Instagram Ad Strategy 2021: Step-by-step Guide

Do You Have An Instagram Ad Strategy For Your Business?

We’re looking forward to diving right into today’s post walking you through creating a strategy for your Instagram ads, step-by-step.

We’ll also show you how to set up custom and Lookalike audiences.

So stick around, as we’ve got tips for monitoring your ad performance and step-by-step tutorials on how to develop your Instagram ad strategy.

Grab your coffee and pen and let’s go!

Why Your Business Should Be On Instagram

Since you’re reading this post, we’re going to assume that you’ve already decided that Instagram is an important part of your marketing strategy.

So, we won’t spend too much time convincing you why you should use it.

But here are some impressive stats in case you’re not sold.

• 1 billion people use Instagram every month
• 51% of users are female and 49% are male (so your audience is there)
• 130 million users tap on shopping posts every month
• 50% of people have visited a website to make a purchase after seeing it on Instagram

Instagram is working at adding more features to make selling on the app even easier for small businesses.

Some of their future plans include the ability to link shoppable collections in live videos.

How Is Instagram Changing & How It Affects Your Instagram Ad Strategy?

Instagram’s head previously said that Instagram is no longer a photo-sharing app.

In the video posted on his Instagram, Adam Mossier said Instagram is focused on four areas of growth:

• Creators
• Video
• Shopping
• Messaging

This will affect your Instagram ad strategy now and into the future, so it’s important to keep up with these new Instagram updates.

But, you can get a head-start by focusing on improving your video posts and ads.

Put out better quality video content more often to start preparing for the new priorities on the app.

Here’s what we’re telling all of our clients to prioritize for upcoming changes:

• Improve the quality of your videos.
• Increase your video production.
• Get comfortable with live video. Practice, practice, practice.

What About Organic Growth?

In this post, we’re focusing on your paid Instagram ad strategy. However, any good marketing strategy considers paid and organic efforts.

Organic growth can happen, but it’s getting more difficult on every platform, Instagram included.

Working on your organic growth will help your ads cost less over time, because it’ll be easier to find folks to engage with your content.

The best way to grow your follower count, and get your posts and business out to the right people is by running ads.

You can promote specific posts or your profile as a whole.

But, you should plan to spend at least a couple of dollars a day to run continuous Brand Awareness ads and Boosted Post ads.

Let us explain how we do that. Here’s one of our favorite strategies for growing our client’s Instagram accounts:

1. We optimize their profile; the image, description, and links.
2. We create an organic strategy; we decide aesthetic, feed placement, write captions, and create the content.
3. We schedule our posts a month in advance. We may post more or go live randomly, but we have our base posts set.
4. We choose a video post that’s performing well in the feed, and run an ad promoting that post to a targeted audience.
5. We like to use an engagement metric, like Instagram Page Engagements, to build a Lookalike audience.
6. We let that run for a couple of weeks, or until we see it start to trail off.
7. Then we run an ad promoting the page (and asking for follows), retargeting anyone who watched the video.

If you use an Instagram ad strategy similar to the one we outlined above…

…you’ll find that your account grows much more quickly, and it really won’t cost you too much money.

You’re targeting an engaged, interested audience, not a bunch of randoms who won’t become customers, so the investment is worth it.

Experiment with this strategy and try different things to see what works for your business.

If you really want to lower your Instagram ad costs, then be sure to read this post next.

6 Steps To Build Your Instagram Ad Strategy

Step 1: Defining your goal for advertising
Step 2: How to use Custom & Lookalike Audiences for affordable reach
Step 3: How to choose the right ad topic for your audience
Step 4: Figuring out how much you’re going to spend
Step 5: Setting up your ads & launching them
Step 6: Monitoring your ads and evaluating performance

Step 1: What is Your Goal?

It’s important to establish your goal early on, because without that, you won’t be able to:

• select the right audience,
• create targeted copy, or
• even decide on visuals.

You probably already have an idea of what you want to get from Instagram ads, or you wouldn’t be reading this post.

On Facebook, goals fall into a few categories (which are actually called objectives):

• Awareness
• Conversion
• Consideration

Think about what your business needs right now.

More sales? Go for conversion.

Need to get more people to your IG account so they can see your stuff? Awareness.

Need to talk to more people so your sales team can do the work? Look for Consideration.

To start off your Instagram ad strategy, you need to know your goal first so that you know who to target and what kind of ad to show them.

Let’s talk about your audience next.

But before we do that, we want to invite you to check out our new social media ads training course online to help you grow your social media marketing skills.

Step 2: Find Your Target Audience & Customer Journey

You can’t make good ads if you don’t know who you’re making them for.

This is one of the most important steps of creating your Instagram ad strategy…

…because the wheels can really fall off a campaign if your target audience wasn’t the right match for your creative and goal.

You can sort potential audiences into as many categories and subcategories as you want.

But we like to keep them pretty simple, at least for most general small business advertising efforts. Those categories are:

• Potential new customers

These ads should focus on introducing your brand and products to new people.

