8 Ways to Improve Instagram Ads Performance

Are your Instagram ads not performing as well as you’d like?

Don’t worry. You’re not alone.

The average Instagram ad click-through rate is just 0.22%. That means, that for every 1,000 people who see your ad, only two will actually click on it.

Of course, you’re not looking for average results. You want your Instagram ads to perform better than that.

8 Ways to Improve Instagram Ads Performance

8 Ways to Improve Instagram Ads Performance

Thankfully, there are some things you can do to improve your Instagram ad performance.

Here are 8 tips to try:

#1. Create an Instagram Funnel

With Instagram ads, the ultimate marketing objective isn’t to get someone to click on your ad or engage with your profile or ad. It’s to generate leads, sales, or any other revenue-related conversion.

However, to get people to take those high-value actions, you need first to get them interested in your product or service. And the best way to do that is by creating an Instagram funnel.

An Instagram funnel is a series of Instagram posts and Stories that leads users from becoming aware of your brand to taking action, such as signing up for your email list or purchasing your product or services. 

The key to creating an effective Instagram funnel is to start with a broad message that resonates with your target audience and then narrow it down as you go.

For example, if you’re selling health supplements, you might start with a post about the benefits of taking health supplements. Then, you could follow up with a post about the specific benefits of your products. 

Finally, you could share some testimonials or stories about how your products or services have benefited others.

While the ad campaign happens in Facebook Ads Manager, you’ll be building your funnel in the Instagram app itself.

Has one of your organic posts been generating a lot of engagement? Save it as an Instagram Story and repurpose it for a paid ad.

The idea is that high-performing organic posts make the perfect candidate for successful paid ads.

How to Design the Perfect Instagram Ad Funnel

Critical factors to your Instagram funnel success are:

  • Choosing the right campaign objective
  • Using the right targeting
  • Selecting an optimal ad type
  • Offering a promotion that resonates with your target audience at each funnel stage
  • Targeting the right audience

All these factors contribute to how effective your Instagram funnel will be in achieving your desired outcome.

Stage 1: TOFU — Find and Attract Prospects 

The first stage of the funnel is TOFU or Top of Funnel. The objective here is to find and attract new, cold audiences and get them to notice and interact with your brand somehow.

It’s the introduction stage of your funnel, so you’ll want to use broad and engaging content. 

Some good examples of TOFU content include:

  • Motivational quotes or images. 
  • Quizzes or polls. 
  • Highlight reels of your products in use. 
  • How-to posts or videos. 
  • User-generated content.

Your TOFU content must be able to stop users from scrolling through their newsfeeds and get them to take notice of your brand. 

Best Instagram Ad Campaign Objectives for TOFU

Your Instagram ads campaign objective determines what action you want people to take after seeing your ad. 

That’s the result that Instagram will try to optimise your campaign for. 

That said, here are some of the best objectives for creating a TOFU campaign:

  • Brand Awareness
  • Engagement
  • Reach
  • Traffic
  • Video views

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In layman’s language, choosing a campaign objective is akin to telling Instagram, “Find me users who will perform this action.”

Instagram Audience Targeting for the Awareness Stage

One of the most important things to get right in the TOFU stage is targeting.

You have a vast amount of audience data on Instagram, including age and gender demographics, interests, location, etc. You can also target people who’ve interacted with your other content, such as users who follow you or people who’ve visited your website.

When setting up your audience targeting, you have to think about your ideal customer and what they might be interested in. Try to be as specific as possible to attract the right people to your brand.

You can use the following two audience types:

  • Lookalike audience: A lookalike audience is a group of people who share similar characteristics to your current customers. 
  • Custom audiences: A core audience is a group of people who’ve interacted with you before on Instagram.

Creating your first lookalike audience is easy: all you need to do is, pick an existing customer list and select the “Create Audience” option in Ads Manager, followed by “Lookalike Audience.” You can then choose how large or small you want the audience to be and how similar they need to be.

Once you’ve created your lookalike audience (and it’s automatically saved for later use), you can add it as a targeting option in your ad campaign settings.

Custom audience allows users based on demographics, behaviour, interests, and life events.

For example, if you’re selling baby gear, you can target new parents and expectant mothers.

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Optimal Instagram Ad Type and Placement for TOFU

Since this stage aims to get users to interact with your brand, you’ll want to use ad types that allow them to do that. 

