Instagram Ads: How To Advertise on Instagram

If you scroll through Instagram, it’s hard to miss the advertisements. Instagram ads are peppered throughout everyone’s feed, breaking up our normal content and tempting us to make unexpected purchases. These advertisements are effective too – according to Business Insider, 72% of users have made a purchase on the app.

Advertising on Instagram is a must, especially if your target demographic is a younger age group. 65% of Instagram users are between 18 and 34 years old, so any brand targeting millennials should include Instagram in their social media marketing strategy.

While it is both important and effective to advertise for free via a business account that shares normal posts and stories, putting some money behind a promoted post can make a huge impact on reach and customer conversion. Advertising on Instagram is vital to many businesses, helping to improve brand exposure, reach new customers, and retarget and convert interested users into paying customers.

Why Should I Advertise on Instagram?

Do you know how many active users are on Instagram? According to Statista, there are 1 billion active users as of June 2018. Instagram has become increasingly popular, and the huge amount of devout Instagrammers creates a huge audience for advertisers.

Advertising on Instagram can help spread brand awareness as you reach a larger audience, resulting in more clicks and potential future customers. Instagram has reported that 60% of people say they discover new products on the app, and over 200 million users visit at least one business profile daily.

In 2018, Instagram added a native payment feature that allows users to add a credit or debit card to their profile. Users can now make purchases from advertisements without ever leaving the app. This makes advertisements even more fruitful for businesses, as users may be more inclined to make a purchase due to the convenience of an in-app purchase.

Posting on your business account can already help you reach new customers and expand your brand’s online presence. Paying for a promoted advertisement has an even greater reach, and the cost of a well-targeted ad will most likely pay for itself and then some.

Instagram Ads and Links

One problem many businesses run into on Instagram is the fact that there are very few places to link to your website. Instagram posts do not allow active links in captions, so placing a clickable link with a post can be difficult. Instagram only allows one link in each account’s bio, which is why the phrase “link in bio” is so common in Instagram captions. If you have 10,000+ followers, you can include a link in your Instagram story, but this option isn’t open to every business.


With an Instagram ad, you can include a direct link to your website on the post. Users that view your post can very easily click the “Shop Now” banner across the bottom of your ad, directing them to your website and hopefully converting them into customers in just a few clicks.  

What Are Instagram Ads?

Instagram ads are paid advertisements in the form of Instagram posts or stories that are shown to a larger, more targeted audience. Advertising on Instagram can lead to improved brand exposure, new leads and customers, website traffic, and profit if customers take action.

You may think, “why pay for an ad when I could just post on my account for free?” While promoting your brand on Instagram by sharing from your account page is encouraged, Instagram ads have more reach than normal posts. Advertisements are promoted and placed on feeds of targeted users, while normal posts are generally only seen by your followers.

There are a few different types of Instagram ads. You can advertise via photo ads, video ads, carousel ads, collection ads, and story ads. Instagram is a visual platform, so it should be noted that all-text advertisements are not supported; you could advertise a picture of text, but this is not recommended.

Photo Ads

Photo ads are just that: a single picture shared on Instagram. Promoted Instagram ads include a banner across the bottom of your post reading “Shop Now” or “Learn More” that links to your website. A good photo ad should feature a high quality image and a compelling caption that includes a call to action for customers to follow.

advertise on instagram

Video Ads

Video ads can last up to 60 seconds and give advertisers the opportunity to combine a vibrant image with sound and motion. If your business chooses a video ad, make sure that the video is high quality.

video ad instagram

Carousel Ads

Carousel ads are the Instagram posts that include a series of photos for users to swipe through. The caption can change with each picture, making it easy to advertise a few items at once. Carousel ads can include photos, videos, or both, and range from two to ten images per post.

insta ad carousel ad

Collection Ads

Collection ads are similar to carousel ads in that they can include multiple images, but collection ads link directly to a page with various products to purchase. Instead of swiping through a few images, create a collection ad where users can swipe up to immediately browse through available products. Check out this demo from Ad Age that shows fashion brand Revolve’s collection ad.

Story Ads

Story ads are the promoted Instagram stories that appear in between users’ follower stories. With 500 million active story-viewers daily, Instagram stories reach a huge online audience and have grown in popularity for both advertisers and Instagram users. The swipe up function on stories can bring viewers directly to your business’ website.

insta story ads

How Much Do Instagram Ads Cost?

There is not a set, flat price to pay for an Instagram advertisement. The cost of advertising on Instagram depends on a few factors, some of which are not made entirely clear by Instagram.

