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Instagram Story Ads 101: Everything A Business Needs to Know

Image of a woman and a phone slotted into a tripod where she is videoing herself to use it as an Instagram Story ad

Instagram Story ads provide a fully immersive experience for viewers. The vertical format fills the screen and, unlike Facebook and Instagram feed ads, they look almost identical to organic Instagram Stories, with the exception of the Sponsored tag in the top corner. 

Brands with any number of followers can link out to their chosen page from a Story ad, directing Instagram users who are already caught in the “Story loop” to visit their site. Advertisers can also encourage users to reply to their Story ad, garnering engagement that can lead to long-term loyalty. For merchants that want to reach shoppers where they’re already hanging out and in a way that feels authentic and organic, Instagram Story ads are a great solution. 

In fact, 400 million people use Instagram Stories every day, and one-third of the most-viewed Stories are from brands and businesses. When one Story ends, another automatically starts, giving you airtime amongst Stories from friends, family, and other favored accounts. 

The benefits of Instagram Story ads include: 

  • Increased reach: target shoppers who can purchase directly through the app
  • Boosted engagement: one in five Stories gets a direct message from viewers
  • Ability to tap into new audiences: use Instagram’s targeting features to reach shoppers that aren’t already following you
  • Raised brand awareness: seamlessly show up in users’ Stories feeds with branded ads 

Shopify’s library of powerful features make it easy to monitor, track, and measure your Instagram Story ad campaigns from start to finish. 

How to create an Instagram Story ad

  • Navigate to your Ads Manager account. 
  • Click “Create New Ad.” 
  • Choose the objective of your campaign (e.g., click-throughs, engagement, lead generation, or downloads).
Image of selecting marketing objective in Instagram ads
  • Select your audience, your maximum budget, and how long you want the campaign to run for.

Image of selecting your budget, audience, and length of Instagram story ad

  • Choose the social media platform you want to share your ad on (Instagram) and the placements you want to use (Stories).
  • Upload your ad creative.

Image of Instagram ad control panel of finalizing ad campaign

When setting up your ads, make sure you sync your product catalog so you can link out to the right product pages quickly and easily. This gives viewers the chance to make a purchase without ever leaving the app. Here’s our guide on how to do that

The tech lowdown

The vertical nature of Story ads means it’s difficult to use your existing ad media from other channels. Instead, create visuals and media elements from scratch that match Instagram’s desired dimensions: 

  • 9.16 ratio 
  • .mp4 or .mov for videos
  • .jpg or .png for photos
  • 4 GB file size for videos
  • 30 MG file size for photos 
  • 15 second play time for videos 
  • 5 second default playtime for photos
  • 1080 pixels x 1920 pixels recommended resolution (minimum 600 pixels x 1067 pixels) 

Most of these are the same as regular Instagram feed ads, except for the dimensions, which are 1080 pixels x 1080 pixels for feed ads, and the play time, which can be up to 60 seconds for feed videos. 

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How much does it cost to run an Instagram Story ad campaign? 

It’s almost impossible to put a number on the cost of an Instagram Story ad campaign, simply because most research into the averages usually doesn’t specify the industry, the audience, and the goals of the campaign. 

This study reveals that Instagram feed ads are more cost effective than Facebook ads, with an average CPC of anywhere between $0.20 and $2, but that Instagram Story ads usually bring cheaper results than Instagram feed ads. 

The way you get charged for your Story ads depends on the billing option you choose when setting up your campaign. For most optimization goals, you’ll pay for impressions rather than clicks, where you’ll be charged on a cost per 1,000 impressions (CPM) basis. If you choose to pay per link click (or swipe up), you won’t be charged if nobody clicks your link. 

So, if we take this research at face value, you can expect to pay less than $2 per click on average. In fact, a different piece of research suggests that Story ads tend to cost between $0.70 and $1 per click, and another suggests CPC rates fall somewhere between $0.40 and $0.70, making them one of the cheapest social ad formats. 

How Instagram Story ad costs are calculated

Like most social channels, Instagram Story ads are bought through an auction bidding system where merchants are asked to establish their budget before the campaign kicks off. They are then asked to define their bid, which is the maximum amount they’re willing to pay for a user to complete an action (like visiting their site, watching a video, or downloading an ebook). 

In the auction, Instagram decides which ad will provide the most value to its users based on: 

  • The advertiser’s bid amount
  • The estimated action rates (i.e., how likely someone is to complete the action for which the ad is optimized)
  • Ad quality and relevance (i.e., how likely a user is to be interested in the ad)

There are several factors that will determine the cost of your Story campaigns, too. Things like your industry, the day of the week, and the time of year will have an impact on the average CPC. For example, merchants selling air-conditioning units will face more interest in the summer months and are likely to be up against more competition, which can drive up the CPC, while general campaign rates will increase overall during popular shopping holidays like BFCM. 

Top tips for Instagram Story ads 

1. Stay on brand 

When users are flipping through their Stories, you want your ad to stand out and be recognizable. Keep colors on brand so that your followers and potential customers are in no doubt about who the ad is from. 

Image of an Instagram story ad, by Aunt Bessies, as an example of staying on brand

Aunt Bessie’s incorporated branded videos into its Story ads campaign, which led to a 7.8 point lift in ad recall compared to competing ads. The campaign worked particularly well as an add-on for its TV ads, since viewers were already familiar with the company’s branding.

Ultimately, the idea was to create a series of videos that celebrated families coming together around a roast dinner, which was a hit during the Christmas season. Without sound, the ads still increased ad recall because of the strong colors and text associated with the Aunt Bessie’s brand. 

