How to Advertise on Instagram Without Wasting Your Budget

Instagram is no longer just a place to share your latest snapshots; it’s one of the most powerful advertising platforms for brands, entrepreneurs, and service providers. As a Fractional CMO, I’ve seen firsthand how the right Instagram ads strategy can transform your reach, attract high-value clients, and deliver real ROI — but only when you use it intentionally.

In this guide, I’ll walk you through exactly how to advertise on Instagram the smart way: with clear objectives, optimized targeting, compelling creatives, and a sustainable budget. Whether you’re testing your first boosted post or launching a full-funnel campaign, you’ll get the confidence and practical tips to make Instagram ads work for you.

Why Advertise on Instagram in 2025?

Instagram boasts a massive user base of 2 billion people. Engagement rates are significant as you look to reach your target audience, as this particular social media platform boasts an average engagement rate of 2-2.4%–statistics as high as 4 times greater than other platforms.

Organic reach, while an important part of brand awareness, is not always adequate in reaching your target audience. The market is flooded with organic reach strategies, making Instagram advertising a valuable part of your overall social media strategy.

Instagram is a powerful factor in purchase decision influence. As many as 72% of Instagram users report making purchasing decisions in response to something seen on the social media giant.

As a fractional CMO, I cannot overstate the importance of effectively reaching your target audience. Paid social can be an invaluable part of a balanced social media marketing strategy, making an Instagram ad campaign an important consideration for your marketing team.

How Instagram Advertising Works

Organic posts, boosted posts, and full Instagram ads are the different types of Instagram advertising. An organic post is one that is likely to be part of an overall ad campaign, while a boosted post functions as an organic post that has been targeted for promotion on the platform.

A full Instagram ad is a dedicated post that is utilized specifically as an advertisement across the platform as a whole, rather than appearing primarily or entirely to followers.

Instagram ads fit into the larger Ads Manager system found throughout Meta platforms. Because Instagram is a part of the larger Meta framework, Meta Ads Manager is the dashboard from which you manage ad placements.

Ad placements will be sprinkled throughout Instagram’s many different facets. Instagram Stories, Reels, and Feed are all on the table, as are the Explore and Shopping pages. Instagram Reels, Stories, and Feed posts (including Carousels) will all feature your campaign by connecting directly with your account.

Understanding how these different placement options work can actually give you a competitive edge. When you know the difference between ad placement in Instagram Stories and carousel ads, or the Discover page, you can tailor your campaigns to meet your unique needs.

Instagram Ad Types Explained

Instagram offers a variety of ad formats to help you reach your audience in fresh, engaging ways. Here’s a quick breakdown of each Instagram ad type so you can choose the best format for your campaign goals.

Photo Ads

Photo ads are ideal for simple, clear messaging. A photo ad is a quick snapshot of your preferred message, without requiring further investigation.

High-impact single images are ideal for a product launch or a quick announcement. These images should be striking, with strong branding, to make sure your audience knows what the product or service is and who you are.

Video Ads

Video can outperform static images for some campaigns. Video ads are best for campaigns focused on product performance. In a video ad, you can truly let your product shine and show it in action.

That being said, video (whether in Instagram Stories or on a feed post) does not always grab your audience’s attention. Shorter videos tend to perform better (unless it is an in-depth how-to), and if a compelling hook is not delivered in the first few seconds, you may lose your audience.

Subtitles are also something to take into consideration. Accessibility is important to make sure you are reaching as much of your target audience as possible.

Further Reading: 12 Instagram Video Ads Tips for 2025

Carousel and Collection Ads

If your campaign objectives involve higher engagement and sales, Carousel ads and Collection ads may be the better options. These formats provide more information to your audience, and allow for a more in-depth discussion of a product, service, or brand.

Multiple slides allow you to tell stories more effectively. While a single post or even a video can be effective, carousels are best for campaign objectives requiring an in-depth look or a larger amount of information.