Some good examples include:

  • Video ads
  • Carousel ads (which allow users to swipe through different images or videos)
  • Stories ads
  • Collection ads
  • Image ads
  • Explore ads

TOFU ad placements should be focused on getting users to take notice of your brand, so you’ll want to use placements that are high up in the feed. 

Some good examples include:

  • Stories. 
  • Explore page. 
  • In-feed (both standard and carousel).

Perfects Instagram Ad Messaging and Offer for Cold Audiences 

Cold audiences are people who’ve never interacted with your brand before.  

Your ads must stand out, inspire, and spark curiosity. 

Your ad copy must introduce your unique selling proposition in a fun and interesting way without bombarding users with too much information. 

Your headline should be clear and to the point, while your description should elaborate on what you’re offering and why users should care. 

Some good examples of offers for cold audiences include: 

  • View Instagram profile
  • Watch a video
  • Take a quiz
  • Giveaways
  • Read a guide or blog post
  • ad engagement
  • Ecommerce visits

In other words, the action required shouldn’t take too much effort or time from the user. 

Video views, website visits, and story polls engagement are great options for cold audiences. 

It should be easy to understand, and there should be a clear benefit to taking that action.

The idea is to give users a reason to care about your products and ads by highlighting the key benefits and what makes them unique. 

8 Ways to Improve Instagram Ads Performance 3

Fresh Cove does a commendable job of this in their Instagram ads, using clever messaging and clear illustrations to get users interested in their product. 

Giveaways and contests are also a great way to attract cold audiences, as they provide an incentive for users to take notice of your brand. 

Stage 2: MOFU — Consideration

At this stage, users are now more familiar with your brand and are considering making a purchase. 

The problem is that they’re still not sure if they should buy from you or someone else.

Your job is to convince them that you’re the right choice by providing more information about your products or services. 

You can do this by using ad types and messaging that focus on the features and benefits of your products and, most importantly, how they compare to your competitors. 

Some good examples of ad types and messaging for this stage include: 

  • Product demonstration videos 
  • Customer testimonials or reviews 
  • Comparison ads 
  • Free shipping or discounts 
  • “How it works” videos  

The key is to provide enough information so the user can make an informed decision.

Best Instagram Ads Campaign Objectives for MOFU

The best Instagram ads campaign objectives for MOFU are: 

  • Traffic 
  • Lead generation
  • Messages
  • Conversions

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The goal isn’t to get your brand noticed, as that’s already been done at the TOFU stage. 

Instead, you want to focus on getting users to take the next step in their buyer’s journey by visiting your website or a dedicated landing page, where you can collect their contact details and other information. 

Lead generation objective is designed for just that. They allow users to submit their contact details without leaving the Instagram app. 

The form comes prepopulated with the user’s information to reduce friction.

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It makes filling out the forms easier for users and allows you to capture more leads. 

Instagram Audience Targeting for the Consideration Stage

You want to target users already familiar with your brand. 

The best Instagram ads audiences for the consideration stage:

  • Retargeting based on ad engagement
  • Retargeting based on video watch time
  • Retargeting based on the website visit
  • Retargeting based on Instagram profile engagement
  • Lookalike audience

Since these audiences have already been exposed to your brand, they’re more likely to be interested in what you have to offer and are further down the funnel. 

Optimal Instagram Ad Type and Placement for MOFU

Best Instagram ad type for MOFU: 

  • Shopping post ads
  • Carousel ads
  • Image ads
  • Collection ads
  • Story ads

Follow up with your best-performing ads and use retargeting to serve your most relevant ads. 

Best Instagram ad Messaging for MOFU

Your MOFU messaging should be focused on convincing users that you’re the right choice and that they should buy from you. 

Some examples of effective messaging for this stage include:

  • Discounts or free offers 
  • Free shipping 
  • Gifts with purchase 
  • Product demos
  • Contests
  • Downloadable content
  • Free online assessments
  • Other types of freebies and giveaways 

You want to be clear about what you’re offering while also emphasizing the benefits.

Don’t forget to include a call-to-action (CTA) so users know what you want them to do. 

And, as always, make sure your ad copy is error-free and easy to understand.

Stage 3: BOFU — Customer Acquisition and Retention

The final stage of the buyer’s journey is BOFU, when you’ve already convinced a user to buy from you, and now you’re working on getting them to come back for more.

