What is Instagram & How do Instagram Ads Work?

  • Last update: 24/10/2023

Benjamin Poirrier

Digital Marketing Expert

Instagram icon

How do Instagram ads work? First, here are the download links to install this social media app on your devices:

Read this blog to understand how to use this social media platform from an individual or business perspective.

What is Instagram?

Instagram (IG) is a free photo and video-sharing mobile network launched in 2010. Facebook acquired this social media platform in 2012. The creators named it “Instagram” as a blend of the words “Instant Camera” and “Telegram.”

how do instagram ads work
Instagram interface

The main purpose of Instagram is to upload photos and videos through mobile. There are many editing options available to customize those visual creatives. Thanks to captions, hashtags, geotags, and feeds, Instagram allows users to search profiles of interest conveniently.

As Instagram is smartphone-oriented, people can only post content via the mobile app. They cannot do it from the desktop version, which has limited features. Instagram emphasizes mobile use and visual sharing.

This is how Instagram differentiates itself from other social media channels. It focuses on visual creatives rather than text content. For those reasons, Instagram’s direct competitor is Snapchat.

People use Instagram because they can connect with brands, celebrities, friends, and family. This social platform is extremely popular among the teenage population.

In December 2010, Instagram reached 1 million monthly users. In 2019, this social media achieved the impressive milestone of getting 500 million daily active users worldwide. This number keeps increasing today. At the beginning of 2024, there were over 1 billion daily active users on the social platform, with around 2.5 billion users in total.

How to Create an Instagram Account?

Opening a new account on Instagram is a free and straightforward process.

Once you install the app on your smartphone (download links in the first paragraph above), you need to input the following mandatory information:

  • Phone number or email address (there is a verification code)
  • Name and username
  • Password

Instagram recommends users complete their profile with more information such as profile picture, gender, birthday, and bio.

You can also create an Instagram account by using Facebook. In this case, you only need to be logged in to your Facebook account. There will be a prompt to connect both.

Note that teenagers under 13 (depending on the country or jurisdiction) are not allowed to create accounts. In real life, the app is so popular that many kids have their own profiles.

To create an Instagram business account, you must create a personal profile first, then convert it into a business profile. Later in this article, we detail more about business accounts.

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Setting up an Instagram account

What are the Instagram Features?

Instagram keeps evolving with time. In 2010, the platform allowed photography sharing only. Today, there are more functions, like the carousel format added in 2017. Same as most social networks, people can like, comment, and send private messages to other Instagram followers.

Here is a 2024 updated list of the main features on Instagram:

  • Instagram Stories
  • Instagram Live
  • Instagram Direct (multimedia messenger to one or more people)
  • Instagram Questions
  • Instagram Guides
  • Instagram Shopping
  • Instagram Notes
  • Instagram Collabs
  • Instagram Reels (short video clips)
  • IGTV (standalone video application)

There are many more features available on this channel. For example, Instagram users do love the filters feature. The platform provides a free digital editing tool including 24 different filter functions. They make the photos and videos unique.

Who are Instagram Users?

Instagram is the most preferred social media platform for most teenagers. In its early stages, users were predominantly female (around 2/3 versus 1/3 of male).

In 2024, the worldwide users of Instagram are more balanced. Here are some updated statistics:

  • 30% of users are between 18-24 years old
  • 33% of users are between 25-34 years old
  • 51% female and 49% male
  • Mostly urban people

Instagram users uploaded over 50 billion photos on the platform, up to date. Every second, at least 1,000 photos are published. They spend 24 minutes per day on Instagram on average.

As this social media focuses on visuals, the top #3 interests are:

  • Travel
  • Music
  • Food and Drinks

Knowing that 81% of people use Instagram to research products and services, there are over 200 million business accounts on the platform in 2024. Around 1/5 of Instagram users visit a business profile at least once a day.

To date, there are around 65 million influencer accounts on Instagram worldwide, with more than half being daily active.

What are the Advantages of Instagram?

The primary purpose of Instagram is to connect people via engaging multimedia. If you want to share visual content with people, Instagram is the place to be. It illustrates the saying: “A picture is worth a thousand words.”

Before we go into detail, here is a short sum-up of Instagram’s advantages:

  • Top creative social media platform
  • Convenient to follow famous people and build communities
  • Casual and mobile-optimized
  • Privacy feature
  • Active community and high engagement rate

Instagram is a creative social media platform. The app encourages users to edit photos and videos before publishing. There are many filters available. This is a way of expression and a kind of art.

During the past 10 years, there has been a comeback of photography. Market experts ensure that Instagram is one of the main reasons behind this trend. There is no need to hold a professional camera to take pictures. With Instagram, people snap photos with their phones, edit them, and publish them quickly.

With this social platform, it is easy to follow celebrities and other Very Important People (VIPs). Overall, Instagram allows everyone to catch up with digital influencers, businesses, relatives, or the latest news. It is simple to build a community.

The casual tone of Instagram also contributes to its success. It creates a human side for businesses, and followers feel closer to them. This is a great opportunity for companies to approach their customers on this platform.

The User Interface (UI) is more optimized for mobile than any other social network. On Instagram, users only see photos and videos. There is no sidebar, links, or flood information affecting the visual experience.

Instagram Stories stay visible for 24 hours only. Apart from that, photos and videos uploaded on Instagram remain forever on the platform, until the user decides to remove them. Besides, it requires a single tap to share posts through Twitter, Tumblr, and Facebook.