Much like Instagram’s parent company Facebook, which determines ad cost in part by an ad relevance score assessed by Facebook, Instagram ads are priced based on various factors like target audience, ad feedback, and relevance. Cost is based on cost-per-click (CPC) and cost-per-impression (CPM) in Instagram’s ad auction.

Instagram Ads’ Cost Per Click

A 2017 study by AdEspresso revealed that the average CPC for Instagram ads ranges from 0.70 to 0.80 cents per click. The cost of advertising has increased since then, however, and a 2018 study revealed more insight into the cost of ads and how the ad auction works. Here are some key takeaways to know about the cost of Instagram ads:

    • The average CPC by country is $2.40. The US CPC is $3.56, making it more expensive to advertise to US users.
    • CPC by age group is around $1, with the highest CPC in the 25-34 age bracket at an average $1.07 per click.
    • Average CPC increases monthly as the year goes on. Q4 (October – December) has the highest cost, but is also high reward around the holidays.
    • CPC is higher on weekdays as opposed to weekend days.


How the Instagram Ad Auction Works

Purchasing an ad space on Instagram requires that you enter an auction, much like Facebook’s auction system. Advertisers must set a budget of the total amount they’re willing to spend, which they can specify to be set over one day or over a longer campaign. They also set a bid, which is the highest price they’re willing to pay for a user to complete an ad objective.

The highest bidder does not necessarily get the ad space; Instagram wants to show users content that most interests and engages them based on the new algorithm. The auction winner is the ad that creates the most value for the target audience.

The three major factors that affect ad auctions are the bid, estimated action rates (the odds that the user completes the desired action), and ad quality and relevance to its specific target audience. If your ad is not relevant enough, the cost will increase to place it in front of your desired audience.

How To Create Instagram Ads

To promote ads on Instagram, you must also have a Facebook business page. Since Facebook owns Instagram, the ad manager on Facebook is the same tool used for Instagram. If you own a business, you likely already have a Facebook page set up.

The simple way to create an Instagram ad is to take a post already shared on your account and promote it. To do this, just view the post while logged into your business account and press the blue “Promote” button on the bottom right corner of the post. You can set this up on Instagram, but to customize the details of your advertisement you should set it up on Facebook’s ad manager.

promote instagram post

Within the ads manager tool, you can set up your ad, choose your target audience, set goals for your ad, and set your budget and bid. Your audience can be targeted based on location, demographics like age and gender, interests, and behaviors online. You can also create custom audiences to retarget visitors to your site.

Advertising goals are based on the objectives awareness, consideration, and conversion. Awareness targets new customers who may not be familiar with your brand, consideration targets those who may want to learn more about your products and services, and conversion looks to make sales and get users to complete your ultimate goal of converting paying customers.

Best Practices for Instagram Ads

Now that you know how Instagram ads work, learn how to get the most out of your ads.

Focus on Audience

Your target audience is a very important factor when advertising. Not only does audience affect your cost-per-click, but they also determine how your ad performs. As a brand, you should know who your target personas are and create ads that speak to those users. Consider your audience in each step of the process: what image or images you use, word choice and tone in your captions, and ad placement, as you should consider when they’ll be online to see your ad.

Use Hashtags

Hashtags improve engagement on posts and can help you reach a larger audience. While your audience is already targeted when you create your ad, using relevant hashtags can help even more users see your advertisement. Check out our guide to Instagram hashtags to learn more.

Stay On Brand

Your ads should reflect the personality of your business or brand. Establishing a brand aesthetic is important for brand awareness and recognition, so stay on brand to appeal to your target personas and to create a memorable brand experience. Everything from your images, captions, tone, hashtags, and even filters should be true to your brand.

Include a Call To Action

Most Instagram ads include a call to action button across the bottom of the post. There are various options for what text to include on this banner: pick the one that makes the most sense for your objective. The banner is a clickable link to a website page of your choice, so link a page that matches your call to action. You can also include a call to action in your caption, but be sure to use text space wisely. Shorter captions tend to perform better.

Refresh Your Ads

Change up your ads to keep users interested. You may have a great ad that performs well, but if users are seeing it over and over again, they’ll stop paying attention to it. Keep ads fresh by updating content.

Track Performance

Track each ad’s performance, and learn from what works and what doesn’t. You can track ad performance on Instagram Insights or, for more depth, on Facebook’s ad manager. Look at key metrics for your business, whether you’re concerned with reach, traffic, conversions, etc. Assess how your ads are performing and make adjustments to optimize your advertising strategy.

Written by Erin

instagram influencers fitness

Top 20 Instagram Fitness Influencers

Calculate Your Instagram Engagement Rate