The Instagram landscape

Almost, if not all, internet users have at least one social media account. Popular among all genders and ages is Facebook. Twitter and Instagram then follow, which is often used by younger online users.

As our marketplace has expanded into the digital world, these sites have adapted to the transformation as well. They do not only function for communication or networking purposes but also as a marketplace for customers. You can either sell your products or pay ads to promote your services to your target audience.

Instagram has an average of one billion active users daily, and 90% follow a business account. From its inception in 2010, it has become a powerhouse when it comes to digital marketing. Its algorithm studies people’s behaviours and interests, through the posts they engage with so that they can present the most relevant Instagram ads to users.

In Singapore, 62% of the population use Instagram and over two million people can be reached with ads. With the right social media marketing strategy, using this platform is an excellent leverage if you want to expand your market reach. All you need is an Instagram-worthy post and an appropriate ad campaign. This article will help you understand how IG ads work.

How much should you invest on instagram (IG) ads?

Your awareness of the different IG ad campaigns is essential. You can choose between two bidding models – cost-per-click (CPC) or cost-per-impression (CPM), which run on bids (it works similar to an auction bidding).
On average, advertisers who choose the CPC model pay US$0.20 to US$2 for each click while CPM can amount to US$6.70 per 1000 impressions. However, the amount of money to invest in IG ads depends on four factors:

1. Bid amount
2. Ad relevancy score
3. Estimated action rates
4. Competition.

When your ad checks the right boxes on these factors, it has a higher chance of receiving market leads.