Does Instagram Advertising Work?

Yes, if you understand how to do it right. Advertising on Instagram is a relatively new thing for most NZ businesses, but it is becoming more popular.

With over a billion monthly users globally - and hundreds of thousands of Kiwis engaging with the platform daily - Instagram has cemented its place as one of the most powerful digital advertising tools available to New Zealand businesses.

Instagram’s user engagement is so high because the content on Instagram is 'organic' and therefore not perceived by users as a sales-platform.

Is Instagram worth it?

Instagram’s highly visual format and mobile-first experience make it an ideal platform for building brand awareness, showcasing products, and connecting emotionally with potential customers.

It’s especially effective for:

• Driving traffic to your website
• Boosting brand engagement
• Generating leads or sales
• Remarketing to recent website visitors

In fact, many NZ businesses are now using Instagram as a complementary channel alongside Facebook and Google Ads, particularly for B2C sectors like retail, beauty, food, fitness, and lifestyle.

How much does Instagram advertising cost?

You only pay if you actually ‘promote’ your posts. When you promote a post, Instagram will recommend a budget based on the budgets used by businesses similar to yours. This will be similar to the cost of advertising in Facebook.

For Instagram advertising, it's around $5-$10 per day for small to medium sized businesses. However, you are at liberty to set a low total budget of $10, and run the promotion for (let’s say) 10 days, equivalent to only $1/day. But, in that case, the number of people who see and click your ads will be low.

The general rule is that, if the return on investment (ROI) is positive, think about increasing your budget a little, then re-test.

Like Facebook, Instagram offers analytics reporting about Likes, Comments, Saves, Impressions, Reach and Engagement.

Should you advertise on Instagram?

Although Instagram’s engagement is the highest, it is also slowly decreasing. This is because more and more advertisers are jumping on the platform without understanding Instagram’s users.

Today’s most successful Instagram advertisers know not to be sales-focused and instead focus on making users fall in love with their brand’s story. Don’t think it’s worth? Or maybe you think Instagram doesn’t sound very appropriate for your business? Think again.

Instagram Demographic Statistics

According to Pew Research Centre's 2016 Instagram Demographics Update, 32% of all internet users are active on Instagram (currently the second most popular social media behind Facebook). 26% of all males on the internet use Instagram, compared to 38% of all females (even though there's more female users, that's still over a quarter of all males!).

59% of people aged 18 to 29 years old use Instagram, 33% of 30 to 49 year olds use Instagram, and 18% of 50 to 64 year olds use Instagram (Instagram isn't just a platform for students).

27% of people who have not attended any university use Instagram, 37% of people who have attended some university, and 33% had at least graduated from university (a reasonable shift towards 'more educated' people).

38% of internet users who earn less than US$30,000/year use Instagram, 32% of people between US$30,000/year and US$50,000/year, 32% of people between US$50,000/year and US$75,000/year, and 31% of people over US$75,000/year (income doesn't hugely correlate with Instagram usage).

39% of urban residents are users, 28% of suburban residents and 31% of rural residents (it seems that, as long as people have some access to internet, they will use Instagram regardless of where they live — of course there is a slight shift towards urban residents who have access to faster broadband speeds).

Instagram Trends 2025

First thing’s first, Instagram is over 95% mobile. That means, regardless what your business, products or services are, if your customers are smartphone users, you need to consider building a presence on Instagram.

Reels dominate engagement. Short-form video content is king. Reels are outperforming static posts and Stories in terms of reach and engagement. If you’re not using Reels in your ad mix, now’s the time.

In-App shopping continues to grow. Instagram Shopping features are now more integrated than ever. Shoppable posts, product tags, and in-app checkout are streamlining the buyer journey. Brands that make it easy for users to browse and buy are seeing real results. You can expect it will have many functional similarities to the shopping sections currently available for business pages on Facebook.

AI-powered creative tools. Instagram now offers built-in tools that use AI to recommend content tweaks, headline variations, and even auto-generated captions - great for small businesses looking to scale creative production.

Hyperlocal targeting is more accurate. Geo-targeting by suburb or postcode has improved, allowing NZ businesses to reach specific communities with tailored messages—ideal for events, retail, or location-based services.

Instagram is no longer “just for the kids.” It’s a mainstream and fast-moving advertising channel with serious ROI potential for NZ businesses.

Whether you’re in retail, hospitality, services, or B2B, Instagram advertising can help you grow brand awareness, reach new audiences, and drive real business results.

👉 Need help running ads on Instagram?

Contact us for a free consultation. We help Kiwi businesses of all sizes get more from their digital marketing through results-driven, transparent Instagram ad strategies.