Why Instagram Sponsored Ads Make Business Sense (2023)


Why Instagram Sponsored Ads Make Business Sense (1)

Why Instagram Sponsored Ads Make Business Sense (2)


Last Updated: May 26, 2021

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Instagram is, without a doubt, one of the most powerful platforms for marketing.But Instagram’s marketing potential is both a blessing and a curse.Why? Currently, the platform hosts over 25 million business accounts, and all of them fight for the attention of Instagram users.

As a result, it’s quite a challenge to promote a business on Instagram.However, it doesn’t mean that you should immediately give up and click away, because we want to talk to you about something that can potentially give you the advantage to beat the competition.This advantage is Instagram sponsored ads.

Of course, incorporating Instagram ads involves investment and a bit more effort on your part. And it’s completely natural to doubt if this is the right path for you.But before we discuss sponsored ads and why they make sense to your business, let’s explore the overall marketing potential of Instagram ads and general types of ads you can create on this platform.

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Marketing Potential of Instagram Ads

In general, Instagram ads are quite popular among advertisers.According to the statistics roundup by Backlinko, over 2 million advertisers actively use Instagram.

You might think that even though so many advertisers are using this platform to promote products, it doesn’t necessarily mean that it’s the right choice for you.Well, if you take a closer look at other Instagram stats, you will also notice that Instagram makes a lot of sense as an advertising platform:

  • Instagram has over 1 billion monthly active users.
  • over 80% of these users follow at least one business.
  • 72% of users say they bought a product after seeing its promotion on the app.
  • Over 150 million people use Instagram to communicate with businesses.
Why Instagram Sponsored Ads Make Business Sense (3)

This makes Instagram the second largest platform for advertisers after Facebook. And, since Facebook acquired Instagram, its marketing potential is only expected to increase in the upcoming years.

Talking about Facebook, since Instagram became a part of this platform, all advertisers can now run ads with Facebook Ads Manager’ media kit, which not only allows them to right the same ads on both platforms but also get access to:

  • Better campaign customization
  • Diverse formatting
  • Broader opportunities for targeting

So, from the standpoint of marketing, Instagram has a great potential for outreach, giving you a higher chance that your target audience will notice you since so many people purchase products that they discover through this platform.You can easily integrate your Instagram feed on yourwebsite using Jetpackto further amplify the outreach.

Why Instagram Sponsored Ads Make Business Sense (4)

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Types of Instagram Ads

Since in the previous section we started talking a bit about creating Instagram ads with Facebook Ads Manager, let’s explore, which types of Instagram advertising you can do in general.

In Instagram’s media kit there are two main varieties of ads:

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  • Promoted ads
  • Sponsored ads

In the first case, Instagram allows you to promote posts that already have a good engagement to get more attention and reach more people. With this option, you don’t have to spend too much time developing new content.

On the other hand, when we talk about sponsored posts, you can either repurpose the content that you already create or create new content from scratch.There are no differences in creating Instagram ads when it comes to content. A sponsored or a promoted ad can be posted on Stories, as well as on your account as a picture or a carousel.

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What’s the difference then? The difference is in targeting and reach.Sponsored posts offer more opportunities for targeting and can be engaged in a variety of purposes. This means that with sponsored ads, you will be able to reach more people than with promoted ads.

Besides, you can’t use promoted posts for retargeting.So, if you decide to invest in Instagram ads, consider sponsored posts as your main strategy, and promoted ads as a from-time-to-time investment to keep your engagement rates high.Thus, let’s continue talking more about sponsored ads since they will most likely be your primary investment when it comes to Instagram advertising.

How Much Will It Cost You?

Now, let’s talk money.We won’t beat around the bush and tell you the average price right away. Commonly, the average cost-per-click for Instagram sponsored ads ranges from $0.50 to $1.Sounds like something you can do, right? Hold on.

Before you make the final decision, let’s consider the components that make up the price for Instagram sponsored ads.Let’s take a look:

  • Ad format. The content that constitutes your sponsored ad also impacts the final CPC price. However, the most expensive types of ad formats, like single-photo ads, don’t usually perform as well as carousel or Story ads.
  • Targeting and ad placement. Some audiences are more expensive to target. These are so-called in-demand audiences, like e-commerce. For instance, if you choose to target 18-30-year-old women in the United States, and your business in the fashion industry, the price of a sponsored ad will go up to $4 per 1,000 impressions.
  • Seasonal factor. Seasonality usually impacts the final revenue, thus, this factor also impacts the final CPC price that you will pay for your sponsored ads on Instagram.

