Why Instagram Sponsored Ads Make Business Sense

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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. 

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.
adidas Instagram sponsored ad

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 your website using Jetpack to further amplify the outreach.

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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:

  • 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. 

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. 

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. 

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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:

Semrush Intstagram sponsored ads

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. 

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.

liniabutter Instagram sponsored ad

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:

running A/B test on Facebook ads manager

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

Daniela McVicker

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.

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