#1 TikTok Ads Spy Tool

A Better Way to Make TikTok Ads Dropshipping & TikTok For Business

  • Find TikTok winning products & TikTok dropshipping ads.
  • Analyze TikTok advertisers
  • Get the Latest TikTok Shop Data.
Try It Free

Maximizing Results: Instagram Ad Budget Tips

Published on: November 17 2023 by LYFE Marketing

Maximizing Results: Instagram Ad Budget Tips

Table of Contents

  1. Introduction
  2. Why Instagram Ads are Worth it for Your Business
  3. The Cost of Instagram Ads
    • Factors that Affect Instagram Ad Costs
    • Average Cost per Click
    • Considering Your Goals
  4. Recommended Starting Budget for Small Businesses
  5. Setting Up Instagram Ads in the Facebook Business Manager
  6. Utilizing Custom Audiences and Lookalike Audiences
  7. Instagram Ad Best Practices
    • A/B Testing
    • Using Video Ads
    • Making Your Ad Look Native
    • Utilizing Vertical Video Ads
  8. Conclusion


In today's digital age, businesses are always looking for effective ways to increase their online presence and drive sales. One popular platform for advertising is Instagram, with its billion monthly active users. In this article, we will discuss why Instagram ads are worth it for your business and delve into the cost of running these ads. We will also provide recommendations for a starting budget for small businesses and guide you through the process of setting up Instagram ads in the Facebook Business Manager. Additionally, we will explore the benefits of utilizing custom audiences and lookalike audiences to reach your target market more effectively. Lastly, we will discuss some best practices for creating successful Instagram ads that generate a high return on investment (ROI).

Why Instagram Ads are Worth it for Your Business

Instagram has become one of the best platforms for advertising your business, especially if you sell products or services online. There are several reasons why Instagram ads are worth considering for your marketing strategy:

  1. Advanced Targeting: With over 1 billion monthly active users, Instagram allows you to leverage Facebook's advanced targeting capabilities to reach your desired audience effectively. Whether you want to target specific demographic attributes or create custom audiences based on app activity, website visits, or engagement on social media, Instagram ads provide you with the tools to reach the right people.

  2. High Engagement Rates: Despite changes to Instagram's algorithm, the platform still boasts impressive engagement rates. Stories, in particular, have become hugely popular, with 500 million people using stories daily. Additionally, one in five stories receives a direct message from viewers. By capitalizing on this high engagement, businesses have a greater chance of connecting with potential customers.

  3. Video Prioritization: Instagram, like other online platforms, is increasingly prioritizing video content. Videos, especially vertical videos, are receiving higher engagement rates compared to single image posts. By utilizing vertical video ads, you can maximize your reach and provide a more immersive experience for your audience.

  4. Data Integration: As Facebook owns Instagram, you can access and utilize data from both platforms. The extensive targeting options and valuable insights derived from this data allow you to refine your marketing strategy and improve the efficiency of your ad campaigns.

The Cost of Instagram Ads

When it comes to running Instagram ads, it's important to understand the factors that can affect the cost. Several elements influence the overall cost, including the type of goal you set for your ads, ad placements, audience targeting, and the time of year. It's also worth noting that the average cost per click (CPC) can vary depending on your industry and the type of products or services you offer.

Factors that Affect Instagram Ad Costs

  1. Ad Goal: Instagram offers various objectives for your ads, such as increasing brand awareness, generating website traffic, or driving conversions. Different goals may have varying costs associated with them, depending on the level of competition for that particular objective.

  2. Ad Placements: Instagram offers several placements for your ads, including feed posts, stories, and reels. The cost of each placement can differ, and it's essential to consider which option will yield the best results for your business.

  3. Audience Targeting: The size and desirability of your target audience can influence the cost of your ads. Certain demographics or specific audience attributes may increase competition among advertisers, driving up the ad costs.

  4. Time of Year: Ad costs on Instagram tend to spike during peak seasons, such as the holiday season. Increased advertising competition during these periods can lead to higher costs. It's important to plan your budget accordingly and consider adjusting your advertising efforts during these peak periods.