Indeed, Instagram ads usually cost more than Facebook ads ever will.

However, there is also a drastic difference between the engagement rates that these two platforms deliver. This means that, although you might pay more, you will also be more likely to get better results.What if you own a startup and don’t have the budget to run costly ads?You can still have Instagram sponsored posts in your media kit with the budget that you have.

Facebook, which is now Instagram’s parent company, says that they try to get businesses as many results as possible within the budget that they have. Businesses still remain in control of the ad campaign budget as well as their daily budget, and the initial bidding strategy.

Is Your Business Ready for Instagram Sponsored Ads?

So, let’s say you have the budget for an Instagram sponsored ads campaign and the content you would like to use for this purpose.But is your business ready to be advertised on Instagram? And how to measure the value of your Instagram campaigns?

Here are some signs that show that it’s too early for your business to employ an Instagram advertising strategy:

  • You don’t have a lead nurturing strategy in place. If so, then your sponsored ads will generate leads but you won’t have the approach to close sales. If your leads aren’t closing, you need to find out why, and then consider investing in advertising.
  • Check the sales funnel. Your sales funnel is one of the key indicators of the success of your customers’ journey. If something is holding them back from buying your product, this problem should be fixed before you pour your money into advertising.
  • Your content has low engagement. If you plan on investing in Instagram sponsored ads, you should have a strong content marketing strategy in place. Start with putting up high-in-value social media posts and create polished documents for your website, this will help you create your style that will define your future ads.

What if you ignore these points and still invest in Instagram advertising?

You risk spending your marketing capital too fast. That’s why it is better to start slow to make sure that you generate at least small capital before scaling up your advertising strategy.

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Early advertising can also harm your brand’s reputation. As all your efforts go to fixing the problems caused by investing in advertising too soon, other business segments will start falling apart, which eventually can cost you your brand.

So, don’t rush it. Instagram isn’t going anywhere, and, in the upcoming years, it will definitely preserve its marketing potential.But we’re pretty sure you won’t have to wait that long.

Why Instagram Sponsored Ads Make Business Sense (6)

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Instagram Sponsored Ads 2020: Best Practices

Now, as we covered the basics of running Instagram sponsored ads and why they should be in your media toolkit, let’s discuss the best Instagram sponsored ads practices that will help deliver better results.

1. Showcase Your Product

Visualization is Instagram’s domain.There are plenty of ways to create a good Instagram ad, from stories to carousel.But is it enough to create a successful Instagram ad?If you want your sponsored ad to get noticed, make sure that it showcases your product in an engaging way.

Here’s an example of a sponsored ad of SEMrush:

Why Instagram Sponsored Ads Make Business Sense (7)

One of the ways to showcase your product in action is with storytelling.Storytelling can be used both for products and services, and it engages your audience in a unique way, inviting them to share the experience and relate to it.

Why Instagram Sponsored Ads Make Business Sense (8)

Pro Tip: If you consider employing storytelling in your Instagram ads, make sure that the story serves the marketing purpose of the ad. To ensure that your story is successful, you can bring your marketing team together with a reliable writing service, which will help you tell your story in a more engaging way.

Why Instagram Sponsored Ads Make Business Sense (9)
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2. Don’t Skip A/B Testing

You may already have a few exciting ideas for sponsored posts on Instagram, but how will your audience react to them? Before launching an ad campaign on Instagram, we recommend running a preliminary A/B testing to see which ad your audience would respond well to.

In Facebook Ads Manager, through which you will be creating your Instagram sponsored ads, you can switch on the option of A/B testing and set the objective, which you want to test:

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Running a preliminary A/B test can also help you figure out the target audience for your ad and see, for instance, which age range will be the most responsive to your Instagram ads.You can run several A/B tests according to different objectives to see how different ads will perform in terms of creativity, placement, audience, and delivery.

3. Make Sure Your Ads Are Contextually Relevant

Lastly, let us remind you that not all content will perform well on Instagram when it comes to running sponsored posts.Consider this: how would you respond to an ad of a case study in your Instagram feed? Not great, we presume.