At the BOFU stage, your goal is to acquire new customers and retain existing ones by engaging with them in meaningful ways, such as offering exclusive content or products, sending special offers and discounts, or running contests and promotions.

Best Instagram Ads Campaign Objective for BOFU

The best Instagram ads campaign objectives for BOFU are: 

  • Catalogue sales
  • Conversion
  • Traffic

If you sell various products and services, then catalogue sales are the best option as it allows you to showcase all your offerings in one place. 

It can pull data from your product catalogues and use it in your Instagram ads, making it easy to showcase your products and drive sales. 

To set up a catalogue sales campaign, you’ll need to head over to the Ads Manager and integrate a product catalogue.

8 Ways to Improve Instagram Ads Performance 6

You can begin by creating a business manager account that you’ll be using to assign your catalogue to your business. 

Only an admin can proceed with the rest of the steps. 

Creating a Catalogue

Go to Commerce Manager and start creating the catalogue.

If this is the first catalogue, click on “Get Started” before selecting “Create a Catalogue.”

The idea is to target users who visited your online store in the earlier stages but didn’t make a purchase. 

You also want to target users who visited a specific page on your website, such as your product page, lead magnet, or thank you page.

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If you’re running a lead generation ad, then be sure to look for lead form in the custom audience creation tool.

This audience type allows you to target users who previously completed a form on your Instagram Lead Gen Ads. 

If you chose Catalogue sales as your objective, the audience targeting would look different. It will be completely product-centric, as your goal is to target users who have viewed your product or added it to the cart but haven’t made a purchase.

You can also cross-sell and upsell products or create a custom combination of audiences based on how people have interacted with your product in the past.

Upsell is a form of retargeting as it allows users to view products from a different set of products from what they’re viewing. 

For example, if someone bought a shirt from your store, you can target them with ads for pants that go well with the shirt.

Cross-selling is also a form of retargeting where you show complementary products to what the user has already purchased. 

8 Ways to Improve Instagram Ads Performance 8

8 Ways to Improve Instagram Ads Performance 9

For example, if someone buys a book from your store, you can display a list of books that go well with the book they purchased.

Optimal Instagram Ad Type and Placement for BOFU

At the BOFU stage, you’ll want to focus on ad types that allow you to showcase your products.

Here are the best ad types and placements for BOFU: 

  • DPA ads
  • Image ads
  • Carousel ads
  • Story ads

If your checkout process isn’t streamlined enough for shoppers to complete the purchase process, you can use Instagram retargeting to recover abandoned carts.

Dynamic Product Ads (DPA) allow you to retarget users who viewed your product but didn’t add it to the cart.

Perfect Instagram Ad Messaging for the Purchase Stage

Offers and messaging that work best at the purchase stage are: 

  • Urgency messaging such as “limited time only.”
  • Free shipping
  • Discounts and coupons
  • FOMO triggers
  • Risk-free purchase
  • Social proof
  • Price drops
  • Discounts
  • Gifts

#2. Retarget High-value Audiences on Instagram

After setting up your Instagram funnel and creating ads for each stage, you need to make sure you’re remarketing to your most valuable audiences. 

So, why should you bother with Instagram remarketing? 

The answer is simple: they’re more likely to convert than new users.

In fact, according to Invespcro, “the likelihood of selling to a new prospect is 5-20%. The likelihood of selling to an existing customer is 60-70%.” 

That’s a big difference! 

And it’s not just because they already know, like, and trust you. 

It’s also because they’ve already shown an interest in what you have to offer by taking a specific action, such as subscribing to your email list or visiting your website.

Some examples of high-value audiences you might want to retarget on Instagram are: 

  • Email subscribers
  • Website visitors
  • Product page visitors
  • Readers of your lead magnet 

To build a remarketing target audience, head over to Ad Manager and click on “Create Audience” ~> “Custom Audience.” 

You can create a custom audience from your website traffic or upload a list of subscribers. 

You can make your audience broader by targeting everyone who’s ever engaged with your account or narrower by targeting those who messaged your Instagram account.

8 Ways to Improve Instagram Ads Performance 10

If you want to be more specific and engage people who are further down your sales funnel, you can use other in-app tools such as Lead forms or external tools like app and website activity as your data source.

Options abound. So don’t be afraid to try different approaches to find what works best for you. 

For instance, you could set up a Catalogue in Commerce Manager and use it to retarget users who’ve interacted with your products before. 

