Complete Guide to Instagram Ads for Ecommerce

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Instagram ads are now changing the way brands advertise online. With more than 400 million users monthly, Instagram truly earns its place as one of the world’s largest mobile ads platforms.

And unlike its early release, brands all over the world can now make creative and visually-engaging Instagram ads to connect even more with their target audience.

Countless brands are now experiencing great results with Instagram ads – increase in conversions and click-through rates, decrease in cost-per-install for mobile apps, better brand recall, and stronger brand love to name a few – and there is no reason why your business should not experience the same results.

Let this article be your complete guide towards Instagram promoted posts as we will discuss the different ad formats you can choose from, the different objectives supported by these ads, how to properly set them up, the different ways to use them, and the opportunities for growth that await you.

Instagram Ad Formats

To launch your Instagram campaigns, you need to decide first on the ad format you will use and there are three options you can choose from – photo ads, video ads, and carousel ads.

instagram ad formats

Photo ads are presented in the original Instagram format, but with purchase buttons and interactive navigation. This allows brands to share captivating imagery of their products, their brand story and more with the corresponding call to action.

Video ads offer the same visual experience as photo ads, but with motion and sound components added to it. Advertisers can choose from 15- or 30-second video ads, but Instagram is now expanding its video ad offer with a 60-second format, giving brands flexibility and opportunity to share longer creative material. T-Mobile and Warner Brothers were reportedly the first to try 60-second video ads on Instagram.

Carousel ads displays a series of images that a user can swipe to the left to view it. This is a great option for brands wanting to tell a quick story through photos.

When you go through your Instagram feed and you see that a post is tagged as a Sponsored post, you know it is an ad, but it is not enough to know what objective that Instagram ad is fulfilling in particular.

As an advertiser, there are objectives you can achieve with Instagram ads and these objectives are the following – Clicks to Website, Conversions, Mobile App Installs, Mobile App Engagement, Video Views, Reach and Frequency, and Page Post Engagement.

  1. Clicks to Website sends your Instagram users to the important pages of your website. The ‘Learn More’ call-to-action button often gives that objective away.
  2. Conversions allows you to get users to do specific actions on your website.
  3. Mobile App Installs helps you increase the number of users installing your mobile app on their devices.
  4. Mobile App Engagement lets you promote and have more activities going on in your mobile app.
  5. Video Views allows you to tell a story complete with sight and sound components.
  6. Reach and Frequency enables you to make your messages received by your target audience by allowing you to predict the reach and control the frequency of your messages.
  7. Page Post Engagement helps you get more people become truly engaged with your ad.

With the exception of Page Post Engagement and Video Views, all these objectives are available in photo, video, and carousel ad formats. Page Post Engagement is only available in photo and video ads and Video Views only on video ads.

How to Set Up Instagram Ads

To start advertising, Instagram sponsored ads must be properly set up and there are two ways to do it.

First option is to connect your Instagram account to your Facebook page. Once connected, you can start using your Ads Manager account to create your sponsored ads.

Another option is to do it using Power Editor. You need to have a Facebook Business Manager account for this.

As we will explore both options, you might see that the first option is actually easier to do than the second option.

First option

For the first option, you need to connect your Instagram account to your Facebook page. Make sure you are an admin of the Facebook page in order to do this.

On the left side menu of ‘Settings’, select ‘Instagram Ads’.

how to set up instagram ads

Click on ‘Add an Account’. Select ‘Add an existing account’ and provide the username and password of your Instagram account. You can select ‘Create a new account’ if you want to set up one.

add an existing account instagram

You will then be led to this page.

instagram ads setup

On a separate tab on your browser, open your Ads Manager account. You will be led to the first step in your Instagram campaign, which is to choose your objective.

For illustration, let’s say your goal is to drive people to a specific page on your ecommerce site. For that reason, choose ‘Send people to your website’ as your campaign objective and enter your ecommerce URL.

