselves in their older teens.

Budgeting Tip — If you have a location-based marketing budget, then weight your budget towards Instagram because it can help you target locals with its Facebook demographics tools.

Instagram Is More Heavily Weighted With Adults

It doesn’t have the adult pull that YouTube does, but in terms of demographic percentages, Instagram may have more than 35% more adult members than Facebook. Obviously, these are not the numbers that Facebook is touting, but your own analytics will show far more engagement from people in the 20yrs+ bracket when advertising on Instagram.

Budgeting Tip — If you are pushing for a 20yr — 40yr demographic, then test your penetration with Instagram, and if you get results, then start scaling up and budgeting more.

Forget Pinterest, Imgur and SnapChat

Since you have probably been looking for advice on Instagram marketing and Instagram promotion, you have probably come across many articles where people claim they have gained thousands of website visitors from Pinterest, Imgur or SnapChat. No matter what you have read, the free promotional methods and the paid promotional methods used for Instagram are completely different from what you use on Pinterest, Imgur, and SnapChat. Those platforms allow people to promote with what marketers call a disruptive approach.

A disruptive approach is where an ad is supposed to grab attention to make somebody stop to look. The disruptive method is like seeing a car crash on the highway and slowing down to look. Instagram ads do not work in that way, and you will fail miserably if you take the same disruptive approach that you use with Pinterest, Imgur or SnapChat.

The aim of Instagram ads is to “Look” like a regular post in a feed. In fact, many people skim by the ads almost as if they were looking at other people’s posts. This may seem inefficient, but Instagram publishes a high number of ads, and this is one way in which they make Instagram ads less annoying.

Budgeting Tip — Invest in posts that could pass for regular Instagram posts. Pay designers to use shock tactics, and you will waste your money.

An Ad Click Will Cost You $0.70 to $0.80 Each

The $0.70 to $0.80 spend range is the average cost of an Instagram click-based ad according to Instagram’s own figures that were analyzed by AdEspresso. If you check out AdEspresso’s numbers, you need to treat them as darn-near faulty, for reasons that will be explained in the next section.

The primary reason why the average spend is between $0.70 and $0.80 is because that is literally the mid-market price. Fluctuations do not happen throughout the year. For example, winter isn’t more expensive than summer. Also, when there are fluctuations, they are always temporary and prices always normalize to between $0.70 and $0.80 because, again, that is the mid-market price.

Budgeting Tip — Do not veer too far from between $0.70 and $0.80 when you set your click/bid prices. If you are frequently paying more and you are still not getting conversions, then you need to radically change your approach.

Understanding Faulty Figures And Getting Under The Skin Of Click-Price Analytics

If you are going to fully read, rather than skim, any section, then this is the one you need to read in full. A link AdEspresso was begrudgingly shared earlier, but even though it seems correct, much of what you read via statistics is very faulty and can lead to very incorrect conclusions. This isn’t just about AdEspresso it is about all forms of analytics (except your own that you gather yourself). The reason you need this article is because others will not explain why these numbers are faulty.

The numbers are faulty because they do not give the full story. After all, what can one tell from the fact that click prices for 13–17-year-olds are really low and click prices for people 65+ are really high?

Click prices for young people, between 13 and 17 are very low. This is because people in that demographic are overly eager to click and yet are less likely to buy. The supply of clickers is high and supply of actual buyers is low. Companies do not have to compete very hard for a group that clicks all the time, and there are also plenty of 13 to 17-year-olds to click, so the price of clicks is driven downwards organically.

Click prices for people aged 65+ are very expensive because there are very few people aged 65+ who are regular Instagram users, especially when compared to all other age brackets below 65yrs. Plus, the older somebody is, the less likely they are to click ads on a whim. This means the supply of clicks is low, and yet there are many companies vying for clickers, so prices are pushed upwards as companies compete with each other.

Budgeting Tip — Supply and demand happen with Instagram too. If there are fewer clickers and many competitors, then consider a different form of advertising because your ads may be expensive.

What About Third-Party Companies?

If you were looking for help from outsiders, then you should first try gathering a following of around 100, and you should maybe try running your own campaign first and setting your budget for a smaller campaign. Do this so that you can learn the system a little so that you may create suitable and attainable goals.

Once you are comfortable with Instagram and its marketing platform, you need to come up with your goals and targets, and then contact a company like Combin. Explain your goals, explain what you have done, and come up with a growth strategy.

The amount you pay and the amount you budget is up to you. If you want a slow and gradual campaign, then take up a low-impact low-cost stance with your third party company. If you want a lot of impact and lots of attention, then draw funding from a company like Lendgenius and invest it in a high-visibility campaign. The same approach should be taken if you have a time-sensitive campaign where you need lots of attention right now.

Budgeting Tip — A slow and gradual campaign is often cheaper but will take a lot longer. If you want fast results, then plan a large budget.

Conclusion — Measure Your ROI And Adjust

In the end, your initial budget will be meaningless. With all the planning in the world, you are going to start your campaign (either you or your third-party marketer), and you are going to see conversions. You are going to hone your advertising skills, and you are going to start making an impact. If you are smart, you will measure your return on investment (the conversions you get for the costs you pay), and you are going to adjust your budget and your campaign accordingly. In the end, it will be a balancing act where you improve your ROI on one hand and improve your market impact on the other.

Written by Mónica Rodríguez, a writer, art historian, and editor at LendGenius. She specializes in Art History, Art Conservation, History, Literature, Finance, Tech, Wellness, and Travel. In her free time, she’s usually roaming the halls of the museum or the local bookstore surrounded by stacks of books.

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Clara Alex
Combin Blog

Managing Editor at Kill the DJ. Content strategist in audio tech companies. Write about music, AI in audio, podcasting, and all things audio.