How much does it cost to advertise on Instagram?
- Frederic Wolny
- Aug 8
- 7 min read
Updated: Dec 4
A guide for companies that want to advertise on Instagram in 2025
Instagram is undoubtedly one of the most important platforms for digital marketing. With over a billion active users worldwide and a strong visual focus, Instagram is the perfect place to build brand awareness and attract customers.
But how much does advertising on Instagram cost?
First things first: in digital marketing, we actually talk about advertising on Meta, because together with Facebook, Threads, and WhatsApp, Instagram advertising is booked and managed via the Meta Ads Manager (WAM for short). By default, Meta campaigns are always played on Facebook, Threads, and Instagram, depending on where they resonate better with the target audience. Only in exceptional cases are campaigns limited to one of these platforms, as this usually has a negative impact on campaign performance.
Apart from the Meta Ads Manager, there is also the option of placing ads directly via the app using the “Boost Post” button on Instagram. However, you should never do this, as it will lead to significantly poorer results.
To avoid confusion, we will continue to refer to Instagram advertising in this article, although it is synonymous with Meta advertising.
Basically, there are two cost factors to consider for advertising on Instagram:
The advertising budget for the platform (paid to Meta for placing the ad)
The costs of the service provider (freelancer/agency) who takes care of the conception, creation, and booking of the ads.
Costs of the service provider: Who takes care of your advertisements on Instagram?
There are three options: either you hire an agency, a freelancer, or you place the ad yourself.
Hiring an agency
In most cases, you have to pay more for agencies than for freelancers.
Due to their size, agencies also have higher fixed costs. The office, accounting, IT, human resources, and so on.
Agencies usually work with fixed-price contracts (retainer contracts, or simply “retainers”).
This means you pay a monthly fee and receive comprehensive ad management services. It does not matter how many hours your agency ultimately needs to complete the task. There is a service contract that clarifies the completion of your task.
On the one hand, this is convenient for you because you can theoretically assign an unlimited number of tasks to your agency without having to pay more.
On the other hand, your agency could also plan only a minimum amount of agency time for you in order to maximize its own profits.
This relationship of trust often leads to dissatisfaction, which is why several other forms of payment have already become established, such as profit sharing.
Basically, you can expect agencies with retainer costs to charge between €2,000 and €3,500 per month.
Hiring a Freelancer
Unlike agencies, freelancers are usually cheaper, as they can often be booked by the hour or day and have lower fixed costs. Depending on their experience and specialization, hourly rates can be more expensive, but you can expect to pay around €450 for an hourly rate of €90 and a monthly expenditure of 5 hours.
Managing the Instagram ads by yourself
If you want to save on the cost of a service provider, you can also take care of your own advertising on Instagram.
There is just one thing to keep in mind: you save on the cost of an external service provider, but you have to invest your own time and you will probably have higher costs per result.
These two factors can ultimately represent a greater cost than hiring an external service provider.
When it comes to your own time, you need to ask yourself four questions:
Can I complete the task (including training) faster than an external service provider?
How much is my own time worth per hour?
What opportunity costs do I incur if I take care of my ads myself? (Possibly through your own projects, for which you no longer have time)
Can I achieve results that are just as good as those of an external service provider?
So if you have enough time and are knowledgeable, you can save yourself the expense of a service provider. But in most cases, this is not the case.
Otherwise, you wouldn't be Googling this text, right?
Alternative:
You can also manage your social ads yourself and seek advice from a freelancer. Freelancers usually charge higher hourly rates for consulting, but you can book their services only when you need them. For example, you could get an hour of consulting twice a month and manage your social ads yourself the rest of the time.
If you would like my advice, please feel free to arrange a non-binding initial consultation with me.
Sample calculation for the total cost of advertising on Instagram:
Freelancer | Agency | DIY | |
Media budget | 300 € | 300 € | 300 € |
Cost of the provider | 450 € | 2.000 € | 1.200 €* |
Number of results | 6 | 6 | 3 |
estimated total costs (monthly Minimum) | 750 € | 2.300 € | 1.500 € |
Total cost per result | 125 € | 383 € | 500 € |
* So let's assume you are only half as fast as a freelancer and your calculated hourly rate is €120. The freelancer needs 5 hours and you need 10. We'll assume that's the cost of doing it yourself instead of the cost of hiring a freelancer.
If you factor in your own time and the loss of efficiency in the results, you get the lowest cost per result with a freelancer.
Note: Although it is not a fixed rule, I always recommend spending at least as much on advertising as you do on the service provider. After all, the campaign revenues have to cover the costs of the service provider.