Choose whether you want to target people who visited a particular page, completed their purchases (reach the “thank you” page), upsell to warm leads, or cross-sell to visitors who bought a complementary product. 

Once you’ve selected your target audience, set up the campaign and run it for at least one week to gather optimization data.

8 Ways to Improve Instagram Ads Performance 11

Then, go back in and tweak each layer of your Instagram funnel until you have optimized everything, including changing copy or images or ad placements.

As you do this, your Instagram ads will get better and better at converting leads into customers.

#3. Adopt Native Lead Generation Forms

Instagram’s new lead generation forms are a powerful way to turn your followers into leads without ever having to leave the app. 

The great thing about these forms is that they’re native to Instagram, which blends in seamlessly with the rest of your content. Plus, they’re easy to set up and use.

8 Ways to Improve Instagram Ads Performance 12

Native lead generation forms are great for capturing new leads and moving them down your sales funnel. 

With this campaign objective, you can identify warm leads and determine whether or not they’re a good fit for your business. 

Better, these ads use native lead generation forms that autofill with the user’s information and makes the conversion process as seamless as possible.

To set up a native lead generation form campaign, head to your Ad Manager and select “Create Campaign.” Choose the Instagram account you want to target and select “Lead Generation” as your campaign objective. 

People who fill out these forms tend to be closer to making a purchase decision. You can also convert them using organic methods like email marketing or retargeting them with ads on other platforms. 

Not only that: you also want to work on a lead magnet that entices your target audience to want to give you their contact information.

Native lead generation forms are great, but they aren’t your only options. You can still direct users to your website or landing page, where they’ll download a lead magnet, browse your eCommerce catalogue, and subscribe to your email list. 

Whichever route you choose, remember to keep tabs on the performance and optimize your strategy accordingly.

But why drive users to an external conversion instead of keeping them within the Instagram app? 

There are a few reasons you may want to send users to your website or landing page. First, cross-platform tracking is more difficult with in-app conversion methods.

It allows you to gather remarketing data and retarget prospective customers on other channels such as Facebook and Google Display Network. 

Second, it gives you more flexibility in terms of creative assets. 

While images can be optimized for Instagram, they may not work well with some ad formats. 

With lead generation forms (and other conversion-based ads) on your website or landing page, you have many more options – from video to display ads. 

Finally, website or landing page conversions allow you to add conversion tracking pixels to measure your efforts and optimize them for better results.

#4. Prioritize Conversion Events

There are several different conversion events that you can track with your Instagram ads. 

To start, you want to prioritize the most important conversion events for your business — email signups, purchases, or something else entirely.

Then, you can use these events to inform your ad strategy and create more targeted campaigns focusing on these specific actions. 

Most conversions will probably occur on your website, landing page, or in-app.  

You can track these events using Facebook Pixel or Google Analytics and then use that data to create more effective ads. 

For example, if you’re selling products on your website, you’ll want to track the “Add to Cart” event. 

That will allow you to see how many people are adding items to their carts, which you can then use to create more targeted ads based on specific product categories. 

Once you have a list of conversion events for your business, it’s time to track them. There are a few ways that you can do this:

  • Use tracking pixels for Facebook and Google Ads if you are selling products on your website
  • Use Google Analytics to track conversion events that take place on your website or landing page 
  • Use in-app tracking if you’re driving conversions within the Instagram app 
  • Use software like Heap Analytics to track conversions across all platforms

Here’s what you should do:

You can begin by installing Facebook Pixel on your website or setting the Facebook SDK for your app.

Next, open Event Manager and Click on “Aggravated Event Measurement. This allows you to track up to eight conversion events per website/domain. So, choose wisely.

You also want to use the Instagram funnel to map out prioritized events, but reverse. For example, suppose your highest priority event is a goal such as a purchase. In that case, you want to begin by tracking lower funnel events such as initiated checkout, subscription, content views, and add to cart. 

That lets you see which ads drive the most conversions so you can optimize your campaigns accordingly. 

For maximum Return on Ad Spend (ROAS), you can switch on the value Optimization toggle for purchase events. That allows you to automatically use Facebook’s machine learning to optimize your ads for better conversions. 

After configuring a value-optimized event, you can use the conversion objective to optimize it while setting up the campaign. For example, if you’re running a campaign to drive purchases of your products, simply choose “Purchase” as the objective. 

