Instagram Ads Made Simple: How to Create Instagram Ads In 2023

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I’m sure you’ve heard stories about entrepreneurs running Instagram ads and having massive success. 

And they probably make you think about integrating ads into your own Instagram marketing strategy.

But just how much do Instagram ads cost, and how do you go about setting up an Instagram advertising campaign? These are a few important questions that I aim to answer.

In this guide, I’ll walk you through everything you need to know about Instagram ads, including how to set up your first ad campaign on this social network.

What Are Instagram Ads?

Instagram ads are posts that pop up on a user’s Instagram feed.

The business or person advertising pays to display the content across Instagram, which is often accompanied by a “Sponsored” label. 

what are instagram ads

Post ads typically appear in the form of a carousel, still image, video, or slideshow.

They can also feature a call-to-action button like “Shop Now” or “Learn More”. This depends on the campaign’s objective, i.e. whether you want to get traffic or conversions.

Types of Instagram Ads

Instagram also has many other ad types. The most interesting ones include:

  • Stories Ads
  • Explore Ads
  • Collection Ads
  • Shopping Ads

Here’s some information about each type:

Stories ads

Instagram Stories Ads appear between people’s Stories in full screen. 

Instagram stories ads

The call-to-action in Stories Ads encourages the audience to “swipe up” from the bottom of the story to shop or learn more. 

Plus, the ads allow you to utilize all capabilities of Instagram Stories, like adding video effects, face filters, and stickers to grab the attention of your audience.

Explore ads

Instagram has an “Explore” section that allows people to discover content linked to their interests.

But Instagram Explore ads don’t appear in that section. Instead, they only display after a user opens an image or video from Explore. 

Instagram Explore ads


The best thing about Explore ads is that you can run them alongside post ads by choosing Explore as an additional ad placement (I’ll talk more about ad placements later in the article).

Collection ads

Instagram collection ads enable audiences to view and purchase your products.

When users click on an item within a collection, the platform redirects them to Instant Experience, a type of an ecommerce storefront within Instagram.

types of Instagram ads


These creative Instagram ads typically include a collection of product images or videos.

Shopping ads

Instagram also lets you promote shoppable posts as ads. 

Users who tap on these ads are redirected to a product description page within Instagram. They can then buy the featured item from your mobile shop.

Instagram shopping ads

If you have an Instagram Shop for your business, you can create these ads on the fly. (To set one up, check out our post: The Ultimate Guide to Setting Up an Instagram Shop). 

Benefits of Instagram Ads

At its most basic level, running Instagram ads is an effective way to get your products in front of a vast audience. 

In fact, around 500 million people log into Instagram daily, so you have a large consumer base to target. 

Also, Instagram’s engagement is on the rise, meaning you can get a better response rate on Instagram compared to other social media platforms. Businesses using Instagram can generate 4x more interactions on the platform compared to Facebook.

What’s more, 80 percent of Instagrammers report making a buying decision based on something they discovered while using the app. 

This means you have an opportunity to drive sales by putting your business front and center of people’s feeds – courtesy of Instagram ads.

That’s not all.

On Instagram, you’re able to set up advertising using Facebook’s Ads Manager. If you’re already running Facebook ads for your business, the steps to create Instagram paid ads should come easy. As an icing on the cake, Facebook’s superior targeting and budgeting options are available to you. 

How Much Do Instagram Ads Cost?

Honestly, there’s no real answer to the question of how much Instagram ads cost. I, however, know from experience that costs tend to vary between target locations, days of the week, chosen demographics, ad placements, and other factors.

For example, it costs more to deliver Instagram ads to millennials than to adults, as 25 to 34 years old users are one of the most coveted audience groups on social networks. 

Likewise, Instagram ads price increases on weekdays since the platform gets higher levels of engagement during this time.

When it comes to ad placements, running Instagram feed ads costs more than other options. That said, AdEspresso reported that the average CPC for more ad placements is $1.20.

