Instagram Advertising: Is It Worth It? What You Need to Know

Instagram is one of the most popular social media platforms out there, and thousands of businesses use it to connect with its large and active user base. However, you might be wondering whether investing in Instagram ads is worthwhile for you given the abundance of other advertising platforms out there.

 

In this article, we'll look at the key advantages of Instagram ads, some possible drawbacks, and also the factors you should consider when making your decision. With this information, you’ll be able to choose right, so keep reading to find out if Instagram ads are worth it for your business.

 

How does Instagram advertising work?

Your Instagram ads will pop up among the posts and Stories in people's Instagram Feeds, alongside content from the accounts they follow and hashtags they like. They might also show up in the Explore section, where users can find new accounts they haven't followed yet. They can tap on a picture to see the ad in their Feed and keep scrolling to see a mix of regular posts and ads. If someone taps on a picture or video in Explore, they might see ads as they browse, just like in their Feed.

 

Basically, your Instagram ads can appear in these placements:

• Feed,
• Stories,
• Explore,
• Reels,
• Instagram Shop.

All Instagram ads will be marked as “sponsored”, and you can also include a CTA button below the picture so that users can take a specific action. Your ad copy can show up not only on the ad itself but also under the picture.

 

What makes Instagram Ads worth it?

When you're thinking about where to spend your money on ads, it's good to know what makes each platform special. Let’s turn to facts and data to find out why Instagram ads are worth your time and investment.

 

Key Instagram Ads statistics

First of all, Instagram has 2 billion monthly active users, taking third place after Facebook and YouTube. As the third most popular social media platform in the world, Instagram is a top choice for many businesses and advertising agencies – numbers speak for themselves.

Source: Statista

 

What also matters is that Instagram paid media placements reach 1.69 billion users, which is more than 80% of the MAU number. This means that, with the right strategies, you can definitely find your potential customers among the platform’s user base and reach them with your offers.

Just like on many other social media networks, video content is the most popular format on Instagram. Moreover, Instagram users watch videos on the platform more often than users on other platforms, which can be very promising to businesses looking to promote their products or services in the most engaging way.

Source: GWI

 

Also, Instagram is one of the top platforms for younger audiences: it is used most actively by people aged between 18 and 34 years old, i.e., Gen Z and Millenials. If your target audience falls into this age bracket, Instagram advertising might become a great addition to your existing mix of platforms.

Source: Statista

 

When it comes to the distribution of users by country, data shows that India and the United States have the largest number of Instagram users. If you’ve got customers in these countries, you should definitely consider Instagram for promoting your business.

As for conversion rates, top brands have an average conversion rate of 1% on Instagram. But what’s interesting is that smaller brands with fewer followers have higher conversion rates in comparison with brands that have more than a million followers. The possible explanation for this is that these small brands have more narrow audiences that are more likely to follow them because of their products or services, and not simply content. Conversion rates are higher for brands that have fewer than 10K followers or from 501K to 1M followers (1.3%). The number is slightly lower for brands with 10K–50K followers (1.2%).

 

Instagram is also one of the top platforms for social commerce. Instagram users also actively follow brands on the platform, which means that they’re more likely to discover new products this way.

Source: Oberlo 

 

Now, let’s consider the specific benefits of running ad campaigns on Instagram.

 

Key benefits of Instagram Ads

1) Advanced targeting options

Instagram ads allow you to target your customers based on different parameters, making it easier to reach the right groups of people.

 

Here are the basic targeting options on Instagram:

• Demographics: you can target users based on age, gender, language, and location;
• Interests: you can target users based on their interests (e.g., fitness, food, travel, fashion, etc.). Instagram gathers this data from users' activities and engagement, so it rather accurately shows what people care about;
• Behaviors: you can reach people based on their purchase behavior (both past behavior and the likelihood to make a purchase), as well as based on what type of device they’re using;
• Custom audiences: you can target people from your customer lists or retarget those who’ve interacted with your business before (e.g., visited your website or used your app). This can help you maintain relationships with them and give them incentives to convert (remember: warm audiences convert a lot more);
• Lookalike audiences: you can create an audience that is similar to your existing customers, finding new potentially high-converting segments for your ad campaigns;
• Engagement: you can target users who have interacted with your Instagram profile, posts, or ads, as well as reach users who have interacted with your Facebook content;
• Automated targeting: you can also let Instagram's algorithms automatically find the best audiences for your ads based on your current settings and performance data. If you’re not sure whom you should target on Instagram or simply want to explore new options, this can be a great choice for you.