Click ‘Create Ad Account’.

how to set up instagram ads

Once you are on Ad Account, enter your account info – account country, currency, and time zone – and then click on ‘Set Audience & Budget’. Ads on Instagram cost differently from other platforms so make sure that you allot well.

set audience and budget instagram ads

On the Ad Set, configure your Audience and your Budget & Schedule. Once done, you’re ready to choose your Ad Creative where you can choose how you want your ad to look whether a photo ad, a video ad or a carousel ad.

choose format of instagram ads

Choose the image you want to show in your Instagram ad and ensure that it adheres to the recommended image specs. Browse through your library, choose from Facebook’s free stock images or upload your own photos.

instagram ad creative

Next, configure the text and links you want to use. Make sure that you are connecting to the right Facebook page and Instagram account, your Instagram ad caption is properly filled out and you have selected your desired call-to-action button.

configure instagram ad

Click on ‘Review Order’ for a quick preview of your Instagram ad before clicking on ‘Place Order’.

Second Option

This second option is obviously more suited for businesses that already own a Facebook Business Manager account. To get started, access the Power Editor inside your Business Manager account.

Click on ‘Download’ to load your campaigns or ads on Power Editor.

To be able to create your Instagram ad, you need to create a campaign first. Click on the ‘+ Create Campaign’ button and start filling out the form that will appear.

Select ‘Create New’ under ‘Choose a Campaign’ and enter the campaign name. Buying Type can be ‘Auction’ or ‘Fixed Price’. Objectives in Power Editor are the same in Ads Manager. For this illustration, we’ll choose ‘Clicks to Website’ for the objective.

Check ‘Choose an Ad Set’ as well and provide a name for it. Same procedure goes for ‘Create New Ad’.

create instagram ads on power editor

Once you are done, click on ‘Create’.

With your campaign now created, what you need to configure next is your Ad Set and you can do so by going to the second level as indicated in the arrow below.

instagram ads configure ad set

Once you are on Ad Set, fill up the different fields for Budget, Schedule, Audience, Placement, and Optimization & Pricing.

instagram ads optimization

First is your budget. You can set a daily or lifetime budget depending on how much you can allocate and how long you want your Instagram campaign to run.

set up budget for instagram ads

Second is your Schedule. Set the start date of your campaign and indicate when it is going to end. You have the option not to indicate an end date by selecting it as an ongoing campaign.

schedule instagram ads

Third is your audience. Unless you do not have Saved Audiences from your past campaigns, you need to click on ‘Edit Audience’ and start configuring. Enter your appropriate inputs for Locations, Age, Gender, Languages, other Detailed Targeting values, and Connections. Once you’re done, click on ‘Save’.

instagram ads saved audiences

Fourth, choose the Placement by checking on Instagram and unticking the other options. For the Mobile Devices option, you can set it at All mobile devices, Android devices only, or iOS devices only.

instagram ads placement

Fifth is Optimization & Pricing. This is where you can optimize the delivery of your Instagram Ads. You can also set the bid amount automatically or manually.

instagram ads advanced delivery

And finally, the sixth step – Advanced Delivery. The Standard option is selected by default as it is recommended that your Instagram promoted posts run throughout the day. Select the Accelerated option if you want to choose otherwise.

Once you’re done, you’re now ready to create your Instagram ad. This step is very similar to the ad creation process on Ads Manager in the first option.

Make sure that you are connecting to the right Facebook page and Instagram account.

connecting Facebook to instagram account

Choose your Instagram ad format, the website URL, your ad’s caption, and call-to-action button. Select ‘Track all conversions from my Facebook pixel’ under Conversion Tracking.

complete instagram ad

Once you have completed the ad, click on the green ‘Upload Changes’ button on top of the screen to load the ad you created, which will now be reviewed by Facebook for activation.

Open your Facebook Ads Manager account to view and check the status of your Instagram ad.

How You Can Use Instagram Ads

Now that you know the different Instagram ad formats, objectives, and how to set them up step by step, the question that needs to be answered now is how to use Instagram to promote your business?

With Instagram, ecommerce sites of any size have a way of promoting their products more. And while your goal may not be to have the best Instagram ads out there, you can maximize Instagram’s many uses in making your brand truly successful on social media.

