How do they figure out the price of ads on Instagram?

Advertisements on Instagram are purchased using a bidding auction method. The first step for an advertiser is to set a budget for the campaign and place a bid.

Budgets are the sum of money an organisation is ready to spend on a project or initiative. The expense of a campaign may be planned for on a daily basis, or the entire duration of the effort may be factored in.

Bids represent the most money an advertiser is willing to pay for a user to accomplish the ad’s goal. This goal might be anything from watching a video to visiting a website to installing a mobile app.

Improving brand recognition, stimulating interest, and closing leads are the ultimate goals.

Instagram holds an auction to assess which advertisement will provide its users the greatest benefit, and then chooses the winner. That worth is determined by these three fundamental elements:

Price offered by the advertiser

Estimated action rates measure how probable it is that a user will do the desired action after viewing an ad.
Ad quality and relevancy refer to how probable it is that a user would be interested in the ad.

If you win, your advertisement will replace one that was competing for the same area. Ads operate on a cost-per-click (CPC) basis until your budget is exhausted. Analytics tools, such as HubSpot’s Ads Software, allow you to monitor the efficacy of your campaign in real time.

It will cost more or less to reach your desired audience, have more or less time to bid, and be strategically placed within the app.

Why do Instagram ad prices fluctuate?

It’s common knowledge that people from the Z generation, the millennial generation, and the boomer generation will interact with your advertisements in quite different ways. A clothing line offering pleated khakis and golf shirts is more likely to appeal to an audience of adults watching PGA Tour footage than to a group of 13-year-olds looking at SpongeBob memes on their phones.

Users of varied ages also exhibit widely variable online habits, with some spending disproportionately more time than others on social media. This means that there will be greater competition for Instagram ad spots among demographics with a higher median age.


Instagram ads cost more or less at different times of the day, week, and year.

Brands consider when publishing on the timeline or on stories, since the days and hours make a difference in the performance of the material. As could be expected, advertising rates also take user behaviour into account and adapt accordingly.

The cost per click may also change over the year.

The popularity of various brands and the amount of money people are willing to pay fluctuate with the seasons. For instance, the summer months are probably busier for air conditioning firms than the winter months.

Similarly, advertising may be more expensive in the months running up to the holiday season and Black Friday.

Instagram advertising rates tend to fluctuate with the seasons as they mirror shifts in user interest and behaviour.


50.8% of Instagram users are women and 49.2% are men as of 2021. Although seemingly insignificant, this variation can have major effects on the price of Instagram advertisements. Keep in mind that 1.6% isn’t insignificant given that over a billion people use the programme.

Instagram advertising aimed towards women and men may cost somewhat different amounts due to these and other variables. The difference between men’s and women’s cost-per-click may just be a few cents each time, but over time, it adds up to serious money.

Publicity Spots

Your ad’s CPC will vary depending on factors including its placement and the sort of ad it is inside the platform. Instagram ads in stories are often cheaper than feed ads.

HubSpot’s senior marketing manager, Jillian Hope, is among many who believe that creating separate advertisements for feed and story placements is the best way to maximise return on investment.

Reaching your target audience for an affordable price requires some finesse. There is no one factor that determines the price of Instagram advertisements.