Experimenting with these targeting options can help fine-tune your Instagram ad campaigns and reach the most relevant audiences, but you need to do your research before deciding which one to use and also build a strategy that takes into account your conversion funnel.

 

2) Opportunities for collaboration

Using Instagram ads can be a game-changer for advertisers because it makes finding creators to collaborate with so much easier. Instagram is packed with influencers and creators who have huge followings and can help promote your business.

 

Working with popular creators can help you make your ads more authentic and trustworthy since their followers are likely to trust their recommendations. Plus, these creators are great at making engaging content, which means they can help you create eye-catching ads.

 

Also, Instagram has a Creator Marketplace that helps businesses find the most suitable creators to partner with through machine learning-based recommendations. It has been recently introduced to eight new markets, which means that there will be even more opportunities for collaborations out there.

 

Instagram's creator marketplace makes it easy for brands to find the right creators to work together, and after you find the right people, you can start creating your ads. You can boost existing Instagram posts as partnership ads or create new ones in Ads Manager. Partnership ads, which used to be called branded content ads, can help you boost content that features a creator’s handle, making your collaborations come across as more authentic. These ads are super efficient and also the most transparent (creators have to disclose their partnerships).

 

And don’t forget about the possibility of a TikTok ban: even though a lot of younger users prefer TikTok over Instagram, the platform is caught up in some geopolitical issues and worries about user data privacy. Moreover, Instagram is still the #1 platform for influencers, meaning that it should also be your first choice if you want to collaborate with content creators to reach a bigger audience and get noticed.

 

3) Different ad formats

Various Instagram ad formats can help you tell the story of your brand and achieve your advertising goals, no matter what kind of business you’re running. There are plenty of options to choose from, but you have to understand what each of them is about and what it requires for optimal performance.

 

Here are the main Instagram ad formats you can use:

 

Image ads

These single image ads allow you to promote your offers in a straightforward but impactful way. You can choose high-quality photos that reflect your brand and use square, landscape, or vertical forms.

Video ads

Videos can make your products come alive and help you show how they can be used, share stories, or just entertain your audience. In-Feed video ads can be up to 60 seconds long, allowing you plenty of time to convey your message in either square or landscape form (except in Stories).

Carousel ads

Carousel ads allow you to show several images or videos in your Instagram ad instead of just one. This ad format is ideal for displaying a variety of products or narrating a story step-by-step In-Feed or on Stories in square or vertical forms.

 

Stories ads

Full-screen ads in Instagram Stories help you create engaging and immersive experiences for your audience that fit well with organic content. Stories ads are made from vertical images and videos that can be up to 60 seconds long, with aspect ratios ranging from 9:16 to 4:5.

 

Reels ads

Reels are short and engaging full-screen vertical videos, and often they are more effective than Stories in attracting and retaining user attention. This is by far the most dynamic ad format out of them all, and it can help you not only get more eyes on your offers but also make sure that your message is fully received.

 

Instagram Shop Ads

Instagram Shop ads are not a separate ad format per se, but what makes them different is that you can use them to reach people who like to shop on Instagram.

 

These ads can be single images, carousels, or collection ads.

• Single image ads show one product with a direct link to buy it;
• Carousel ads let users swipe through multiple products in one ad;
• Collection ads feature a main image or video with smaller images underneath for easy browsing.

All image and video sizes are supported, but ads will look like square images for consistency. Each ad is tappable, taking users straight to the product details page on your website, making shopping easy. By using product tags in your ads, you can highlight specific items and provide direct links to buy them.

Source: Techcrunch

 

Let’s turn to statistics once again and check what you should keep in mind about different Instagram ad formats:

• Instagram Stories retention rate: the retention rate drops as the number of frames increases. By the fourth frame, the retention rate stabilizes around 81%, and then decreases below 75% after the seventh frame;
• Preferred Instagram Story format: 35% of users prefer short narrative-style Stories with a mix of photos, videos, and text. Stories featuring quizzes and polls are also popular among users;
• Instagram Reels reach and engagement: Reels have the highest reach rate, reaching around 30.81% of followers and getting twice as many views as other types of content. However, engagement with Reels dropped by 25% in 2023. Despite declining engagement, Reels are still the best type of Instagram content to maintain audience interest;
• In-Feed ads vs. Stories ads: In-Feed ads contribute the most to Instagram ad revenue (which reached $50.58 billion in 2023); while Stories ads make up 26.7% of it. Also, In-Feed ads have a higher CTR than Stories ads on average, which explains the popularity of this ad format.

