Advertising on Instagram: How Much Does It Cost in 2025?

Before we get into the nitty-gritty, let’s go over the types of ads you can create:

1. Boost Existing posts – This is simply paying to promote posts you’ve already curated on your page, which is the quickest and cheapest way to get ads running.
2. Create Ads in Meta Ads Manager – These ads look similar to boosted posts, but the content is designed specifically for advertising, which means you’ll have more formatting and targeting customization options.
3. Create Ads on Facebook – Because Facebook and Instagram are both owned by Meta, you can link your business pages on both platforms and create Facebook ads that appear across both.

Boosting old posts and expanding your Facebook ads to Instagram are both great ways to recycle content for growth purposes. However, you’re limited on what you can do with these ads. If you’re looking for advanced targeting and tons of placement options, I’d recommend using Meta Ads Manager. 

You can create ads to appear in the following places, depending on the objective of your ad campaign:

• Feed, Story, and Reel posts – These appear naturally as users scroll through content from accounts they’re following.
• Profile feed – A user can see related ads as they’re scrolling through posts on a specific profile page.
• Explore page – This page shows users new content related to their app usage and interests.
• Shops – Instagram Shopping ads will appear when users browse Instagram storefronts.
• Search – When a term is entered into the search bar, matching ads will appear alongside organic search results.

The amount you’ll need to pay for your ads depends on three factors: your initial bid, the value of your ad, and how successful Instagram predicts your ad will be. Combined, these make up your total value score.

Basically, the higher an ad’s total value score, the more visible it will be, and the less an advertiser will have to spend to achieve good results.

Let’s dive into these areas in more detail…

#1. Your Initial Bid

Instagram uses a bidding model to pay for ads, meaning you place a bid based on the action you desire users to take. The main bidding options are:

• Cost per click (CPC) – This involves any interaction with the post, such as the number of likes, shares, saves, comments, profile visits, and link or CTA clicks.
• Cost per action (CPA) – This tends to be the cost per acquisition, such as receiving a sale or a sign-up through your ad.
• Cost per thousand impressions (CPM) – The cost you’ll pay for every 1,000 people that see your ad.

The way you bid should be based on the type of goals you want to achieve. For instance, if your goal is to increase your brand awareness, CPC would be a useful metric to measure interaction levels on your ads.

#2. The Relevance of Your Ads

Instagram wants its users to enjoy their time scrolling so that they stay on the app for as long as possible, and they don’t want ads to affect this. This is why it prioritizes connecting users to ads that are the most relevant to their interests.

Your ad relevancy score is determined by how people react to your ad. Positive reactions – liking, saving, clicking, and commenting, for example – will boost your score. Equally, if viewers hide your ad or scroll past without engaging, your score will be lower.

In essence, the higher your ad relevancy score, the further ads will reach, and the less money you’ll have to spend.

To improve your Instagram ad relevancy score, you should encourage interaction with your ads by creating engaging visual content. Ways to do this include:

• Use compelling visuals – High quality images and videos that show off your product’s unique features or capabilities will entice your audience to take further action.
• Utilize user generated content (UGC) – A great way to make people engage with your ads is by sharing UGC that helps them envision using your product themselves.
• Carousel posts – These are a group of posts that users will have to scroll through, therefore keeping them looking at, and engaging with, your ads for longer.
• Automatic optimization – For Stories and Reels, Instagram can assess your ad and automatically optimize its formatting. This means it’ll generate different versions of your ad – depending on your audiences’ preferences – and present viewers with the one they’re most likely to interact with.

#3. Estimated Action Rate

Estimated action rate is the rate at which Instagram thinks the audience will take action based on your ad. This is slightly trickier to control than your relevancy score since it’s an estimation of something that hasn’t happened.

But it’s not a guess at all. In fact, Instagram looks at several factors to make this estimation:

• Past data about the interaction rates from your old and current campaigns
• Targeting data that you’ve added about your target audience
• Predictive analytics which assess past data against your target audience and decide the likelihood of them interacting with your post

The main factors influencing the amount you spend on your ads are its relevancy score and estimated action rate. However, your bid will fluctuate based on supply and demand, so there are certain instances where it’ll be higher:

• Audience size – The more refined your targeting is, the higher the costs. However, honing in on an accurate audience will increase the success of your ads.
• Time of year – The amount of competition you’ll face will fluctuate throughout the year. Expect that you’ll need to spend more money during peak times, such as the holidays.
• Industry – Certain industries will utilize ads more frequently than others, meaning the level of competition is higher.

The good news about Instagram’s slightly complex advertising style is that, by optimizing your ads effectively, you can lower the amount you spend. I’ve provided optimization tactics throughout this article, but additional tips to lower the cost of your Instagram ads include:

• Use automatic bidding – If you’re a beginner, automatic bidding is a great way to get a feel for the correct amount to bid. When enabled, Instagram will constantly assess and adjust your bid – in line with your budget – to ensure that you’re not overspending.
• Enable automatic placement – Similarly, automatic ad placement means that Instagram will change the places your ad is shown to maximize your results for the lowest cost.
• Refine your targeting – While precise targeting may increase your initial spend, you’ll be more likely to reach the relevant target group faster. This should lead to a higher click-through rate. In turn, this increased interaction will be recognized and rewarded by Instagram’s algorithm.
• Optimize your landing pages – Users won’t stay engaged with an ad for long, and if they click through to purchase your product, you should have an optimized product page. If you’re looking to gain sales for a specific product, make sure the page has compelling product photos and informative product descriptions. Plus, use CTAs to make it as easy as possible for them to complete the purchase.

With 2 billion monthly active users, chances are that your target audience is active on Instagram. When used correctly, you can leverage advertising to make money on Instagram – and a lot of it. You’ll benefit from Instagram ads in the following ways:

• Advanced targeting options – In addition to generic targeting levers, Instagram also offers advanced targeting options. This includes creating custom audiences for retargeting, such as viewers who’ve already engaged with your ads. This means you’ll be able to consistently focus on the right people, however niche your industry.
• It creates a level playing field – Instagram’s total value score calculation means that small businesses still have the opportunity to reach widely with their ads by focusing on quality and relevance – even on a small budget.
• Increased visibility – the level of choice Instagram provides in the placement and targeting of your ads means that you’ll be able to be seen in almost every part of the app and target every type of user.

Like all marketing methods, whether running Instagram ads for your business is worth it depends on one key factor – real ROI.

Ultimately, the worthiness of Instagram ads depends largely on whether you can convert what you pay into a profit that outweighs the original investment. For example, even those who are able to generate a low CPC may find that ads aren’t worth the investment if they’re unable to convert those clicks into real sales.

However, with a huge, active user base and the ability to get super niche with your targeting, there are few businesses that couldn’t positively benefit from Instagram advertising – when done correctly. 

So, how much is it to advertise on Instagram? As you can see from this article, it’s difficult to pinpoint. Ultimately, the only cost factors within your control are your overall budget and your bid. After that, it’s down to Instagram’s algorithm to decide how far your ads reach, and whether you need to increase your spend.

You should start by bidding around the average cost per action, and focus on creating relevant, engaging ads that your audience is likely to interact with. From there, you can monitor whether your ads are achieving their goals, and adjust your ad spend accordingly.

• Considering which social media platform is best for your business? Check out our article comparing TikTok vs Instagram for business to help you decide!