Instagram engagement is huge, but should it be in your ad budget after all?

Instagram’s premium ad prices have many businesses wondering: is it worth the cost? SocialTimes says ads on the social network should avoid the “hard sell.” Instead, businesses should focus on creative narratives and visuals that lead to conversions through other outlets like Facebook.

Yet data suggests that seeing the platform only as a branding tool could be a mistake.

Salesforce, one of the partners for Instagram’s ads API, found that ads on the platform cost 90% more per ad impression than Facebook at $6.29 per thousand impressions. While you might look at that higher cost for impressions, Salesforce also found that the cost per click-through on Instagram is $0.42- only $0.02 more than Facebook.

IG also enjoys a superior 1.5% click-through rate that is nearly double Facebook’s 0.84% click-through rate for ads.

Why is Instagram so expensive?

Instagram ads are currently at a premium because of its young user base, a core demographic for advertisers, and because of the higher conversions. Although there is some speculation that the high conversion rates are partially due to the novelty of new click-through ads it is important to note that Instagram has had sponsored posts for several years.

Another factor that lends value to IG ads is their equal size and positioning to regular posts, whereas Facebook ads are sometimes relegated to the sidebar or other minimized locations.

What works?

Direct-response campaigns, where app installations or website visits are the call-to-action, are doing especially well. As these advertisers drive up prices, it would appear that contrary to the SocialTimes stance, brand advertisers may wish to focus their marketing dollar in other areas.

Any social media marketing campaign requires a presence on both Facebook and Instagram, but which network is prioritized depends on whether raw impressions and branding or a click-through is more valuable.