How to set an Instagram ad budget

There is no single figure for everyone

How much to spend on Instagram ads is one of the most common questions. The right answer depends on sector, competition, audience and offer, so work out your own numbers rather than copying someone else's.

Calculate customer value first

The budget question is really a profitability question. Clarify these figures:

• How much do you earn on average from a sale?
• Do customers come back?
• What share of enquiries becomes sales?

For example, if one in ten enquiries becomes a sale, the most you can pay per enquiry should be less than a tenth of your profit on that sale. This sets the limit for profitable advertising.

Set aside a test budget

You cannot know the result of a new campaign in advance. Start with a small but meaningful test budget and let the system gather enough data to learn. A very low daily budget leads to closing campaigns before results arrive.

During testing, keep these in mind:

• Start with a few campaigns.
• Do not change too many variables at once.
• Wait long enough before deciding.

Consider total cost

An ad budget is not only what you pay the platform. Visual and video production, ad management and landing page work should be counted too. Looking only at cost per click can mislead you.

Increase according to results

If a campaign runs below your target cost, raise the budget gradually. A sudden increase can make performance fluctuate. Rather than adding money to a failing campaign, first improve the message, audience and page. A budget grows a working system, it does not fix a broken one.

Frequently asked questions

Daily or lifetime budget?

Daily suits ongoing campaigns, and lifetime suits campaigns with set dates.

How long should I wait for results?

There is no exact time. Do not decide before enough data has built up.

Do results grow with the budget?

Not always. With a limited audience costs can rise, so increase gradually.

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