So how much budget should you set aside for Instagram advertising? Think how much a conversion is worth to you and spend $20-$50 at first. Then test everything and double down on the campaigns that work best. Use Instagram Insights to measure your performance and dedicate some extra money to ads that help boost your engagement and sales.

How to Create Instagram Ads

Instagram doesn’t have an ad creation tool of its own, but there are two ways to place ads on Instagram:

  • Promote an existing post within the app
  • Create ads via Facebook Ads Manager

Let’s begin with the easiest way.

How to run Instagram ads within the app

The simplest way to start advertising on Instagram is to promote a post that you’ve already created. 

Choose one that has generated the most engagement and tap “promote” in the lower right corner to run it as an ad. 

how to do Instagram advertising within the app

You’ll need to set up an Instagram business profile before you’re able to see the promote option. If you’re currently using a personal profile, here’s how to convert it into a professional one.

Previously, Instagram also required that you connect a Facebook Business Page to your Instagram account. 

But a few weeks ago, the company announced that it would allow new advertisers in some countries to create ads without having to link to a Facebook Page. 

So if you’re promoting an Instagram post for the first time, you’ll be able to track and manage campaigns right inside Instagram.

How to create Instagram ads using Facebook Ads Manager

Since Instagram and Facebook are tightly integrated, you can also use Facebook Ads Manager to create ads for Instagram. 

For those unfamiliar with it, Facebook Ads Manager is an incredibly powerful tool that lets you customize and pinpoint audiences. And you can also use it to define a campaign objective and track the performance of your ads.

To access Facebook Ads Manager, you’ll need a Facebook account with access to a Facebook Business Page

Plus, you’ll need to link your Instagram account to your Facebook Business Page. Here are the steps:

1) Open your Facebook Business Page.

2) Go to Page Settings > Instagram.

3) Click the blue “Connect Account” button.

Facebook ads manager Instagram advertising

4) Add details of your Instagram account.

5) Click “Save”.

Once done, Facebook will let you create and run Instagram ads using Facebook Ads Manager.

Assuming you’re a complete beginner who’s never run Facebook or Instagram ads, here are the steps to create your first Instagram ad campaign.

1. Pick an objective

To start, open your Facebook Ads Manager and click the green “+ Create” button in the Campaigns tab.

campaign setup Ads Manager

Choose between Guided Creation and Quick Creation. If you want step-by-step instructions on how to set up an Instagram ads campaign, choose Guided Creation.

Facebook Ads Manager will then present you with list of objectives across three categories:

Instagram ad objectives

Before you choose an objective, give some thought to what you want to achieve with Instagram advertising. Do you want sales? Customer data? Increased brand awareness? Think about your goal and then pick an objective that best matches your desired outcome.

Picking the right objective is crucial, as Facebook uses your selection to determine which ad objectives, bidding types, and ad placements will be suitable for you. 

If you’re running an online store, you will most likely be looking to increase sales. In this case, “Conversions” would be the most suitable objective for your Instagram campaign.

But using Instagram ads for conversions requires you to take an extra step: you have to create and install a Facebook pixel. This is a tiny code that you can place on your website to track conversions and sales. 

If your online store’s site is hosted on Shopify, you just have to copy the pixel code from your Facebook Ads Manager and paste it in the Pixel ID field in Shopify Preferences.

To learn more about the Facebook Pixel and its benefits, read our post: The Facebook Pixel, Explained.

Facebook Ads Manager also lets you decide where you want to send the people who click on your ads.

You can send them to your store’s website, an app, Messenger, or WhatsApp. 

Instagram conversions objective

2. Name your campaign 

After choosing your objective, Facebook Ads Manager will let you give a name to your campaign.

While you can use a generic name like “Campaign 1”, it’s best to include certain elements in your campaign name – for example, target location, creative type, etc.

