Instagram Ad Cost Calculator

How to use this Instagram ad cost calculator

To calculate your Instagram ad cost, enter your target revenue, average revenue per conversion, conversion rate, and cost-per-click (CPC). The tool will instantly calculate your Instagram ad cost and ad ROI, providing you with clear insights into your Instagram ad budget.

Instagram ad cost formula

Instagram Ad Cost = Required Clicks × CPC

Here, the number of required clicks is calculated as follows:

Required conversions = Target Revenue / Average Revenue per Conversion

Required clicks = Required Conversions / Conversion Rate

Further, your ROI on the ad campaign will be calculated as follows:

Instagram ad ROI = ((Target Revenue - Instagram Ad Cost) / Instagram Ad Cost) x 100

Understanding the Instagram ad cost result

The ideal Instagram ad cost will depend on various factors such as your goals, industry, product, etc. In general,

• A relatively high Instagram ad cost might indicate high competition, wrong target audience or poor ad performance, especially if it is accompanied by a lower ROI.
• A low ad cost often reflects efficient audience targeting, high engagement, and lower competition in your ad set. However, if your ROI is low, then you need to reconsider your ad strategy.

When to calculate Instagram ad cost

Here are some scenarios where you should calculate Instagram ad cost:

• Before launching a new ad campaign to estimate budget needs
• While adjusting campaign settings to understand cost implications
• To evaluate performance in relation to spending and optimize future campaigns
• After increasing your CPM bid to estimate potential changes in cost

How to calculate Instagram ad cost (with example)

Let’s say your target revenue is $40,000, your average revenue per conversion is $1,000, your conversion rate is 3%, and your CPC is $3. Your Instagram ad cost can be calculated as follows:

Instagram Ad Cost = Required Clicks × CPC

Required conversions = 40,000 / 1,000 = 40 conversions

Required clicks = 40 / 0.03 = 1,333 clicks

Instagram ad cost = 1,333 × 3 = $3,999

Instagram ad ROI = ((40,000-3,999)/3,999) x 100 = 900%

In this example, your Instagram ad campaign would cost $3999 to generate $40,000 in revenue. This implies an ROI of 900%

How to improve your Instagram ad cost

• Optimize audience targeting to focus on the most engaged users
• Use visually appealing and high-quality content to attract attention
• Test different ad creatives and formats to find what works best
• Leverage Instagram Stories and Reels for lower-cost ad placements
• Continuously monitor and analyze your ad performance to adjust bids and budget