Finally, track your results using conversion tracking and optimization tools like Google Analytics and Facebook Ads Manager. It’s the only way to find out which ads perform the best, so you optimize your ad strategy to generate an even better ROAS.

#5. Test a New Campaign Bid Strategy

When setting up a conversion-based bid strategy, it’s natural to gravitate towards a bid strategy like the lowest cost or cost cap. These bid strategies are designed to deliver the maximum results at the lowest possible cost.

IF ROAS is your biggest concern, you might want to consider the minimum ROAS bid strategy. With the strategy, you’ll gain more control over your ROAS while retaining the highest possible purchase value.

So, how do you use this strategy?

You can begin by choosing a conversion-based campaign objective, such as catalogue sales.

Select ‘Minimum ROAS’ and ‘Minimum ROAS Control’ at the campaign and ad set levels, respectively. 

And how do you choose the number to use for your minimum ROAS control? 

Simple, look at the results from your past campaigns. Go to your Facebook Ads Manager report, and go through the website’s purchase ROAS column to see what your campaign has achieved in the past.

From there, you can use the average ROAS as your control number. 

If you want to be more conservative, you can set your minimum ROAS slightly below your average ROAS from the past. For example, if your campaign’s average ROAS is 3, you might want to set your minimum ROAS at 2.8. 

This will help ensure your ad spend is used efficiently and that it drives the highest possible ROAS for your business.

#6. Stop Targeting Generic Interests

When you’re just getting started with Instagram advertising, it’s easy to fall into the trap of targeting generic interests. After all, these interests are broad enough that they’re likely to reach a large portion of your target audience.

However, if you’re serious about driving ROAS, you need to be more specific with your targeting. 

Instead of targeting interests like “online shopping,” “outdoor gear,” or “sporting goods,” you want to target interests that are more closely related to your products or services. 

For example, if you’re selling outdoor gear, you might want to target interests like “hiking,” “camping,” or “outdoor cooking.” 

By targeting these more specific interests, you’ll be able to reach a narrower, more relevant audience that’s more likely to convert.

In addition to targeting more specific interests, you may also want to consider excluding interests that are less relevant or unlikely to convert. 

Head over to your Facebook Ads Manager Campaigns report and go through the website’s conversion column. Then, remove any interests that aren’t associated with conversions and don’t show up in the Conversion Rate column.

#7. Start Experimenting with Newer Ad Placements

Most businesses stick to the tried-and-true ad placements, such as the news feed and Stories. While these placements are effective, they’re not the only placements you should be using. 

If you want to drive better ROAS, you need to experiment with newer ad placements, such as Reels, the Explore feed, and IGTV. 

These newer ad placements will help you reach a wider audience, allowing you to stand out from the competition.

Advertising with Reels, for example, gives your ads a more organic feel, making them look a lot less like traditional ads. And by advertising on the Explore feed or IGTV, you can reach highly engaged audiences, which you couldn’t have otherwise achieved with other placements. 

You could also run the ads in Instagram stories. The benefit of advertising on Instagram Stories is that it allows you to take advantage of interactive and creative features, such as polls, quizzes, and Countdown Stickers. 

These features will help make your ads more engaging, thus increasing the likelihood of a conversion.

#8. Promote User-generated Content

User-generated content, or UGC, is any content your users create. It includes photos, videos, blog posts, and reviews. 

One of the best ways to drive ROAS is to promote UGC on your Instagram ads.

So, how can you find UGC to use in your ads? 

Instagram now makes it easy to find UGC and even get permission to use it in your ads. All you have to do is enable branded content right from the Instagram app.  

Go to your business account and click on “Setting.” Next select “Business” and tap on “Branded Content.” 

Select “Set Up Branded Content” and tap on the “Enable” button, and ta-da! 

You can use UGC in your Instagram ads and brand them with the appropriate credit.

About the Author

Tom Koh

Tom is the CEO and Principal Consultant of MediaOne, a leading digital marketing agency. He has consulted for MNCs like Canon, Maybank, Capitaland, SingTel, ST Engineering, WWF, Cambridge University, as well as Government organisations like Enterprise Singapore, Ministry of Law, National Galleries, NTUC, e2i, SingHealth. His articles are published and referenced in CNA, Straits Times, MoneyFM, Financial Times, Yahoo! Finance, Hubspot, Zendesk, CIO Advisor.


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