So, when creating your Instagram ads, consider these insights to optimize them for higher effectiveness and engagement.

 

4) Visual appeal

Instagram is all about visuals, making it an ideal platform for running ads that rely on strong imagery. But why should you care about visuals when advertising your business?

 

Here are some good reasons:

• Catching people’s attention: Instagram provides many ad formats besides just images that can make your ads stand out. Users pay more attention to appealing visuals, so it’s crucial to catch their eye before they scroll past;
• Storytelling: visuals are excellent for telling the story of your brand. Whether it’s a photo of your product, a behind-the-scenes video, or a series of images in a carousel ad, you can create a narrative to paint a specific image of your brand and get your message across to your audience;
• Demonstrating: photos and videos allow you to showcase your products down to the smallest details. You can zoom in on textures, show different angles, and demonstrate how your product works;
• Inspiring: visually appealing content can also inspire users, and inspiration worlds really well for many businesses that rely on evoking certain emotions in customers (e.g., lifestyle, beauty, sports brands, etc.);
• Engaging: ad formats like Stories and Reels allow you to add interactive elements like polls, quizzes, and swipe-up links to your ads. These features help you keep engagement rates high and build closer relationships with your audience;
• Being recognized: keeping a consistent visual style helps businesses get instantly recognized, and there’s no better platform to create this style than Instagram. When people frequently see visually appealing ads and organic content from your brand, they start to recognize and remember your brand better;
• Staying flexible: as Instagram provides various tools and features for advertising, there are always opportunities to freshen up your ads and avoid ad fatigue. You can use filters, stickers, text, and more to make your ads more appealing and engaging;
• Leveraging User-Generated Content: UGC is one of the most effective tools for driving conversions, and you encourage your customers to create content featuring your products and then boost it.

In short, Instagram allows you to create ads that not only capture attention but also engage and inspire your audience.

 

5) Integration with Facebook Ads

What also makes running Instagram ads worth it for many advertisers is that Instagram ad campaigns can be easily set up alongside Facebook’s.

 

You can run your Instagram ads in three different ways:

1. Directly from Instagram: you can switch to a professional account and boost your feed posts, Reels, and Stories right from Instagram;
2. From your Facebook Page: you can link your Instagram account to your Facebook Page and create ads that show up on both Facebook and Instagram;
3. Using Meta Ads Manager: you can also use Meta Ads Manager to create detailed ad campaigns for both Instagram and Facebook.

If you go with the last option, you’ll be able to benefit from the ability to manage ads for both Instagram and Facebook through Meta Ads Manager, get access to detailed data and insights from Facebook to make your ad campaigns more successful.

 

As you can see, Instagram ads have many benefits that can help you meet your advertising goals. You can target the right people, show off your products with great visuals, and use Facebook's data to improve your ads. Overall, Instagram ads are a great way to make your brand more visible and get better results.

 

But no advertising platform can have only positives: there are always some drawbacks that you should keep in mind before going all-in.

 

Drawbacks of Instagram ads

When it comes to advertising on Instagram, there are some things you should think about before jumping in. While Instagram is a popular place for businesses to promote their stuff, there are a few downsides you should know about.

 

Potentially higher costs

First off, let's talk about money. Advertising on Instagram can get pricey, especially if you want to reach a lot of people or target specific groups. You need to be realistic about how much you can afford to spend.

 

Ad fatigue risks

Ad fatigue, or the situation when people see the same ads over and over again, can be quite high on Instagram. When this happens, people can start ignoring your ads or getting annoyed, so you have to constantly rotate your ad creatives to keep everything fresh.

 

Higher competition

Instagram is a pretty crowded place for advertisers: there are so many businesses trying to get people's attention that it can be hard to stand out. This means that you have to put effort into doing thorough research of your audience, competitors, best practices for creating Instagram ads, as well as what is currently trending on the platform.

 

Challenges for smaller businesses

It might be a bit more difficult to run Instagram ads for small businesses: you might not have a big budget or a lot of followers, which can make it harder to get your ads seen by enough people. That being said, all of these drawbacks can be avoided if you learn Instagram advertising strategies that are tailored to the kind of business you’re running.