Thus, if you make a decision to run Instagram sponsored ads, make sure that you create the content that will be interesting to Instagram’s core audience. Put yourself in your buyer’s shoes – what ad content would engage you on Instagram?

Are You Ready to Introduce Instagram Sponsored Ads to Your Media Kit?

Now, you are.Instagram sponsored ads can be a great tool for promoting your business, especially considering Instagram’s marketing potential.Although it’s very competitive, Instagram can still serve you well to help you promote your business and reach your audience.

However, you should evaluate your business’s success before jumping into Instagram advertising. Otherwise, you may lose more money than you have invested in your sponsored posts.Make sure that you have a strong lead nurturing strategy in place, your sales funnel works well, and your content has good engagement rates.If you think you’re ready, then go ahead!

But before your ad goes live, make sure it shows the value of your product or service. Choose storytelling to introduce the value of your product or service to your target audience in a more engaging way. Don’t forget to check if the content of your ad suits Instagram’s esthetic.

Done with that? Run a preliminary A/B testing to see how your ad performs according to different objectives. Although it’s not obligatory, this preparatory step helps you ensure that your Instagram ad campaign will run smoothly and deliver good results.

Author Bio

Why Instagram Sponsored Ads Make Business Sense (11)
Why Instagram Sponsored Ads Make Business Sense (12)

Daniela McVicker is a passionate digital marketer. Daniela is interested in everything related to SEO and blogging. She collaborates with Essayguard and other websites where she shares her experience and helps marketers make their names in the online world.


Why is Instagram good for business advertising? ›

Using Instagram for business can drive brand awareness, boost sales, and build and track audience engagement. It's an excellent way to find customers where they're already spending time. It can also provide valuable audience insights to use with all your marketing plan strategies.

Does Instagram ads work for business? ›

So, I would say yes. Instagram ads definitely work. You, too, can see success with your Instagram ads. If you don't have a ton of experience von Instagram or want to learn how to buy Instagram ads, you're in the right place.

Are sponsored ads on Instagram worth it? ›

Absolutely, Instagram and Facebook ads are some of the safest add you can run through social media. Usually it is more effective to promote products through Instagram influencer pages rather than the actual Instagram platform itself. Influencers typically have higher conversion rates as well!

Do Instagram ads increase sales? ›

Selling Through Instagram Story Ads

While photo ads will likely retain their top spot well into 2021, Instagram Story ads should see the most growth based on the rise in Instagram Stories usage. These ads pop up in between Instagram Stories of accounts you follow and can make a large impact on potential customers.

Are Instagram ads worth it for small businesses? ›

Boost Sales

Due to the platform's large user base and increased engagement, running ads helps you get the eyes that matter to your products and services. With increased traffic being sent to high-priority product pages, you can boost your sales of those products and services effectively.

Do Instagram ads work for growth? ›

Instagram has 2 billion active Instagram users each month, and the average user scrolls through the platform for 53 minutes each day. With usage like that, Instagram ads can help you expand your reach significantly.

Are sponsored ads effective? ›

Sponsored ads are a powerful tool for brands selling on digital marketplaces; they unlock greater audience reach, increased conversion rates, and better return on ad spend. At the same time, sponsored ads are a boon for retail media companies.

Do Instagram sponsored posts work? ›

Instagram sponsored posts are a great way to gain more engagement, from likes to comments, on your organic content. Not to mention, you'll get your content in front of people who want your products or services.

What is the success rate of Instagram ads? ›

Instagram ads deliver high conversion rates

The average conversion rate for Instagram ads is 1.08%.

What is the best strategy for Instagram ads? ›

Choose the right image
  1. Focus on your products. If your Instagram ad is intended to showcase or sell your products, don't be afraid to use eye-catching images that put the focus on those products. ...
  2. Keep text to a minimum. Remember that Instagram users are there to see images. ...
  3. Use high-resolution images.

Are Instagram ads more effective than Facebook ads? ›

Your advertising goal should also impact your choice of platform. Facebook is best for getting website clicks or views/engagement for written content. Instagram is great for boosting brand awareness with visuals.