Stories and Reels Ads

Stories and Reels ads are simultaneously more relaxed in their approach, and more important to get right. Stories and Reel ads are used for connecting with your audience on a more intimate level, and can be great for audience targeting focused on immersion.

Blending in with organic Stories and Reels is important to ensure you reach your campaign objective. Dedicated ads can seem far too spammy for the more relaxed layout of these modalities, so it is important to blend in without sacrificing your ability to stand out.

Explore and Shopping Ads

Explore and Shopping ads are the two types of ads that do not feature on your feed, but focus instead on reaching a larger pool of audience members. They are also managed through Meta Ad Manager, but they are intended for use to increase audience reach rather than boost existing campaign objectives.

Both Explore and Shopping ad placement have pros and cons. Some of the pros include:

• Greater reach. When you use these ad placements, you may reach a larger audience.
• Algorithm reliance. Instagram algorithms are designed to match brands and businesses with followers who will enjoy and continue coming back for more content.

The Cons of these placements include:

• Algorithm reliance. This can be a pro! Algorithms change constantly, however, making it important to continually refine your approach to secure effective audience targeting.
• Greater competition. Professional accounts are a dime a dozen on social media platforms like Instagram, so your digital marketing will need to be highly refined to stand out.

Despite the pros and cons, it is possible to effectively leverage Instagram Shopping when your business is product-based. By promoting your product on Instagram Shopping, you make the shopping process easier and more accessible for existing followers and target audiences.

How Much Do Instagram Ads Cost?

Instagram ad spend depends on the type of cost being calculated. The average Cost Per Click (CPC) for Instagram ads is $0.69. Instagram’s average Cost Per Mille (CPM) is between $2.50 and $4. Finally, the average cost for Cost Per Action (CPA) is anywhere from $5 to $20.

Such large ranges for ad spend depend on your market and the type of ad being used. When competition, audience, seasonality, and even the creative quality of your ads are factored in, you can see greater insight into how your ad spend will likely come out.

If you are looking into utilizing Meta Ads Manager and you are not sure of your cost per click and other ad ratios, it is best to aim high and develop your ad budget accordingly. Start out small, focusing on what you are able to devote to each cost per engagement, and gradually refine your budget as you develop a greater understanding of ad reach in your niche.

To effectively test small, create a small ad campaign, and opt for the type of ad that is most likely to see a large impact. Start with boosting an existing post, and see how far that gets your piece. From there, you can begin experimenting with custom audiences and lead generation.

Further Reading: 8 Benefits to Advertising on Instagram

How to Set Up Instagram Ads

Setting up Instagram ads might feel overwhelming at first, but with the right steps, you can launch a campaign that reaches your ideal audience. Use this simple guide to get your Instagram ads up and running smoothly.

Using Meta Ads Manager

Setting up your Meta Ads Manager is surprisingly simple. The steps are as follows:

• Set up your business account.
• Select an objective for your ad performance.
• Identify core components of your campaign: budget, preferred audience, ideal timeline, and creative direction.
• Finally, publish your campaign and monitor its success.

Prior to setting up your ad manager, make sure you know answers to questions regarding your objectives and audience. Do you want to increase brand awareness, increase traffic, or boost conversions?

Are your business goals focused on improving your existing audience’s engagement? You may prefer a core audience tag. A customer audience tag may be better for campaigns with multiple objectives. Identify your preferred audience to develop an effective campaign.

Finally, identify your budget. Going over budget may yield results, but can also tank your ad spend and sabotage your overall goals. Develop a realistic budget before setting up your ads.

Boosting Posts from the Instagram App

Boosting posts on the Instagram app is another useful approach to developing promoted posts. Boosting does not always make sense, however; if your intent is to reach large swathes of new audience members, a boosted post is likely not the best route to take.

Boosted ads do not have as much reach as ads developed in an ad manager. Nevertheless, I do find value in using boosted posts. They are a useful way to validate ideas and strengthen your overall approach to advertising.