 

Now, it’s time to consider some other factors you should pay attention to when deciding whether Instagram ads will be worth your investment or not.

 

Factors to consider before investing in Instagram ads

Your target audience

Think about whether the people who use Instagram are likely to be interested in your brand. As we’ve explained earlier, Instagram is popular with younger users, and it’s a mostly visual platform for people who love to see pictures and videos.

 

If your customers fit this description, Instagram could be a good fit for your ads. But if your audience is older or not big on visuals, you might want to explore other advertising platforms instead.

 

Your content

Is your content top-notch and visually appealing? That’s what matters the most when it comes to Instagram ads. Before you spend money on running Instagram ad campaigns, you have to make sure your content matches what the platform is about. High-quality photos and engaging videos will grab people's attention and make them more likely to interact with your ads.

 

The ad’s relevance to your audience’s needs and desires also matters a lot, so you have to throw two strikes with one pitch, so to speak. You can consider hiring a professional photographer or videographer to help you create standout content, but keep in mind that Instagram ads don’t always have to be too sophisticated.

 

If you’ve got some skills with creating social media content for your business (in particular organic Instagram content that your audience likes), you’ll definitely be able to create well-performing Instagram ads. Authenticity matters on Instagram just as on platforms like TikTok or Snapchat, so less is often more when it comes to how polished your ads look.

 

Budget and goals

It’s also important to figure out what you want to achieve with your Instagram ads and set clear goals. This will help you understand whom you’ll be targeting, what you’ll be focusing on in your ads, and how much you’ll need to spend.

 

Basically, it's important to be realistic about what you can achieve with your budget. We’ve talked about the average conversion rates brands get from their Instagram ads, so you can keep those numbers in mind when making your decision.

 

So, what if, after learning all this, you’ve decided that Instagram ads are the right choice for your business. What can you do to make sure that your Instagram ad campaigns perform the best they can?

 

Tips for optimizing Instagram Ads' performance

When it comes to Instagram advertising, optimizing your ads is key to achieving the best results. Try the following to get a higher ROI from your Instagram ads:

Make your ads engaging

• Visuals: use high-quality images and videos that are visually appealing and relevant to your brand. Experiment with different styles to see what resonates best with your audience. Bright colors, clear images, and eye-catching designs can make your ads stand out, so try these tactics to see what works better for different audience segments;
• Copy: keep your ad copies concise and compelling, write headlines that grab attention, and include clear CTAs. Make sure your copy aligns with your visuals and speaks directly to your audience's needs and desires. Check out our article on writing effective ad copies for more tips.

 

Use Instagram’s advertising features

Instagram offers a variety of ad formats and placements, and you can experiment with all of them to find the top-performing options.

 

As statistics show, In-Feed ads seem to be more effective than ads in other placements, and Reels ads have a higher CTR than other ad formats, so keep that in mind when thinking about what to choose.

 

Also, if you have products to sell, consider integrating shopping features into your ads. This will allow users to click on products directly within your ad and be taken to a purchase page, increasing the likelihood of conversions.

 

Test and adjust

Once again, we have to reiterate that A/B testing is the best strategy you can use to find approaches that work for your business.

 

We recommend testing different versions of your ads and regularly reviewing metrics like CTR, conversions, engagement, CPC/CPM, and so on to see what gives you the best results and scale top-performing ads to get the most out of your ad budget. You can read our article on A/B testing to learn what you can test and how to design your tests correctly for better results.

 

All of this can help you create and run more effective Instagram ads. Whether you’re advertising a small business or a large brand, optimizing your Instagram ad campaigns can lead to greater success and a higher ROI.

 

Recap

A long time ago, Instagram was just a platform for sharing photos and videos. Now, it’s one of the social media giants that allows businesses from different parts of the world to reach their customers in the most effective ways possible.

 

But are Instagram ads worth it? The answer will depend on what you’re working with, e.g., the type of business you're going to advertise, your target audience, budget constraints, and so on. But all in all, Instagram is one of the most effective advertising platforms out there, driving conversions for different kinds of advertisers and deepening the relationships brands have with their audiences.

 

To make the right choice, go through all of the aspects of Instagram advertising we’ve talked about in this article. And lastly, keep exploring different strategies and approaches to make Instagram ads work for you: success is never guaranteed, but rather achieved through trying and learning.