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Instagram Ad Costs Plummet

Insta Ads Getting Better and Better

Unlike parent company Facebook, Instagram had one hell of a 2018.

It tipped over one billion users, daily time-on-site grew rapidly, and marketing uptake boomed, with Insta ad spend up 177% in 2018.

Further good news for marketers is that Instagram still offers good value, according to a recent study. With the average Instagram cost per impression (CPMs) and cost per click (CPCs) both falling through 2018.

The Adstage study for Q3 2018, recently released, analysed over 870 million impressions and 6 million clicks on Instagram to calculate median CPCs, CPMs, and click through rates (CTRs).

No Longer Just For Rich Brands 

Insta CPMs fell through 2018, due to a raft of downward price pressures:

  1. Instagram Q1 2018 Median CPM = US$7.19
  2. Instagram Q2 2018 Median CPM = US$8.60
  3. Instagram Q3 2018 Median CPM = US$6.90

Growing Instagram daily usage and time-on-site creates more ad inventory to sell, particularly with Instagram Stories. However, the demand for Insta ads in general, and Stories ads in particular, to buy is not yet matched.

This obviously pushes down ad costs.

Click Grammers Click

An improving Instagram CTR is also helping reduce ad costs.

The median Instagram CTR is roughly 0.7% which is a big improvement year on year, although about half of what advertisers would expect on Facebook.

As better calibre advertisers flock to Instagram, running better ads, CTRs should continue to improve as has been the case on Facebook.

On top of this, Instagram (read Facebook) is slowly rolling out smarter and smarter targeting.

For example, Trip Consideration targeting launched in 2018 for travel and tourism brands, pairing users ‘thinking about travelling’ with advertisers wanting to promote their offerings.

More recently Facebook announced that search would be a growing focus in 2019. Although this announcement has centred on Facebook Search and Marketplace it is something which will probably come to Instagram Explore eventually. Explore accounts for 20% of Insta usage, according to Mark Zuckerberg, but is not yet commercialised.

As a general rule of thumb, where there's online discovery, there will be ads…

With the right Facebook/Instagram ads much more likely to appear in the right person’s feed, at the right time, CTRs can only grow higher.

All in all, this makes for good news for savvy marketers tapping Insta for campaigns, once viewed as a costly place to run paid activity.

Even with a price increase anticipated for 2019, Instagram still offers plenty of room for upside.

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