4 Tips to Lower Instagram Ad Costs and Boost Conversions

Instagram advertising can be said to be an essential tool for overseas sellers and brand marketers. In addition to improving advertising effectiveness, controlling and reducing advertising costs is also an important issue.

Ⅰ. Factors affecting Instagram advertising costs

1. Total value score

Instagram’s advertising system shows users the “highest value” ads by evaluating the total value score of the ads, which is calculated based on three factors:

Advertiser bid

Generally speaking, the higher the bid, the more beneficial it is to show your ad to more target audiences. However, because ad display is considered based on more than just the bid, the highest bid does not necessarily guarantee a successful bid.

Estimated action rate

This metric assesses the likelihood that the target user will interact with the ad (such as visiting the website in the ad, installing the app in the ad, etc.). The platform uses machine learning models to estimate this likelihood based on the activities of the target audience users and other factors.

Ad quality

There are many factors that measure the quality of advertisements, including users’ hiding and reporting behaviors of advertisements, bounce rate and dwell time of advertisement landing pages, authenticity of advertisement content, degree of violation, etc.

2. Advertising time

During holidays and well-known promotional events, advertising budgets tend to rise when many target audiences have a strong shopping desire and sellers actively promote products and their discounts.

3. Target audience

The smaller the target audience, the smaller the corresponding market capacity. If you want to compete for the resources of a niche target group, all parties will invest more, and the corresponding competition (such as the advertising discussed this time) will be more intense.

Ⅱ. Key points to reduce Instagram advertising costs

The specific costs of indicators such as CPC and CPM of Instagram ads vary in different data reports, but what is certain is that the goal of reducing advertising costs while ensuring advertising effectiveness remains unchanged.

1. Bidding method

Using automatic bidding can effectively control advertising spending, especially for some brands and merchants that lack rich historical advertising data. The platform has much more advertising data and "experience", which can prevent waste of resources caused by excessively high bids.

2. Landing Page

It is important to ensure the consistency of the landing page. For example, if the ad shows a toothbrush, then when the user clicks the ad and jumps to the landing page, they will also see a toothbrush, rather than a non-toothbrush product or a homepage where the toothbrush is not clearly positioned. Maintaining consistency between the ad and the landing page can improve user experience, engagement, landing page dwell time, and conversion rate.

3. Audience Targeting

The more accurate the positioning of the target audience, the smaller the error, the higher the success rate of improving the efficiency of advertising, and the less likely it is to cause waste. Instagram can be positioned based on geographic location, gender, age, user behavior and other dimensions. Brands and businesses can also customize audiences, such as adding Audience retention to include when looking for users who interact with brand/store accounts, and accurately positioning users who are interested in their own brands/stores.

4. Ad Testing

Use different advertising elements to conduct advertising tests for a period of time to evaluate which advertising combination can achieve better advertising results. This takes a certain amount of time, but it is conducive to improving the efficiency of subsequent advertising delivery.

At the same time, some brands and sellers target markets in different countries and regions. In order to conduct more refined localized and differentiated operations, they can use a multi-account solution and use IPFoxy to assist in advertising testing. This can not only bypass certain geographical restrictions and perform precise positioning, but also reduce associated risks, providing another layer of protection for account operations and advertising delivery.

Ⅲ. Final Thoughts

The cost of Instagram advertising is affected by many factors. Mastering relevant skills and using online tools properly can effectively reduce costs and improve efficiency.