There is a privacy feature. In the app settings, users can only allow their followers to see their publications. Other people must request the account owner’s permission, meaning you can create private communities.

Finally, the engagement rate on Instagram is high. Publishers and followers are extremely active on this social platform. Celebrities can expect their fans to quickly boost their awareness. Businesses achieve good Return On Investment (ROI) with Instagram ads, as we are going to see below.

How do Instagram Ads Work?

Once you create a business account (see the steps above), you get access to page analytics including hashtag, engagement, and impression metrics. Besides, a new “Contact” button appears on your profile (not available on personal accounts).

By default, people cannot add links to their organic posts. Once businesses reach 10,000 followers, the feature becomes available and companies can embed links to their Stories. The only other way to redirect followers to a website is to add a link to the profile.

Of course, all business accounts can run ads on Instagram. If the business is already on Facebook, it can also configure ads directly from the Facebook ad manager.

There are two main ways to get started with Instagram ads. The first one, similar to Facebook, is to simply promote organic posts without going through the whole ad manager tool’s process. For the second method, here is a step-by-step guideline.

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How do Instagram ads work?

Businesses willing to run ads on Instagram (or any other media channels) must have a clear goal. Same as Facebook, they can choose one of the following objectives:

  • Brand awareness
  • Reach
  • Traffic
  • App installs
  • Engagement
  • Lead generation
  • Video views
  • Conversions

The second step is to configure the target audience.

Lots of data analytics are available on Instagram. Depending on the product or service you offer, you need to know where the demand is. Understand the demographics and make sure you keep an eye on the competition. After all, if you are running Instagram ads, your rivals certainly are.

Instagram ads targeting options are:

  • Location
  • Demographics
  • Interests
  • Behavior
  • Lookalike

Once you define the audience, the next step is to choose the ad placements. If you want to run them only on Instagram (and not on Facebook), make sure to select “edit placements” instead of “automatic placements”.

After that, you will inform the tool about your media budget and ad schedule. During this step, the ad manager will inform you if your audience is too broad or too small compared with your expected investment.

The final step is to upload the creative. We will detail this part in the next section. Just remember there is no ad copy on Instagram. Businesses can only promote photos and videos.

What are Instagram Ads Formats?

Instagram is all about the quality and creativity of the visuals. Poor quality doesn’t work, either for organic posts or paid ads. Too much editing (ex: overdoing the filters) also kills the creatives. You need to find the right balance.

Here is a shortlist of the main ad formats available on Instagram:

  • Feeds (image and video)
  • Stories (image and video)
  • Explore (grants exposure on the Explore tab)
  • Shopping (products showcase or catalog collection)

Depending on the country, Instagram advertisers may also access extra options such as Canvas (360 VR), IGTV, or Reel ads.

Businesses should always consider visual editing and carousels when running ads on Instagram. Everything is good to grab the attention of the users.

Ads are published like organic posts, except that they have the text “Sponsored” next to the business icon. Overall, Instagram ads are perfectly integrated into the platform. They look “native.”

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Instagram ad sizes for various post formats

Pro-Tips to Run Efficient Instagram Ads

Prodima Vietnam ran hundreds of Instagram ad campaigns in the past. Our team of experts is glad to share valuable insights and best practices to help you get started.

From experience, we noticed the top industries getting the best results with Instagram ads are:

  • Travel
  • Food and Drinks
  • Beauty
  • Fashion
  • Health

Remember that Instagram followers’ activity is higher than the average social media channel (0.96% post engagement rate). 90% of people on Instagram follow brands. They expect to see fun posts (55%), real (53%), and creative (53%).

To maximize your ROI with Instagram ads, consider the following:

  • Design mobile-first ads (full-screen vertical)
  • Publish videos rather than pictures
  • Promote your e-commerce store (if any)
  • Tag products (so followers can shop them)
  • Use specific and relevant hashtags
  • Consider face visuals (whenever possible)
  • Include a Call To Action (CTA) button
  • Use large and short text
  • Keep ads simple and authentic
  • Run free contests
  • Use lookalike audiences
  • Focus on visual storytelling

As you can see, e-commerce businesses have a huge interest in advertising on Instagram. This is not surprising, knowing that Instagram partnered with Shopify to provide the best shopping experience for customers.

Once you launch your ads, do not forget to follow up and optimize the campaign. Here are the metrics to measure when running Instagram ads:

  • Followers’ growth rate
  • Reach
  • Engagement rate
  • Conversion rate
  • Referral traffic
  • Closed deals

Keep an eye on those Key Performance Indicators (KPIs) if you want to improve your campaign.

To go deeper, check this guideline to run Instagram ads.

Are You Ready to Go on Instagram?

Instagram is one of the fastest-growing social media platforms. It became most popular with the 18-29 years old community. On their side, teenagers feel that Instagram is more suitable for them than Facebook. There are plenty of opportunities for influencers or businesses to get visibility.

Creative communities are the core of Instagram’s audience. Fun, jokes, and personality are also a pillar. To understand this, have a look at the most liked picture on the platform so far. This Instagram photo of an egg got over 60,000,000 likes.

Let’s conclude with an interesting fact.

There is no way to run Instagram ads without having a Facebook page. On the contrary, businesses can launch Instagram ads without having an Instagram business account. In this case, companies must use their Facebook page to run their ads on Instagram.

Most companies can reach their customers on this social media platform. Prodima Vietnam is happy to support you. If you need to get started with Instagram ads, contact us so our team can prepare a digital plan for you!