How do you attract customers to Instagram? ›

Here are some tips to attract your ideal customers from Instagram:
  1. Post eye-catching images.
  2. Create a worthwhile Instagram contest.
  3. Improve your Instagram reach.
  4. Build customer relationships.
  5. Improve your response rate.
  6. Build rapport with influencers.
10 Dec 2018

Does Instagram have a 20% rule? ›

Instagram and Facebook adhere to the 20% text rule. That means that Facebook or Instagram will reject your ad - or significantly reduce the reach - if you have text on more than 20% of your image. On Instagram, the 20% rule is even stricter. It's important to remember that ads should not look like actual ads.

Is Instagram a good way to advertise? ›

Instagram and Facebook ads are fully integrated, making campaign creation, creative iterations, and audience targeting easier to maneuver. Brands get the best of Instagram's high rate of engagement and Facebook's campaign creation, optimization options, and audience targeting variations.

Are Instagram ads worth it 2022? ›

Are Instagram Ads Worth the Price? Advertising on Instagram is an order of magnitude cheaper than other marketing tools. Therefore, it is worth using this platform, at a minimum, to test whether your audience responds to such activities. At the same time, the budget that will be needed is only 1 dollar per day.

Why is Instagram a good marketing tool? ›

Why Market on Instagram? Instagram's primary advantage over other social media platforms is its visual nature. If you have a business that benefits from the design of your product or if you have a service that has a visibly noticeable end result, Instagram is the best platform to showcase that content.

What are the advantages of sponsorship advertising? ›

Advantages: Build awareness – The most obvious benefit of sponsoring events, charities or projects is that it builds awareness of your brand, exposing your business to a wider audience and giving them a positive association with your brand.

Why are sponsorships effective? ›

Sponsorships help your business increase its credibility, improve its public image, and build prestige. Like any form of marketing, it should be used strategically as a way to reach your target customers. As you build your marketing plan, research the events and causes that your ideal customers care about.

Does Instagram make money from sponsored posts? ›

1. Get sponsored. Creating sponsored posts or stories is the primary way Instagram users can cash in on their account. For example, if your feed is focused on images of your dog on hikes, an outdoor gear company may want to pay you to post a photo that includes its product in the picture.

Why are there so many sponsored posts on Instagram? ›

But why does Instagram have so many ads? Instagram ads work by tracking your activity on the app. The more you engage with a brand's content by liking or commenting on its posts, the more likely you are to be targeted by ads from that brand.

How do Instagram sponsors make money? ›

How to Get Sponsored on Instagram
  1. Define your brand.
  2. Know your audience.
  3. Post consistently.
  4. Use hashtags and geotags.
  5. Tag brands in your posts.
  6. Include contact information in your bio.
  7. Pitch paid sponsorships.
  8. Know your worth.
12 Nov 2020

What is the most powerful advertising strategy? ›

Most effective marketing strategy: SEO marketing

SEO or search engine marketing tops the list of effective marketing strategies for small business, because it forms the base that all your other online marketing strategies will build upon.

What is the most effective advertisement strategy? ›

Instead of focusing all your attention on one strategy, take a marketing mix approach. Engage your audience online, in-person, and through tangible advertising mediums. Hold contests and give away coupons. Pay attention to which advertising campaigns yield the best results, and reproduce them in new ways.

Why Instagram ads are better than Facebook? ›

Your advertising goal should also impact your choice of platform. Facebook is best for getting website clicks or views/engagement for written content. Instagram is great for boosting brand awareness with visuals.

Which Instagram ads are most effective? ›

Performance according to Facebook Ads Manager:

It shows very clearly that the most successful ad in the campaign in terms of number of link clicks was the Single image ad, followed by the Stories ad. Reach was also pretty good for these two ads, along with that of the Boosted post.

How much Instagram pay for 1m followers? ›

How much money does 1 million Instagram followers make? An influencer with 1 million Instagram followers will make $10,000 per post. If you are an influencer with more than 1 million followers, you can charge anywhere from $10,000 to $100,000 per post or campaign.

How much money does 1 million Instagram views make? ›

According to USA Today, an influencer with 10,000 to 50,000 active fans can make a few thousand per post. Instagram influencers with up to 1 million followers can see $10,000 per post. Have over 1 million followers? You could charge $100,000 or more.

How much does 1k followers make on Instagram? ›

Micro-influencers (between 1,000 and 10,000 followers) make an average $1,420 per month.


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