These people have no idea who you are. We call this a cold audience.

• Customers who recently purchased from you

These ads should focus on encouraging a repeat purchase (when applicable). Show similar products, items from the same collection, or new arrivals.

• Loyal customers

These ads should focus on thanking your returning customers. Make them feel special by giving them early access, sneak peeks, special offers, etc.

• Abandoned carts

These ads should focus on re-engaging the customer. Use special discounts, limited-time coupons, first-time buyer deals, etc.

• Previous customers

These ads should focus on winning these customers back.

What have you improved or added since this customer left? What new offer can you use to entice them?

You can also create Lookalike audiences using each of the above suggestions.

Let’s say you want to sell more of the premiere chocolate snack box.

Most of the people buying this box are already customers that bought the smaller box first.

So you’ll retarget everyone who has purchased the smaller box.

You can also target people who looked at the smaller box product, but didn’t purchase.

We’ll go over Lookalike Audiences in more detail in a couple of minutes.

Custom Audiences on Instagram

It’s important to note, before we show you how to create a Custom Audience, that Instagram’s targeting options are constantly evolving.

And it is because of all of the new privacy laws, changes, and regulations going into effect all over the world.

You’ll need to stay up-to-date with the changes so you can run the most effective Instagram ad strategy possible.

How custom audiences work and why we use them:

Custom audiences use data and interaction from your website, Instagram account, and uploaded lists to show ads to those people on Instagram.

These audiences typically work better than cold targeting (using general demographics, interests, behaviors, and locations)…

…because they’re more likely to want whatever it is you’re advertising.

They’re considered a warm audience because they’ve interacted with you in some way.

These audiences also are less expensive to advertise to than cold audiences, precisely because their intent is higher.

And, these audiences are what you use to create Lookalike Audiences (we’ll show you how to do that in a couple of minutes).

You have a few custom targeting options for your custom audiences:

• An Engagement Custom Audience

This is made up of people who have engaged with your Instagram account in some way, like watching videos, liking, commenting, following, etc.

• Customer List Custom Audience

This is made up of people who you’ve uploaded from a CRM or an email provider like MailChimp.

If you have over 100 people on your email list or in your CRM, we recommend uploading that and creating a lookalike audience ASAP.

• App Activity Custom Audience

This is made up of people who have downloaded your app and who engage with the app, like opening, playing, and making purchases.

• Website Custom Audiences

This is made up of people who have engaged with your website in some way by:

• visiting pages,
• adding things to your cart,
• signing up for emails, or
• making a purchase.

You’ll want to try each of the targeting options that apply to you.

You can test them with different ad goals (like page follows, website clicks, purchases) to see which audience performs best for each goal.

Best Practices For Each Audience Type

1. Engagement Audience Best Practices

• Never buy engagement, or this metric is worthless to you.
• Make sure your content is worth engaging with!

2. Customer List Best Practices

• Make sure those people choose to be on your customer list.

Don’t buy random contacts. You run the risk of being marked as spam and losing the ability to advertise.

• Make sure you update these lists.

As you get new email subscribers, routinely add them to your custom list so they can be included in new ad campaigns and Lookalike audiences.

3. App Activity Best Practices

• Advertise to your App users on Facebook, and create audiences based on in-app activity.

For example, the purchases or number of days played or days since last open.

• Before you can use an audience for app activity you need a couple of things:
  1. Register your app.
  2. Set up the SDK and log app events on the Facebook for Developers website.
  3. You can select from 14 pre-designated in-app events or create your own.
  4. The app events your app is set up to measure will automatically populate in the drop-down menu during setup.

4. Website Best Practices:

• Track visitors to your website back to Facebook using your installed Facebook Pixel. You’ll manage Events to decide what to track.
• Show ads to visitors depending on their activity on the website (pages visited, adds to cart, etc.)
• Make sure you set up your Pixel and use Events to manage the events you’d like to track.

Let’s look at how to set up a custom audience now.

Let’s create a custom audience that we can use on your Instagram ad strategy:

1. From Business or Ads Manager, click the hamburger menu, find Audiences, and click it.
2. Now you’ll click the blue Create Audience dropdown, then choose Custom Audience.
3. Select your Instagram professional account (you’ll need to upgrade to one if you don’t have one yet).
4. From the dropdown, choose the Instagram account you want to use for your audience. You probably won’t have more than one option here.
5. Choose the engagement type you want to include from the available options. This will depend on your goals for the ad.
6. Add the number of days you want to include when finding people who have engaged with your account (maximum of 365 days).

The number of days is dynamic and indicates how long people who’ve engaged with your content will remain in your audience.

Once you’ve set up your custom audience with a timeframe, your audience will automatically refresh, so you don’t need to re-create this every month.

7. Choose any additional audience types and engagement types.

If you decide to include or exclude audience engagement types, remember that exclusionary rules override inclusionary ones.

So, if someone fits an exclusionary rule and also an inclusionary one, they will be excluded from the audience.

