What is the purpose of advertising on Instagram for a business?

Instagram is among the top 5 most popular social media platforms in the world. The platform has over 2 billion monthly users. Moreover, these users are active, financially capable, and highly engaged, making Instagram a valuable discovery for many business owners.

However, amidst such a large number of platform visitors, it is crucial to «find» your potential customers and be able to capture their interest. Otherwise, the money spent on promotion will be wasted. In this regard, we pay attention to various factors when setting up advertising on Instagram, recommend targeting strategies, and discuss the factors that influence the cost of promotion.

Instagram stats entrepreneurs should know

Can advertising on Instagram help increase the number of subscribers?

Targeting on Instagram is the most effective way to quickly increase the number of subscribers. Especially for new business pages with less than 1000 followers. When setting up an advertising campaign, the goal of «Awareness» or «Traffic» with a link to your account is often established. However, in 2023, a successful page for social media algorithms is not determined by the number of subscriptions, but by the percentage of interactions with the account’s posts, stories, and reels. In other words, the more people comment, like, and save your publications, the more often your content will be displayed in the «Explore» section and generate organic traffic.

The main advantage of Instagram targeting is that with the right settings for your advertising campaign, you can attract target interested subscribers who will not only add you to their follow list but also engage with your page, thereby increasing its reach. However, this comes with one crucial condition: your account should be prepared for advertising promotion:

  • Your profile header is properly designed (including name and logo).
  • Highlights are added with important information (such as a list of services, pricing, portfolio, clients/reviews, etc.).
  • Visuals are developed, and there are at least 12 posts present.
  • You have a prepared content plan for the duration of the advertising campaign. After launching the ads, it’s important to constantly be visible to the audience that has shown interest in your business by posting multiple stories daily, regularly adding new posts, and ideally, utilizing reels.

Promoting an Instagram account without quality and diverse content is simply impossible, even with impeccable targeted advertising settings. While a few years ago the focus of content strategy was primarily on feed posts, now it’s necessary to utilize all available formats.

What other benefits does targeted advertising have?

  • Low entry barrier. Yes, large companies often invest significant amounts in promotion. However, it is realistic to grow an account from scratch in just a few months, even with a small budget. Moreover, you can start receiving the first orders within a few days after launching targeted advertising.
  • Wide reach. Considering the number of active Instagram users, advertising promotion on this social network is suitable for various business niches whose target audience is present online.
  • Precise targeting. Key steps in setting up targeting include creating a profile of the target audience and selecting user interests in the advertising account. If you incorrectly define your target audience or launch a campaign targeting either too narrow or too broad of an audience, you risk wasting your budget. However, if everything is done correctly, you can achieve a high click-through rate (CTR) and an engaged audience interested in your product.
  • Constancy. The interests and characteristics of the target audience rarely change abruptly. Targeting can provide a steady influx of potential customers to your Instagram account for months.

Goals of targeting on Instagram

Achieving goals and conversion rate (the ratio of desired actions to total clicks/impressions) are the key indicators of the effectiveness of an advertising campaign. Targeting on Instagram can serve the following advertising objectives:

  • Awareness. This goal is not focused on direct sales or specific actions. It is used to increase brand recognition/memorability within the network and additionally increase reach, such as new followers, views, likes, and comments on posts. For example, if you have launched a new product line and want to generate initial interest among your audience.
  • Traffic. This goal can direct users to your Instagram profile but is more often used to increase website, landing page, or online store visits. It can also be set up to lead users to the Google Play/App Store for app downloads. When choosing this goal, it is important for the creatives to align with the content of the destination page.
  • Engagement. This goal aims to encourage users to interact with a post through likes, comments, and saves. It is often used for running promotions, contests, or giveaways.
  • Leads. This goal can be set up to collect contact information (e.g., newsletter subscriptions), initiate chat conversations, or drive specific conversions. This type of advertising works best when targeting a «warm» audience (retargeting or users who have shown interest in other advertising goals).
  • App Promotion. This goal is used to increase the number of downloads for a mobile application on app marketplaces.
  • Sales. This goal is relevant for promoting a website through Instagram. The social media algorithms will prioritize users who are likely to make quick purchases and online payments in online stores. However, this type of advertising potentially generates more sales in the short term when retargeting is employed.

Choosing the wrong goal is one of the most common mistakes when launching targeted campaigns. When selecting a goal in Ads Manager, it’s important to consider not only what you want to achieve through promotion but also factors such as your niche, the price range of your products, behavioral characteristics of your target audience, and the content strategy for your business profile during the campaign.