Average Cost per Click

The average cost per click for Instagram ads can range anywhere from $0.50 to $3.50, depending on various factors such as industry, ad quality, audience targeting, and the desired objective. However, it's important to note that these figures are general estimates and can vary significantly from one business to another.

Considering Your Goals

Different objectives may have different associated costs. For example, acquiring leads or driving conversions may require a higher budget compared to simply increasing brand awareness. It's crucial to align your budget with your goals and determine which objectives offer the highest value for your business. Evaluating the potential return on investment (ROI) for each goal will help you make informed decisions about your advertising budget.

Recommended Starting Budget for Small Businesses

As a small business, it can be daunting to allocate funds to advertising, especially without the guarantee of immediate results. However, Instagram ads offer affordability and flexibility, making it feasible for small businesses to advertise and connect with their target audience. While there is no one-size-fits-all budget recommendation, allocating around $750 per month for your Instagram ads is a good starting point. This budget allows for consistent ad exposure and can yield results relatively quickly for most small businesses. However, it's essential to monitor the performance of your ads and make adjustments as needed.

Setting Up Instagram Ads in the Facebook Business Manager

To run ads on Instagram, it is recommended to utilize the Facebook Business Manager. This platform provides a seamless integration between Facebook and Instagram ads, allowing you to manage and optimize your campaigns effectively. Here's a step-by-step guide on setting up your Instagram ads using the Facebook Business Manager:

  1. Create your campaign and ad set: In the Facebook Business Manager, click on "Create" and follow the on-screen instructions to define your campaign objective and set up your ad set.

  2. Choose your ad format: Select your preferred ad format, such as single image or video, carousel, or collection. Upload your media or create new content based on your objectives and target audience.

  3. Define your audience: Utilize Facebook's advanced targeting options to narrow down your audience based on demographics, interests, behaviors, or custom audience segments. This will help ensure your ads reach the most relevant audience.

  4. Set your budget and schedule: Determine your daily or lifetime budget for your Instagram ads. You can also choose your desired schedule for running your ads, allowing you to control when your ads are displayed.

  5. Publish your ad: Review your ad preview and make any necessary adjustments. Once you are satisfied with your ad, click "Publish" to start running your Instagram ads.

Utilizing Custom Audiences and Lookalike Audiences

One of the most powerful tools provided by Instagram ads is the ability to leverage custom audiences and lookalike audiences. Custom audiences allow you to target individuals who have interacted with your business in various ways, such as through your app, website, or social channels. By uploading customer lists or utilizing pixel tracking, you can create custom audiences that are highly relevant to your business.

Lookalike audiences, on the other hand, enable you to find new people who share similar characteristics and behaviors with your existing customer base. By creating a lookalike audience based on your custom audience, you can expand your reach and target individuals who are more likely to be interested in your products or services.

To set up custom audiences and lookalike audiences, follow these steps:

  1. Access the Facebook Business Manager and navigate to the "Audiences" section.

  2. Create a custom audience by selecting the appropriate engagement type, such as website visits, social media engagement, or customer lists. Specify the time frame and engagement levels to refine your audience.

  3. Once you have established a custom audience, you can create a lookalike audience based on this source. Select the custom audience as your source and choose the desired audience size using the sliding scale. The larger the audience, the broader the reach, but the less closely they resemble your source audience.

  4. Give your audience a name and description to help you identify it easily for future campaigns. Click "Create Audience" to generate your custom or lookalike audience.

By utilizing custom and lookalike audiences, you can improve the targeting precision of your Instagram ads and increase the likelihood of reaching individuals who are more likely to convert into customers.

Instagram Ad Best Practices

Creating effective Instagram ads requires following certain best practices that can maximize your ROI. Here are some key strategies to consider:

1. A/B Testing

A/B testing entails running different variations of your ads to determine which elements resonate best with your target audience. By testing different ad formats, visuals, copy, and targeting, you can identify the most effective combination and optimize your campaign accordingly.