How? We’ll list down six ways.

Give your customers a behind-the-scenes look about anything that revolves around your brand. Whether it is a behind-the-scenes footage of a new product you are about to launch or a short video introducing the different people behind your brand, sharing these tiny snippets helps build excitement and interest among your target audience.

instagram ads behind-the-scenes look

This behind-the-scenes photo of Macy’s fashion shoot gives their followers a sneak peek into their upcoming line of fall-ready leggings. Include a similar take in your campaign strategy because sharing your story, and not just your product photos, is a great way to increase your fans’ awareness, love and appreciation for your brand.

Attract user generated content (UGC). Running UGC campaigns on Instagram allows you to use your target audience’s content to achieve your ecommerce goals. And using their submitted photos and videos and turning it into Instagram promoted posts can motivate other users to share their own.

You will be surprised too at how willing people are in sharing their content with the brands they love on Instagram. And it’s totally a win-win situation – the featured Instagram user will get visibility, thanks to the 300K+ followers of the brand and the brand gets product testimony and visibility on the user’s’ set of followers.

Use it as an outlet for out-of-the box advertising. Instagram is great for businesses with physical products, but that does not mean service-oriented ones are out of the picture and a great example of this is PayPal.

instagram ads out-of-the box advertising

We all know that PayPal is one of the biggest money transfer systems. Aside from making monetary transactions fast, convenient, and secure online, they now also allow their users to “PayPal-it” or pay for meals in restaurants and diners offline using their new mobile app.

PayPal users are encouraged to share their experience with the new mobile app on Instagram and use the hashtag #paypalit. Similar to an earlier point on UGCs, submitted photos from satisfied PayPal users are turned into sponsored ads.

Hold contests. Although there are many ways and places to hold contests on social media, including Instagram ads in your strategy can give it an extra boost. The mechanics for Instagram contests are pretty straightforward (e.g. submit photos and use contest hashtags), which means more people are likely to participate.

High Society Free Ride ran a great promotional campaign on Instagram by giving away gift certificates to users who will submit Instagram photos showing what they love to do when they are outdoors. The mechanics were simple – follow High Society Free Ride on Instagram, use the hashtag #OneLifeMakeItCount and tag @HighSocietyFreeRide in their posts.

instagram ads for contests

Update customers of your latest offers. There are many ways to use Instagram for business marketing and it goes without saying that having sponsored ads on Instagram is a perfect way to update your customers of your latest product offerings.

Aside from their daily mouthwatering snapshots, Ben and Jerry’s also uses Instagram whenever they want to drive awareness for a new ice cream flavor they are launching. They did this when they launched their Scotchy Scotch Scotch flavor.

instagram ads update of latest offerings

They posted a series of four sponsored photo ads over the course of eight days while targeting Instagram users aged 18 – 35 years old. Aside from reaching 9.8 million users, the ads also scored a 33-point increase in recall and alerted 17% of these users of their new ice cream flavor.

Lead shoppers to act. With the different call-to-action buttons that can be included to support your campaign objectives, Instagram ads can be truly reliable in driving your followers to do what you specifically want them to do.

instagram ads to lead shoppers to act

With the proper creation of your Instagram ads, you can direct your target audience to ‘Shop Now’, ‘Install Now’, ‘Sign Up’ or ‘Learn More’.

Your Opportunities for Growth

Aside from inspiring people visually about your business, a good number of growth opportunities are waiting to be uncovered with Instagram ads. Let the following case studies prove that using Instagram for business marketing is indeed a smart and practical choice – ecommerce and non-ecommerce alike.

Increase ad recall

LG Household & Health Care, Ltd. is a brand of skincare products in Korea that targets 20- to 30-year old Korean women. They wanted to promote and increase awareness for the launch of their new product, the S:um37 Secret Essence, and they used Instagram ads to tell a visual story.

instagram ad increases ad recall

In a span of three weeks, they ran a combination of photo ads, carousel ads, and a 15-second video ad.