Ad formats for promoting on Instagram

Instagram is a visual social network. Images and videos in advertising campaigns are more important than text and usually attract the attention of potential customers. We set up advertising campaigns in all available formats on Instagram. Depending on the promotion goals and target audience profile, Comon Agency specialists individually select 2-3 most relevant types of advertisements.

Photo Ads

The simplest format that allows you to illustrate an offer using a single photo. The advantage of this type of ad is that it doesn’t look like overt advertising if done well.

Video Ads

A trend of recent years that continues to gain momentum. According to technical requirements, you can upload videos up to one minute long, but it’s better to create shorter videos and focus on the first few seconds.

Carousel Ads

This format allows you to add up to 10 photos/videos to an ad, showcasing products from different angles, creating a catalog, including multiple products in one ad, or even presenting a creative story through a series of photos/videos.

Collection Ads

This type of ad became available to advertisers relatively recently. It consists of a main product photo and a carousel of other related images. By clicking on any of the elements, the user is taken to a catalog where they can view more products. To run Collection ads, Instagram Shopping must be enabled on the account.

Stories Ads

These are widescreen images or videos that appear to users as they navigate through Stories. Due to the full-screen coverage, Stories ads create an immersive effect and enhance viewer engagement. Like other formats, they can include a CTA button.

Explore Ads

Explore Ads are displayed among organic content in the «Explore» section. This provides an additional placement option for displaying photo or video ads.

Reels Ads

These ads appear in the Reels section between regular video clips. Users of the social network can like, comment, watch till the end, skip, and share Reels ads. Reels ads are a relatively new but promising format, showcasing high user engagement and CTR (and consequently, a lower cost per click). It is recommended to add dynamic videos with well-thought-out scripts, ideas, trendy music, and effects.

How much does Instagram advertising cost?

If we talk about average figures for 2022, the cost of advertising on Instagram ranges from $0.20 to $2 per click (CPC model), $0.01 to $0.05 per engagement (per user), and has an average CPM (cost per thousand impressions) of $6.70. However, these are approximate data. The cost of advertising on Instagram is influenced by the following factors:

  • Individual campaign settings: For example, lead generation ads tend to be more expensive than traffic-focused ads, but they offer higher value in terms of interaction.
  • Business niche: Different industries and markets may have varying levels of competition, which can affect advertising costs.
  • Seasonality: Advertising costs can be higher during holiday seasons or sales events (such as Black Friday) due to increased competition.

At the Comon Agency, our specialists take a comprehensive approach to forming an advertising budget. They evaluate the niche, level of competition, analyze the target audience, and consider the client’s requests and preferences. Based on all the data, they determine the optimal investment size. Our main goal is to maximize the efficiency of the advertising budget. Throughout the promotion process, we conduct A/B testing, analyze performance metrics, and make adjustments to reduce advertising expenses.

​​Frequently Asked Questions About Instagram Ads

Is advertising on Instagram effective?

Yes, but only if you have correctly identified your target audience, prepared your page for advertising, and set up your campaign. Otherwise, you risk wasting your advertising budget.

What type of business is suitable for advertising on Instagram?

Advertisers on Instagram successfully promote all kinds of products/services, from cheap trinkets from China to premium apartment rentals. However, it’s important to consider that if you specialize in a complex service with a high price tag, you may need to «warm up» users longer and focus on reputation rather than immediate sales. Instagram targeting is most effective for the following types of businesses:

  • Local businesses (restaurants, coffee shops, bakeries, etc.).
  • Tourism services.
  • Sports businesses (gyms, personal trainers).
  • Children’s products and services.
  • Online stores (clothing and accessories, affordable electronics, pet supplies, hobby and craft supplies, cosmetics, etc.).
  • Event organization.
  • Info-business.
  • Beauty industry.

Why should you trust Instagram targeting to an advertising agency?

Setting up targeting is an art that requires extensive learning. Without practical skills and experience in launching advertising campaigns, it’s easy to make mistakes that reduce the effectiveness of your ads. Some common mistakes include choosing the wrong target audience or objective, not conducting preliminary testing, and not understanding which metrics are crucial. To avoid wasting your budget, it’s better to turn to professionals and be confident in the results. Our experienced targeting specialists will consider all the nuances of your niche and audience and launch effective Instagram advertising at a favorable price for you.