Calculate KPIs and determine Instagram advertising costs

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You now understand how to roughly calculate your budget and can estimate the costs of your Instagram advertising. However, beyond your budget, there are other indicators for your Instagram ad costs that you should know in order to assess whether your Instagram campaigns are running profitably. We've prepared a KPI calculator for you to help you calculate this .

However, we will also look at the KPIs contained therein in more detail, namely:

CPC (Cost per Click)
CPA (Cost per Acquisition)
CPM (Cost per Mille)
ROAS (Return on Ad Spend)
Important: These are not actual Instagram ad costs that you pay separately or based uruguay phone number data on which your Instagram campaigns are billed, but rather the costs broken down into specific factors. You can either have them displayed pre-defined in the dashboards of your Facebook Ads Manager or save them as a formula.

How to calculate the cost per click (CPC)
How much does it cost you for a user to click on your ad?

Step 1: The click-through rate (CTR)
The first step is to determine the expected click-through rate (CTR) as the basis for the CPC. The CTR indicates, as a percentage, how many users who saw your Instagram ad actually clicked on it. A CTR of around 1.5 to 2% is normal.

However, this also depends heavily on the industry. Some products are profitable even with a CTR of 0.8%. Therefore, the following applies: collect historical data from your Instagram ads and determine your CTR based on that.

For this example, we assume a CTR of 1.6.

Step 2: The impressions
So now you know your expected CTR. The next step is to calculate impressions. An impression means that a user has seen your ad. To calculate your impressions, multiply your target audience by the frequency. So:

Target audience * Frequency = Impressions


Step 3: The clicks
Step 3 on the CPC path involves calculating the expected clicks. These are calculated from the click-through rate and impressions. So, if I know what percentage of those who see an Instagram ad actually click on it, I can use the number of times your Instagram ad is seen to determine how often it will be clicked.