Imagine buying a Ferrari but saving the money for gas.
You won't get very far.
The media budget: What factors influence the costs of advertising on Instagram?
A good starting point is your own product or service that you want to advertise.
The more expensive your product is, the higher the cost per sale (CPA) on Instagram will be.
More expensive products usually have a smaller target audience. And smaller target audiences are more expensive to reach.
Example:
People who are genuinely interested in buying a sports car.
People who are interested in buying chewing gum.
Far fewer people can afford a sports car than a pack of chewing gum. In addition, many companies want to sell to people with high incomes. This increases the price of reaching this target group.
The cost per sale is therefore the advertising budget that Meta has to spend to sell your product once. You can use this figure to calculate your advertising budget.
In general, the cost per sale is made up of the following factors:
The target group:
The more specific and smaller the target group, the higher the costs. Age group, income, interests, and location influence the cost per click (CPC) and cost per thousand impressions (CPM).
The placements:
Instagram offers various placements such as the feed, stories, explore pages, and reels. Prices vary depending on the placement, with some formats such as the feed being more expensive than others. This is also the reason why Facebook is generally not excluded. More ad placements enable the algorithm to deliver optimal results. Meta has activated its A+ placement by default, which means that your advertising is distributed across all advertising placements. Restricting yourself to certain placements reduces Meta's options and thus increases your costs.
The ad format:
Instagram supports multiple advertising formats, including image, video, and carousel ads, as well as interactive formats such as Stories and Reels. More complex formats such as videos are generally more expensive, but also offer higher interaction rates.
The competition:
Instagram uses Meta's auction system. The price of advertising can therefore rise when many companies compete for the same target group – such as during holidays or special sales periods (e.g., Black Friday).
The advertising goals:
The costs depend mainly on the objective, such as clicks, engagement, leads, or conversions. Different objectives have different CPC and CPM values. As a general rule, the deeper the conversion, the higher the costs:
Reach is the cheapest
Clicks and engagement are in the middle range
Sales and leads are the most expensive
Signing up for a newsletter is usually cheaper than taking out a monthly subscription for several hundred euros.
How much media budget should you calculate monthly for advertising on Instagram?
Theoretically, you could place ads on Instagram for as little as €1 per day. But that wouldn't make much sense. There are several approaches to the question of media budget.
The official approach
Instagram campaigns officially need 50 conversions per week to get out of the learning phase. This gives you the best campaign results. This is where the cost per sale comes into play. In theory, you need:
Cost per sale x 50 = weekly budget
In concrete terms, this means that with a cost of $10 per sale, you should budget at least $500, which corresponds to a monthly advertising budget of at least $2,000.
For smaller advertisers, however, this is usually already above the possible budget.
Conversely, this does not mean that Instagram campaigns with fewer than 50 conversions cannot be successful. Each conversion serves as a signal to the campaign to improve its performance. Seven conversions in a week are better than no conversions at all.
When you launch a Meta campaign, it always starts in a learning phase. Specifically, this means that Meta's algorithm still needs to optimize itself and the campaign is not delivering optimal results. The more signals (conversions) the campaign collects, the better it works.
The practical approach
For smaller budgets, it is advisable to spend at least as much of your budget each day as you need for one sale. This will probably not get you out of the learning phase, but it will ensure that the campaign can achieve at least one conversion per day.
Following our example, you can set your daily budget to €10, which gives you €300 in advertising costs per month.
Splitting big media budgets
However, if you have more money than just the minimum budget at your disposal, you need to think about how to allocate your budget correctly. In most cases, this means dividing the budget between several campaigns in order to achieve more complex or multiple goals.
This is where the real game of budget allocation begins.
The budget is distributed either at the campaign level (Campaign Budget Optimization, or CBO for short) or at the ad group level (Adset Budget Optimization, or ABO for short).
As a general rule, you should always make sure that the individual campaigns or ad groups have at least €10 per day available.
Conclusion: Is advertising on Instagram right for your business?
Instagram advertising offers great opportunities for companies to increase their reach and target their audience.
The costs vary depending on the goal, budget, and competition. For small businesses, Instagram advertising can be cost-effective if the campaigns are well planned and optimized.
The most cost-effective solution is to work with a freelancer. You can book hours flexibly and have full control at all times.
Ultimately, the success of Instagram advertising depends not only on your budget, but also on a well-thought-out strategy and continuous optimization.
Would you like to advertise on Instagram? Then get in touch with me!
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