2. Using Video Ads

Video ads consistently outperform static images across various platforms. Instagram's algorithm prioritizes video content, making it a highly effective format for capturing your audience's attention. Incorporating video ads into your Instagram ad strategy can lead to higher engagement and better overall campaign performance.

3. Making Your Ad Look Native

Creating ads that blend seamlessly with the user's browsing experience is essential for capturing their attention. Ensuring your ad looks native to the platform will increase the likelihood of users engaging with your content. Consider using high-quality visuals, user-generated content, and concise yet compelling copy that aligns with the overall aesthetic of Instagram.

4. Utilizing Vertical Video Ads

To fully capitalize on the popularity of Instagram Stories and reels, leverage vertical video ads. Vertical videos provide a full-screen viewing experience that occupies the user's entire screen, ensuring maximum impact and engagement. Furthermore, Instagram offers several engagement options within vertical videos, such as linking to external websites or incorporating shopping stickers and tags.

By implementing these best practices, you can optimize your Instagram ads and achieve a higher ROI while effectively reaching your target audience.


Instagram ads offer small businesses a valuable opportunity to expand their reach, connect with their target audience, and drive sales. By understanding the factors that influence ad costs, setting appropriate budgets, and leveraging advanced targeting options, businesses can effectively advertise on Instagram without breaking the bank. Custom audiences and lookalike audiences further enhance the effectiveness of Instagram ads by allowing businesses to reach highly relevant and potentially interested individuals. By following best practices such as A/B testing, utilizing video ads, creating native-looking content, and incorporating vertical video ads, businesses can optimize their Instagram ad campaigns and achieve the best possible ROI.

Now that you have a comprehensive understanding of Instagram ads and how to leverage them for your business, it's time to implement these strategies and start reaping the benefits of this powerful advertising platform.

And remember, if you have any further questions or need assistance with your Instagram ads or digital marketing strategy, our team at Life Marketing is here to help you succeed.


  • Instagram ads provide an effective way for businesses to increase their online presence and drive sales.
  • Instagram offers advanced targeting capabilities and high engagement rates, making it an excellent platform for advertising your business.
  • The cost of Instagram ads can vary based on factors such as ad goals, placements, audience targeting, and the time of year.
  • A recommended starting budget for small businesses is around $750 per month, allowing for consistent ad exposure and relatively quick results.
  • Setting up Instagram ads in the Facebook Business Manager provides seamless integration and efficient campaign management.
  • Custom audiences and lookalike audiences are powerful tools for reaching relevant and interested individuals.
  • Best practices for Instagram ads include A/B testing, video ads, native-looking content, and vertical video ads.


Q: How can I determine the effectiveness of my Instagram ads? A: To measure the effectiveness of your Instagram ads, analyze key metrics such as click-through rates, conversion rates, and return on investment (ROI). You can track these metrics using Facebook's reporting tools or third-party analytics platforms.

Q: Can I use the same ad for both Facebook and Instagram? A: While Instagram and Facebook ads share similarities, it's recommended to tailor your ads to each platform. By considering the unique user experience and visual styles of Instagram, you can create ads that resonate better with your Instagram audience.

Q: How often should I update my Instagram ads? A: Regularly refreshing and updating your Instagram ads can help maintain audience engagement and prevent ad fatigue. Consider updating your ads every few weeks or based on campaign performance indicators such as click-through rates or conversion rates.

Q: What type of content works best for Instagram ads? A: Visual content such as high-quality images, videos, and carousel ads tend to perform well on Instagram. However, it's essential to test different types of content and formats to determine which resonate best with your target audience.

Q: Can I pause or stop my Instagram ads at any time? A: Yes, you have full control over your Instagram ads, allowing you to pause, stop, or modify them at any time through the Facebook Business Manager. This flexibility enables you to adjust your advertising strategy based on campaign performance or changes in business objectives.

Start your free trial today!

Try Pipiads free for trial, no credit card required. By entering your email,
You will be taken to the signup page.