8. Add an audience name and optional description. We like to include audience identifiers and timeframes for easy reference in the future.
9. Click the blue Create Audience button.

You’ll be able to access this Custom Audience when you’re creating new ads.

We love custom audiences because they work great for retargeting.

Additionally, Custom Audiences are also important because they lead you to Lookalike Audiences.

And you definitely want to be able to use Lookalike Audiences.

What a Lookalike Audience Does and How It’s Made

A Lookalike Audience will find people who have never engaged with your business before…

…but who look or behave similarly to your custom audience online (the pages they like, the websites they visit, etc. are the same).

This will introduce an entirely new audience to you that will be beneficial to your Instagram ad strategy, but Facebook’s robots did that hard work for you.

You’ll need a source audience to create a Lookalike Audience, which you created using Custom Audiences.

The best source audiences are between 1,000 and 50,000 people. The minimum is 100.

How to Create a Lookalike Audience on Instagram

1. Go to your Audiences. (You can also create a Lookalike audience during ad creation in Ads Manager.)
2. Select the Create Audience dropdown and choose Lookalike Audience.
3. Choose your source. Value-based sources (like purchases) are recommended here because they’re considered higher value.
4. Choose the country/countries where you’d like to find a similar set of people.
5. Choose your desired audience size with the slide.

(The smaller the lookalike audience, the closer they’ll behave to the source audience. We recommend keeping this at 1%).

6. Select Create Audience.

You can use more than one Lookalike audience in your ad targeting, and create up to 500 audiences using the same source.

Here’s a Pro Tip for Deciding What Audience Source to Use:

When we’re running ads for clients, we prioritize building Lookalike audiences using:

• Custom Lists (email lists, CRM data)
• Website Activity (purchases, pages visited)
• Page/Account Engagements (as long as our client didn’t buy followers, which you should never do!)

We prioritize them in that order. So if we can’t get a custom list, we’ll use website activity.

And if we don’t have enough website activity (like when the pixel has just been installed), we’ll look for account engagements.

Now let’s move on to how you can figure out what ads to show.

Step 3: How to choose the right ad topic for your audience

The ad you decide to show will depend on:

• your goal,
• who will be most likely to follow your CTA (to reach your goal), and
• the best way to capture that audience’s attention.

Now your goal will lead you to the right audience if you understand your audiences and their needs. We like to answer a few questions:

1. What is my goal?
2. Who has completed my goal before (what audience)?
3. Why did they complete my goal before?
4. What situations have led them to this business?
5. What matters to them?
6. What product or service will solve their problem or meet their desires?

Each of these answers will guide you to the people who will respond.

And it will guide the messaging you should be using to connect with your audience.

You’ll formulate each of these answers into a few short sentences (for CTA’s) and a couple of paragraphs (for descriptions).

A/B test your versions of copy and your graphics (images and videos) so you can find the best combination for your audience.

Step 4: How much you’re going to spend

Instagram ads are pretty affordable. They hover between $0.70 to $2 per click on average.

According to Revealbot data, the average Instagram CPC in July 2021 in the United States was $1.28.

We recommend using The Advertising Calculator ROI by Hubspot which can help you figure out how much you need to spend.

This is also a good tool to use if you want to see what will happen if you improve one area (like conversion rates) or cost per click.

For most of our clients, we recommend a starting budget of at least $600 a month for their Instagram ad strategy…

…more if our client has a low-volume business (or an expensive product).

Step 5: Set up your ads & launch

It’s time to get these ads set up and launched.

Let us walk you through that process (if you’ve set up Facebook ads before, this will be familiar to you).

Watch the video at the top of this post to learn how to set up your ads in the Facebook Ads Manager.

Step 6: How to monitor your ads and evaluate the performance

When we run ads for clients, we like to launch an ad and let it run for two weeks (provided nothing wild has happened) before making any changes to it.

When you’re monitoring and evaluating your ads, there are a few things you should look out for.

1. Monitoring your ad:

• Monitor when your ad leaves the Learning Phase. Let it run for 2 weeks after that date.

• Watch Frequency (if it goes over 3 or 4, it’s time to increase the size of your audience, change targeting, and/or update creative).
• Watch Ad Relevance Diagnostics (Quality Ranking, Engagement Rate Ranking, Conversion Rate Ranking).

If any of them are below average, you need to make adjustments.

2. Evaluating your ad

• Look at all the same things you were monitoring while the ad was running
• You also want to check your CTR, CPC, the number of conversions (or leads, clicks, whatever your goal was), and ROI.
• You’ll look at all of these metrics in combination with each other to determine whether your ads performed well or not.
• If you’re happy with how many conversions or actions your ads got…

…your Relevance Metrics are average or above average, and your Frequency is below 4, you can run the ads again.

Try running an A/B test to introduce a different audience or test new ad creative.

Take Your Instagram Ad Strategy To The Next Level Today!

Now that you know how you can create an Instagram ad strategy, you are one step away to bring in more sales and conversions for your business.

Want faster results? Work with our Instagram advertising agency today!

Contact us to talk to one of our expert team members.

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