A Complete Guide to How Instagram Advertising Works

A Complete Guide to How Instagram Advertising Works

Social media advertising is quickly becoming a prerequisite for businesses that want to succeed in the current digital-first climate. Everybody has some form of social media account, making the audience reach unmatched.

Instagram is a vast platform with a broad audience comprised of many demographics. Owned by Facebook, the Instagram app’s advertising functions through the Facebook Pixel, making for a seamless jump from Facebook-only advertising to Facebook’s family of apps. Discover more about running ads on the platform with a complete guide to how Instagram advertising works.

The Basics of Instagram Advertising

Instagram advertising is the method of buying media space on the Instagram platform to serve content to a targeted audience.

Instagram is part of the larger Facebook ads platform, so all media buying occurs via Facebook’s ads manager. It’s rare for a company to run campaigns exclusively on Instagram. It’s much more common and effective to run ads on automatic placements.

Automatic placements allow Facebook’s delivery system to make the most out of your budget by serving your ads on all placements available across Facebook and Instagram. Automatic placement serves a brand’s ads to the target audience on whichever platform is most likely to result in a conversion.

Reasons To Advertise On Instagram

While the reasons for advertising on Instagram align with those for advertising on Facebook and other similar platforms, Instagram does have a few features that make it unique.

Instagram Stories

Instagram stories come with a large audience reach. While Facebook also offers a story feature, there are over 500 million daily Instagram story users. With more than 85 percent of Instagram users posting to their stories each day, there is a clear demand for story content.

Prospecting and Remarketing Potential

It makes sense for brands to prospect and remarket to potential customers on platforms that already have their attention. People spend plenty of time on social media platforms such as Instagram each day, so companies would benefit from capitalizing on that.

Brands need to communicate their unique value propositions to their target demographic clearly, and Instagram is one of the best platforms to do this.

Data Points and Audiences

Facebook has thousands of data points for each of its users. The platform uses these endless data points to determine which ads to serve each user with extreme accuracy and relevancy. This means your company shows its ads to the people who are most likely to complete a conversion based on countless data.

Highly Customizable Campaign Options

Instagram and Facebook app campaigns are highly customizable. Facebook continuously adds new features each month to provide a better experience for both advertisers and users. Brands can adjust their campaigns to fit their current needs and goals while maintaining a pleasant experience for their users.

Opportunities for Reengagement

A substantial percentage of the population spends considerable time on Instagram. This allows digital marketers and brands to effectively remarket to users that made a previous purchase or visited a company’s site in the past.

The users that brands can remarket to via Instagram and Facebook are highly qualified potential customers. Companies must find a creative way to reengage these users and get them back to their websites.

Prospecting Capabilities

Facebook and Instagram allow companies to prospect new potential clients who have not yet heard of a brand. Much of marketing is providing solutions to problems people are facing. Marketing on Facebook and Instagram allows businesses to serve highly targeted ads to educate potential customers about the solutions these companies offer. It is a place of discovery for users. Companies can use their ads to tell compelling narratives that drive new users to their sites.

How To Set Up Advertisements on Instagram

While setting up a successful Instagram and Facebook advertising campaign requires expertise, time, and constant evaluation of results, you can get the basics of setting up a campaign here. Check out the steps to setting up an Instagram ad in Ads Manager.

  1. Start by opening your Ads Manager account.
  2. Press the “Create” button.
  3. Select your campaign objective.
  4. Set up your campaign budget.
  5. Establish who you want to serve ads to, and set up your audience targeting.
  6. When you get to the “Placements” section, you can select “Manual Placements” to ensure your ads only appear on Instagram. You can also choose “Automatic Placements,” and Facebook will serve your ad on the placement where your target user is most likely to convert.
  7. Set up your ads by implementing ad copy, your creative, and a URL for your landing page.

Keep in mind that this is simply the basic setup process to get an ad to appear on Instagram. The actual ad must be creative and have compelling visuals and robust ad copy to draw customers in.

Can Companies Advertise On Instagram Only?

While a company can choose to advertise on Instagram only, it’s not the best option. By running ads on Automatic Placements, companies enable the platform to leverage its machine learning capabilities to allocate ad spend dynamically between Facebook and Instagram. It does this by determining where the brand’s target market is most likely to convert.

Pro Tip: Segment your ad campaigns for each level of the sales funnel, and create messaging specific to that user. Following the creative best practices for dimensions and ratios, Facebook and Instagram outline is key to communicating effectively and connecting with your target audience.

Common Pitfalls of Brands Handling Their Own Instagram Ads

Many brands are new to paid social media advertising and start by running their own campaigns. Here are a few common pitfalls that brands tend to fall into when managing their own ads.

Lack of Segmentation

The lack of segmentation between different levels of the funnel is one of the most common issues that brands encounter. Consider setting up separate campaigns and ads for prospecting, mid-funnel, all website visitors, users who viewed content, and LTV past purchasers. This change allows you to implement specific messaging for each funnel level and allocate the budget more precisely.

Mismanaged Budget Allocation

When brands lack proper budget allocation, they often unintentionally decrease their ad’s effectiveness. The most common allocation issue is when companies dedicate too much money to remarketing—this leads to users seeing the same ad multiple times a day and experiencing ad fatigue.

Ineffective Creative

Creative and copy are the most important levers advertisers can pull to improve performance on Facebook and Instagram. They’re the most crucial part of an ad, as they determine if the user will trust or engage with the brand. Companies often invest too little in their creative, leading to creative that is not engaging or doesn’t follow Facebook or Instagram’s best practices.

Not Utilizing the Pixel Fully

It is a missed opportunity for brands to not implement Lookalike audiences, remarketing, and dynamic ads. These features use the Facebook Pixel to leverage the vast amount of data Facebook collects on-site and on its platform.

Lack of Audience Exclusions

It’s important to add proper exclusions to prevent a significant overlap between different audiences. Skipping this step can muddy the data and drive up the cost for brands.

How Logical Position Can Help

Here at Logical Position, we take a methodical and collaborative approach to paid social media advertising. We offer paid social media marketing services. Although we are the experts on Facebook, each of our clients is the expert of their own business. We love collaborating with our clients to understand what makes each company unique and what they want to accomplish through our partnership.

We take the time to understand our clients’ goals and are completely transparent about ad performance, changes we are making, and the thought process behind each change. We leverage the vast machine learning that Facebook’s platform provides while keeping a close eye on what growth opportunities lie within our campaign strategy.

Our goal is to methodically test different creatives and audiences and continue to refine our approach over time. Logical Position is a Global Facebook Partner, which gives us early access to platform news and updates and the ability to test new creative types and product features, allowing us to do meta-analysis across our clients and the industry as a whole.

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