With over 1 billion monthly active users on Instagram and 2.9 billion on Facebook, it’s no surprise that businesses are turning to these platforms to reach potential customers. Instagram and Facebook ads can be powerful tools, but do they really cost the same to run? Let’s take a closer look.
The Basics of Instagram and Facebook Ads
Instagram and Facebook are both owned by Meta Platforms Inc. and integrate together, along with the Messenger and WhatsApp platforms. This means you can easily set up ad campaigns to run across Instagram and Facebook simultaneously.
There are several ad formats available on both platforms:
- Photo ads
- Video ads
- Carousel ads
- Stories ads
- Collection ads
The overall ad creation process is similar. You choose your campaign objective (awareness, consideration, conversion), target your audience, set a budget, and create your ad creative. Ad performance can then be monitored in Meta’s Ads Manager.
Instagram and Facebook Pricing Models
So if the ad formats and campaigns are the same, are the costs the same too? Not quite. Instagram and Facebook actually have different pricing models.
Facebook Ad Pricing
Facebook ads are sold through an auction process. Advertisers bid against each other based on the ad placement, audience, and competition. The cost per ad impression or action is known as the effective Cost Per Thousand impressions (eCPM) or effective Cost Per Action (eCPA).
Factors that affect Facebook’s ad pricing include:
- Your bid – The maximum you’re willing to pay per impression or action
- Ad placement – Where your ad appears on Facebook
- Audience targeting – Location, interests, behaviors, etc.
- Ad competition – How many others are bidding for the same placement and audience
Narrowly targeted ads tend to have higher eCPMs and eCPAs since you’re competing for a smaller audience pool. Broader targeting is generally more affordable.
Instagram Ad Pricing
Instagram uses an automated auction model for their ads as well. However, there are some key differences:
- You choose the maximum bid and optimize for cost per action goals, not impressions
- Instagram sets the minimum bids required to compete for each ad placement and audience
- The ad delivery optimization happens behind the scenes for you
Instagram takes over the heavy lifting and automatically sets bids to help you reach your campaign goals as cost efficiently as possible. You have less direct control compared to Facebook.
How Budgets and Bidding Impact Costs
Setting budgets and bids appropriately is key to keeping Facebook and Instagram ad costs affordable. Let’s look at some best practices.
Flexible Budgets
Budget too low on Facebook? You may lose auctions and miss out on valuable impressions and conversions. Budget too high on Instagram? You could end up overpaying as the algorithm optimizes for your goal.
Start with informed estimates but keep budgets flexible to optimize performance. Monitor cost per result (CPR) metrics and increase budgets if they remain low. Reduce budgets if CPRs climb too high and you’re overspending.
Smart Bidding Strategies
Facebook bidding can be complex. Consider leveraging their automated Conversions bidding that sets optimal bids for you based on value per conversion event. If going manual, bid conservatively then increase once you have conversion data.
For Instagram, choose a suitable CPA or ROAS target based on business costs and margins. Instagram will handle the actual bids needed to maintain that average.
Test, Test, Test
Regularly test new audiences, placements, creatives, and bids/budgets. Find the best combinations for your goals and cut what doesn’t perform.
Tools like Facebook’s A/B testing for ads can automate testing and optimization to boost results.
Average Costs: Instagram vs Facebook Ads
Understanding average ad costs helps set expectations. However, your true CPRs depend on many factors like audience, niche, competition and more.
Average Facebook Ad Costs
| Ad Format | Average Cost per 1,000 Impressions |
|---|---|
| News Feed Photo Ad | $7.19 |
| News Feed Video Ad | $25.80 |
| Marketplace Ad | $6.37 |
| Stories Ad | $20.20 |
Source: WordStream
The Interactive Advertising Bureau found average Facebook CPMs tend to range from $5.43 (food and drink) up to $16.15 (retail).
Average Instagram Ad Costs
| Ad Format | Average Cost per Click |
|---|---|
| Photo Ad | $0.45 |
| Carousel Ad | $0.35 |
| Video Ad | $0.25 – $0.45 |
| Stories Ad | $0.18 |
Source: WebFX
Hootsuite found Instagram video ad CPCs average $0.30 across industries. Retail tends to be on the higher end around $0.45.
Which Platform is More Affordable?
Looking at those average costs, Instagram appears more affordable, especially for direct response and conversion focused marketing. However, keep these considerations in mind:
- Facebook offers more advanced targeting like custom audiences and lookalike audiences.
- Facebook has over 1 billion more monthly active users than Instagram.
- Not all businesses can drive conversions directly from Instagram ads.
If you have conversion tracking and targeting capabilities in place, investing in Instagram ads over Facebook ads may make sense.
For top-of-funnel brand awareness campaigns, Facebook’s massive reach and diverse targeting still can’t be beaten. Instagram is better suited for visual branding and interacting with a younger demographic.
Avoid Comparing vanity Metrics
Don’t get caught up in vanity metrics like cost per thousand impressions when comparing platforms. The CPM costs are apples and oranges until you factor in real business value per impression or click.
Instead, dig into the cost per conversion and return on ad spend (ROAS) for your business on each platform. Look beyond CPCs and CPMs to make informed Instagram vs Facebook budget allocation decisions.
Tips to Reduce Costs on Both Platforms
Here are some tips to help control ad costs on Facebook and Instagram:
Refine Your Targeting
Leverage interests, behaviors, demographic filters, and lookalike audiences to hone in on your ideal potential customers. Avoid overbroad targeting that wastes spend.
Test Ad Creative
Try different ad copy, visuals, layouts, videos, and calls-to-action. Higher performing ads tend to have lower costs per conversion.
Monitor Your Ad Accounts
Check in regularly on CPRs and nix any obvious underperformers. Make small optimizations often.
Use Bidding Automation
Let Facebook’s automated conversions bidding and Instagram’s optimization algorithm minimize costs where possible through smarter bids.
Set Effective Budgets
Scale budgets up and down to find the right balance between volume and costs. Don’t radically overspend.
Timing is Key
Pay attention to dayparting. You can often decrease costs by avoiding peak times and focusing budgets during lower-competition periods.
Should You Use Instagram, Facebook, or Both?
Most marketers will get the best results using both Instagram and Facebook ads as part of a cross-channel strategy. However, here are some guidelines on choosing a focus:
Prioritize Instagram If:
- You’re selling visual or lifestyle-focused products
- Your target audience skews millennial
- You want low-funnel conversions and sales
- You have a limited budget
Prioritize Facebook If:
- You’re focused on brand awareness or reach
- You want to use advanced custom audiences
- Your business has high order values or profit margins
- You target older demographics
Use Both If:
- You have the budget to invest in both
- You want to reach users across multiple platforms
- Your business caters to a wide target audience
The Bottom Line
While Instagram ad costs are often lower on a CPC or CPM basis, true values depend on your goals, audience, and offers.
For direct response campaigns, Instagram provides an affordable and easy way to drive conversions. For top-of-funnel efforts with flexible budgets, Facebook’s advanced targeting and massive reach can justify the higher costs.
As with most marketing, having the right strategic approach is more important than penny pinching on rate comparisons. Focus on leveraging the unique strengths of Instagram and Facebook ads to get the results you want.
With some testing and optimization, you can keep both platforms affordable. Monitor business value metrics, not just vanity metrics like CPCs and CPMs. Adjust targeting and budgets based on performance data.
The bottom line? Yes, Instagram ad costs are generally lower, but Facebook still pulls its weight for conversions and awareness. Use these guidelines to pick the right platform for your business and marketing objectives.