The photo ads featured powerful product visuals, such as their signature glass packaging against the view of the sunset or the sea. The carousel ads gave them the opportunity to engage with their target audience visually while driving them to their ecommerce site. Their 15-second video ad, on the other hand, highlighted the natural fermentation process unique in S:um37 Secret Essence and they stitched it with the idea that real and natural beauty takes time to grow. These ads were all paired with the hashtags #Sum37, #SecretEssence and #SumEssence.

At the end of the Instagram campaign, a 44-point lift in ad recall was achieved plus 138K in daily video views and a 4-point lift in brand awareness.

Increase traffic to website

EF Shop is an online fashion retailer in Taiwan. They are popularly known for selling locally-made and high-quality apparel for women.

The online fashion industry in Taiwan is very competitive and EF Shop wanted to distinguish themselves by increasing brand awareness and generating demand from millennials, which are all hoped to drive traffic to their ecommerce site.

instagram ads increase traffic to website

After running four Instagram photo ads fashionably featuring their Autumn and Winter collection with ‘Shop Now’ as the call-to-action button in a span of three weeks, EF Shop saw a 10% increase in their website traffic as well as a 29-point lift in ad recall and a 4-point increase in campaign awareness.

Adding the ‘Shop Now’ button definitely helped interested shoppers to go straight to their mobile site to complete their purchase.

Lower CPI and increase app installs

A Japanese resale app, Mercari, wanted to achieve two things – increase their mobile app installs and lower its cost-per-install (CPI). They designed their Instagram campaign to reach people who were not responsive to their Facebook ads.

They ran Instagram ads that catered to their male and female audience separately. They used images that they knew appealed to each group. They edited the photos lightly with Instagram filters and finished it off with short captions to eliminate the mention of the prices.

instagram ads benefits

Mercari was already achieving a low CPI rate with their Facebook campaigns, but they saw the rate go down even more when they extended it to Instagram. It decreased by 38% more and app installs also increased by 53%.

Build better brand or campaign awareness

A brand popular for its quality leather goods in Japan, Tsuchiya Bag, wanted to further establish their brand as a seller of quality leather products. They turned to storytelling in their Instagram ads, showcasing the fine and exquisite qualities of their leather and how their bags have become great companions in the hands of their owners through the years.

instagram ads for better brand awareness

The emotions evident in the images and captions helped Tsuchiya Bag achieve a 6-point lift in brand awareness and a 29-point increase in ad recall.


Although there are concerns raised about how ads on Instagram cost and how it often pales in comparison with other platforms, including Instagram promoted posts in your social advertising strategy certainly has its benefits. It is a worthy consideration, especially if you want it to work alongside your other campaigns that follows the same objectives.

If you want to know how to use Instagram to promote your business, always check the goals you want to achieve. The ad formats and the specific objectives are all easily laid out for you; it is just a matter of selecting them and building your ads properly on Ads Manager or on Power Editor. The steps may be tedious at some point, but it is only in ensuring that it is properly configured that you can start taking advantage of what Instagram ads can do for your brand.

Be creative with your Instagram campaigns.

Remember that it is not always about creating the best instagram ads; it is about crafting ads that are aligned with your brand, well-oriented to your goals, and resonates well with your target audience. Invest wisely on your visuals and captions and go beyond just using Instagram in sharing behind-the-scenes stories or using it as a venue to host your contests.

It also helps to look at how other ecommerce brands are using Instagram ads in their marketing efforts. Instagram for companies started to be available only to a select group of brands, but today, small- and medium-sized businesses can now enjoy it. Advertising on Instagram only gets exciting as more enhancements and features are added.

Let Instagram be your canvas to engage with more people, to expand your reach and to keep your numbers growing at the rate that you want it.

About the Author

John Komarek is the founder of Pixelter. He helped over 63 e-commerce businesses boost their mobile sales by up to 183.5%. He uses advanced UX research, A/B testing, and AI-driven personalization to deliver the results. Learn more about how he can help you grow your sales.

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