Doing so makes it easy to identify different campaigns as well as measure their performance.

name an Instagram campaign

Next, decide whether you want to test campaigns against each other to determine which strategies work best. 

Through an A/B test, Instagram will test different campaign variations and allot the biggest budget to the one that performs best.

Insta ads a/b test

3. Set your budget and schedule

This part lets you define how much you want to spend on your ad campaign and for how long.

Here, you can choose between Campaign Budget Optimization and manual set up.

Campaign Budget Optimization is a new feature that identifies the ads that perform better and then allocates your budget to those. It does that while aligning with your spend limits and bid caps for each ad. 

Facebook campaign budget optimization

If you’re new to Instagram advertising, I highly recommend using Campaign Budget Optimization as it helps ensure you pay the lowest amount per conversion.

Facebook Ads Manager also lets you choose between a daily and lifetime budget. Here’s what you get with each option:

  • A daily budget makes your ads run continuously throughout the day while spending up to your allotted budget each day. 
  • A lifetime budget allows your ads to run for a specified period while pacing your budget over that timeframe.

If you set a lifetime budget, you can also define a specific schedule for your campaign. 

Instagram advertising budget

For example, you can configure your Instagram ads to run only on weekends or when your audience is the most active. 

To get an idea of what days and time are best to advertise on Instagram, check out our infographic: The Best Time to Post on Social Media.

4. Choose your target audience

Here’s where the fun begins. 

Through audience targeting, you can set up your Instagram Ads to reach certain demographics, interests, and behaviors.

For example, you might be selling a gadget and interested in targeting millennials in Australia. In audience targeting, you can enter “Australia” as the location and enter “gadget” and “technology” as interests under Detailed Targeting.

Instagram audience targeting

You also get the option to target Custom Audiences. These typically include people who have visited your website but can also refer to past customers whose information is saved in your contact list. 

With that covered, let’s move onto placements (aka. where you want your ads to display).

5. Select your ad placements

Facebook Ads Manager gives you two options for ad placements:

  • Automatic placements: This feature displays your ads across multiple properties based on where they’re likely to work best.
  • Manual placements: Selecting this option allows you to handpick the properties where you want your ads to appear.

For Instagram ads, choose manual placements and then check the boxes for Instagram-only properties.

ad placements Instagram

6. Create your first Instagram ad

The last step is where you pick a specific ad format, upload a creative and write your ad copy.

The following ad formats are available:

Instagram ad creative

Choose a format that makes the most sense for your Instagram ads campaign. 

Next, upload a relevant creative for your ad and write a text description to go along with it.

On a side note, make sure to pick the right Instagram ad size because the Ads Manager rejects inappropriate sizes for creatives. If you’re looking to run ads on Stories, this is a good time to check out our Instagram Stories dimensions guide

Instagram ad creatives

Pro tip: Instagram offers a range of apps you can use to enhance your ad creatives. Layout is one good option for combining multiple images into a single photo. For Instagram video ads, check out Hyperlapse for creating time lapse videos while in motion. 

If you choose “Conversions” as the campaign objective, you’ll also get the opportunity to pick from a variety of call-to-action texts. Select the one that’s relevant to your campaign and target audience.

call to action Instagram adverts

Once you’re satisfied with everything, hit the green “Publish” button to start running Instagram ads for your business.


Okay, that’s all about Instagram ads.

Now you know what Instagram ads are, the benefits they bring, how much they cost, and how to set them up for your business.

Before signing off, I encourage you to do one thing after you create your ads: measure their performance.

No matter how well-structured your campaign, evaluate the ads to check where you could improve and save money.

You might find that one ad creative is driving five times more conversions. Or one specific ad placement is resulting in lower costs. 

The easiest way to measure your ads performance is to use the built-in analytics inside Facebook Ads Manager. 

By tracking and learning from the reports this tool provides, you’ll be able to find the best ad sets to run for a given campaign.

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