By 2023, Instagram is expected to have 1.2 billion users. With 90% of Instagram users following at least one business, there’s huge potential for your business to get in front of a huge global audience.

But with 200 million business accounts on the platform, the competition to stand out is fierce. While it’s tempting to invest all of your budget into advertising - because surely that means you’ll get your content in front of more people? — but don’t underestimate the power of a well-thought-out organic campaign.

While every business will have a unique way to spend their budget on Instagram marketing, it will help your marketing efforts in the long run to understand the cost of advertising, how much you can expect to budget for natural endeavors, and how to make your money work harder.

How much does advertising on Instagram cost?

Instagram is expected to generate $33.25 billion in advertising revenue in 2022. Its advertising is booming, and more and more businesses are looking to get involved.

But before you dive into Instagram ads, it’s important to understand their pricing structure and which one might work best for your business.

Instagram ad costs depend on the pricing model you choose. When setting up an Instagram ad campaign, you can choose between two pricing structures:

Cost Per Click (CPC): Instagram charges you every time someone clicks on your ad.

Cost per thousand impressions (CPM): Instagram charges you per thousand impressions.

Research by Socialbakers shows that the average cost per click on Instagram depends on the location of the ad. For feed posts, the CPC is around $0.60. Instagram Stories have a cheaper CPC of around $0.40-$0.50.

Feed posts usually cost around $1.70 per thousand displays; Stories ads cost around $1-$1.15.

Typically, the cost per 1,000 displays ends up being more expensive because Instagram charges you when someone views your ad. Since viewing is a passive behavior, it can happen more often than someone who actively clicks on an ad.

CPC is an advantageous pricing structure if you want to pay only when a user actually clicks on your ad.

Keep in mind that these costs are just average numbers. Many other factors (including your industry and its competitiveness) can affect Instagram ad costs. Your final ad costs may be higher or lower than the figures above.

Instagram Content Budget

While Instagram ad costs can be reasonably cut and reduced, predicting budgets for organic Instagram content can be more challenging.

Given the competitive nature of Instagram content, you may feel like you need to run a large multinational campaign with a six-figure monthly social media marketing budget to stand out. Fortunately, this is not the case.

Your decision to handle social media marketing in-house or outsource it to an agency may determine how much you spend on organic Instagram content.

That said, it’s worth noting that the industry average is between $200 and $350 per day. For monthly costs, the industry average is around $4,000 to $7,000 - which is more than proportionately more than the average daily cost. These numbers are approximate, so don’t worry if you’re on a tight budget.

Your budget for natural Instagram content will depend on the type of strategy you choose to follow. Will you focus on educating your audience through engaging tutorials that require video production? Or will your followers respond better to relevant modalities?

Determining what content will resonate best with your audience will help you develop an organic strategy and set a realistic budget.

Despite the common perception that organic content is “free,” there is still a cost involved (usually associated with production).