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With over 2 billion monthly active users, Instagram is one of the most visible digital platforms today. But when you’re responsible for managing a budget, you need to know whether that visibility will translate into real business results.
Many decision makers are cautious about pouring money into platforms that seem trendy but may not align with their core business goals.
It’s easy to get caught up in impressive stats without asking the critical question: “Will this actually work for us?”
That’s exactly what this article will help you answer.
You’ll get a clear, practical look at the real benefits, potential pitfalls, and key factors that determine whether Instagram advertising is a smart investment or a costly distraction for your business.
Benefits of Paid Ads on Instagram
While there’s many benefits to running paid ads on Instagram, here’s a few that stand out:
1. Lower Cost Per Conversion (When It’s Done Right)
If you’ve ever ran ads on Google or LinkedIn, you know the drill… bidding wars. Every time you compete for a high-conversion keyword, you’re faced with steep costs. Instagram on the other hand works off cost-per-thousand impressions (CPM).
This means you’re not battling your competition for every click and it’s generally cheaper to reach the same number of users. This may result in a lower cost per conversion.
But here’s the catch: This only works when you do it right. If your targeting is off or your ad creatives aren’t compelling, you’ll waste money, plain and simple.
The Instagram Ad Algorithm rewards you when you have a strong creative with lower costs, which can help you achieve a lower cost per conversion.
However, to achieve this, you need to create a strong creative with high conversion potential.
2. Facilitates the Research process
Did you know that on average, today’s buyer has already made 80% of the buying decision BEFORE the first sales call?
Think about the last time you purchased a laptop. You didn’t just go to the store and pick one up from the shelf after talking to the sales assistant.
Instead, you likely did a bunch of research beforehand, to narrow your options and find what would suit you best.
In today’s market, the content economy perpetuates a cycle of purchasing behaviour that is based on research, which means if you want to influence buying decisions, you need to educate your customers with content.
A strong Instagram presence, supported by well-executed paid campaigns, can accelerate trust-building and facilitate the research process by showcasing brand authority, customer testimonials, case studies, or product demonstrations in a visually appealing format.
For businesses entering a competitive space, this faster trust-building cycle can shorten the path to a sale.
3. Fewer Barriers to Entry for Ecommerce Customers
Instagram Ads integrate perfectly with the platform’s shopping features. With shoppable posts and ads, users can explore your products directly within the app and make a purchase without leaving Instagram.
This seamless shopping experience eliminates friction in the customer journey, making it easier for users to buy, whether they’re browsing your feed or discovering your products through an ad.
This means fewer barriers to purchase and a higher likelihood of conversions straight from your Instagram ads.
Challenges & Drawbacks for Paid Ads on Instagram
While Instagram Ads has it’s benefits, there are also some drawbacks:
1. Visual-Heavy Industries Perform Best
Instagram is a highly visual platform.
Businesses selling products or services that don’t naturally lend themselves to compelling imagery may struggle to achieve strong engagement or conversion rates without investing heavily in creative production.
If your offering isn’t visually appealing, Instagram might not be your most efficient channel.
2. Higher Creative Resource Needs
Instagram users scroll quickly and are constantly bombarded with ads.
Over time, audiences develop ad fatigue, ignoring or skipping content that feels repetitive or overly sales-driven.
This means you need to regularly refresh your ad creative and messaging, which can drive up campaign management costs and creative resource needs.
3. Attribution and Measuring True ROI Can Be Tricky
While Instagram’s ad manager provides metrics like reach, clicks, and conversions, tracing full ROI (especially for high-ticket or long-sales-cycle products) isn’t always straightforward.
If your sales process is complex, involving multiple touchpoints across email, website visits, and calls, Instagram may influence a purchase without getting direct credit, making it harder to evaluate performance accurately.
Without solid attribution models in place, you might underestimate or overestimate Instagram’s real impact.
This is why setting up your data tracking the right way is so important, and it’s why this continues to be a focus of ours when we work with clients.
Are Paid Ads on Instagram Worth It for Medium-Sized Businesses?
The short answer? It depends, but it can be, if you approach it strategically.
For medium-sized businesses, Instagram ads can offer a valuable channel to drive brand visibility, generate leads, and boost sales. But it’s not a guaranteed win, and it’s definitely not the easiest path if you don’t have the right elements in place.
Instagram ads tend to work best for businesses that:
- Sell products or services with strong visual appeal.
- Have a clear understanding of their target audience and how to reach them.
- Are willing to invest in quality creative and regular optimisation.
- Have a marketing team (or partners) who can monitor, tweak, and scale campaigns based on performance.
- Treat Instagram as part of a broader marketing strategy, not their only channel.
If your business is already struggling to allocate marketing budget efficiently, has limited creative resources, or sells a complex B2B service that requires deep education before a purchase, Instagram might not be your highest-ROI channel.
When Instagram Ads Make Sense (and When They Don’t)
Instagram ads make sense when:
- Your target audience is active on the platform.
- You have strong visual assets or the ability to create them.
- You can invest in testing, optimising, and refining your campaigns over time.
Instagram ads don’t make sense when:
- Your product or service doesn’t translate well into visual storytelling.
- You expect immediate, large-scale results without a solid testing phase.
- You don’t have the resources to monitor and adapt campaigns regularly.
At the end of the day, Instagram isn’t a “magic bullet.” It’s a powerful tool, but like any tool, its value depends entirely on how and when you use it.
If your business has the audience fit, creative muscle, and strategic patience to work the platform properly, Instagram ads can absolutely be worth the investment.
If not, it might be smarter to focus your budget elsewhere, where you can drive clearer, faster returns.
Next, read our article on Facebook vs Google Ads to find out which is best for your business.