Targeting Tips: How to Reach the Right Audience

Reaching the right audience requires a smart approach to advertising. To reach your preferred audience, focus on the following:

• Smart segmentation. Demographics, interests, and behaviors can all help determine the best segments for your ads.
• Broad vs. narrow targeting. Understanding the power of broad and narrow targeting can help you reach your audience effectively.
• Retargeting warm audiences. When your audience is not quite performing as you’d hope, develop retargeting strategies.
• Using Lookalike Audiences strategically. Lookalike audiences can help you find and target audiences who look similar to your own.
• Relying on the algorithm. Although the algorithm can hinder ad impressions, it can also work in your favor. Focus on consistent branding and smart content creation to make the most of the algorithm.

Further Reading: How to Identify Your Instagram Target Audience and Turn Them into Customers

Creating Instagram Ads That Actually Convert

Creating Instagram ads is one thing — making sure they drive real results is another. Use these practical tips to design ads that capture attention and turn viewers into customers.

Craft Strong Visuals

Strong visuals are clear and encourage your audience to stop scrolling. Real people, product demos, and behind-the-scenes shots are all great ways to support profile visits and conversions.

As you create strong visuals, do not forget mobile-first design! Mobile-first design is essential for an Instagram user base that is almost exclusively mobile-based.

Write Compelling Copy and CTAs

Whether you have a dedicated call-to-action button or you are simply encouraging a profile visit, make sure your copy is compelling and you always include a call to action.

Highlight the benefits of your products, rather than just product features. Doing so will make it easier to produce clear calls to action that line up with your goals and objectives.

Design for Sound-Off Viewing

Not all users can or want to listen to content on Instagram. Include captions for Reels and video ads, for easy sound-off viewing.

Subtitles are not quite straightforward; an overlay may be necessary for subtitles to be visible. Subtitles may also require motion to be visible. Make sure your subtitles are actually able to be seen.

Further Reading: How to Create Instagram Ads that Convert: 7 Cost-Effective Ways

How to Test, Measure, and Optimize

Your key Instagram ad metrics include CTR, CPC, CPM, and ROAS. By keeping an eye on each of these metrics, you can truly evaluate your ad performance.

To take each of those metrics further, use A/B testing. By testing different approaches–including creative changes, audience shifts, and even placement options–you can determine which approach works best with your needs.

As you go over your metrics, identify areas in need of change. Low conversions may indicate necessary changes to calls to action. Low engagement may indicate a need for more creative input.

Common Instagram Advertising Mistakes to Avoid

The most common mistakes I see as a fractional CMO include:

• Going too broad (or too narrow)
• Failing to align creative input with your audience
• Ignoring your landing page or conversion destination
• Ignoring ongoing optimization (i.e. setting it and forgetting it)

Should You Run Instagram Ads Yourself or Hire Help?

If you are looking for a small lift, an in-app boost is likely enough, without getting an ad manager or professional account involved. If, however, your Instagram ad formats are not performing well or your click-through rate is consistently low, it may be time to work with a freelancer, ad agency, or Fractional CMO.

Final Takeaways: Making Instagram Ads Work for You

Organic on its own will likely not result in massive results from your visual content, but paid alone may not produce the most compelling content. A combination of both will likely produce the best results for your digital marketing goals.

As you go, make sure you test different approaches, and learn which approach is most effective for your unique situation and individual needs. Start small, learn, and continue to grow with confidence in your approach.

Further Reading: A 17-Step Plan to Launch (or Revise) Your Instagram Marketing Strategy

Are You Ready to Make Instagram Ads Work for You — Without Wasting Your Budget?

Instagram ads don’t have to be intimidating. With a clear strategy, the right creative approach, and smart targeting, you can run campaigns that grow your audience, drive meaningful engagement, and deliver real ROI.

Paid ads should never replace your organic presence — they should enhance it! Learn, test, and watch your Instagram marketing become a sustainable engine for growth.

If you ever feel stuck, you know where to find me. I’m here to help turn clicks into customers, one ad at a time.