2. Maximize the 15-second play time

Instagram Stories are consumed faster than any other mobile format, which means you have a limited time to capture the attention of viewers. Keep your message short and to the point for best results, and use the first few frames to grab attention. Story ads can run for up to 15 seconds per frame, and people often watch story videos for the whole 15 seconds, compared to an average eight-second watch time for feed ads.

Image example of an Instagram story ad by Casper using a CTA in its frames

Casper uses its CTA in the first frame so shoppers who are eager to dive right in can do so straight away. 

3. Make use of Instagram Story features like stickers and polls 

Instagram’s suite of features and Story add-ons help create an immersive and engaging experience for viewers. Using elements like stickers, polls, and GIFs adds an authentic feel to your ads and encourage shoppers to engage with you. 

Image example of an Instagram story ad by Little Mistress using a question to encourage engagement

Little Mistress asked viewers engaging questions in its Black Friday Story ads, which generated a 24% lift in add-to-cart conversions and a 94% increase in BF sales compared to the previous year. 

4. Experiment with content types

According to research, ads that use motion perform better than static ads and help tell a story quicker. Try an Instagram Story video ad, GIF ad, or flicking through a series of photos in a carousel format to see which type of content resonates the most with your audience. 

Different types of content lend themselves to different ad formats too. For example, the below ad from LiLash shows a mini-tutorial, which is obviously better showcased in a video format.

Lilash uses a quick video to show its product in action before leading into the CTA screen. Videos can play for up to 15 seconds, and you can create them in Facebook’s Creative Hub, on Ads Manager, or design and edit your own. 

Single photos play for a default five seconds. Again, you can create these in FB Creative Hub or Ads Manager, or design your own. 

Image of an Instagram Story ad example from Waterdrop using a still image

Waterdrop uses static images to highlight the design of its bottles. Its goal here was to raise brand awareness with eye-catching image ads that have no distractions.

Finally, carousel ads can play up to three pieces of content (both videos and photos) within a single ad. 

This mixed media approach can help you show different perspectives of your product and merge a range of styles, from influencer content to product photos and tutorials, all in the same ad. For example, if the goal of your ad was to introduce viewers to your latest mascara line, you might include a quick video tutorial, a static photo of the packaging, and a boomerang of a top influencer using the mascara. 

Image of an Instagram Story ad example from Overstock using a carousel to showcase different products in stock

Overstock uses the carousel format to showcase different products from its line in eye-catching static shots. 

5. Create a clear CTA

Speaking of CTAs, it’s important that your Story ad CTAs tell viewers exactly what will happen when they click the link (or swipe up). Use action words like Shop Now, Download, or Visit the Site, and direct users toward the swipe feature. 

Image of an Instagram Story ad example from GAP using a clear instructions in its CTA to buy products

Gap directs viewers to the swipe up feature and tells them what they can expect when they click the link. 

6. Show products in action 

Instagram Story ads are the perfect place to showcase what your product can do and what viewers can expect if they buy it. 

Image of an Instagram Story ad example from Michael Kors and use cases for its smart watches features

Michael Kors shows the ways vieweres can use their watches, such as a night out with friends, and phoning a friend while out shopping. These ads resulted in a 20% higher return on ad spend and an eight-point lift in brand recall compared to other ads. 

7. Partner with creators and influencers

Instagram is the platform for influencers. In fact, 80% of consumers have bought something based on a recommendation from an influencer. You don’t have to throw your money at big celebrities to do it right though—micro-influencer marketing is on the rise, letting brands tap into the pre-established audiences of smaller, more niche accounts to reach their target audience. 

Image of an Instagram Story ad example from Ritzy using influencers in their story ads

Ritzy partnered with content creators and asked them to film 15-second Stories for their ad campaign. This resulted in a 51% higher return on ad spend and a 33% lower cost per action. 

8. Make ads especially for Stories

The recommended dimensions for Instagram Stories differ from other ad formats. Create images and video content especially for the platform to make the most of the full-screen format and the available space. 

Image of an Instagram Story ad example from Bolt Food and making excellent use of design space

Bolt Food uses both image and text to capitalize on the shape of an Instagram Story ad and the space available. 

9. Create custom audiences

Instagram’s powerful targeting capabilities make it easy to reach different segments of the platform’s audience. However, if you want to retarget existing customers or people who already know about your brand, create custom audiences. You can build out different lists based on: 

  • Email subscribers: customers on your email list (you need at least 100 subscribers to get started, but the more the merrier)
  • Website traffic: shoppers who have visited your website (you’ll need to install Facebook’s pixel to collect this information)
  • App installs and activity: people who have been active on your app (you need to add App Events to your app to track what people are doing within your app)
  • Offline activity: shoppers who have visited you in-store
  • Social media engagement: people who have engaged with your content on Facebook and Instagram 

Image of an Instagram Story ad audience targeting campaign

10. Add an incentive

It’s difficult to find someone who doesn’t enjoy a discount every now and then. Encourage viewers to click through or take action on your Instagram ads by offering an incentive. This could be a discount on their next order, a free product, or cheaper shipping when they spend over a certain amount. 

Image of an Instagram Story ad example from Batch Organics and incentivizing shoppers with a free gift on first orders

Batch Organics offers viewers money off their first box if they swipe up and make a purchase, leading to a 23% higher click-through rate

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Run Instagram Story ads that stand out

Instagram advertising presents an opportunity to share your products in a creative way. Engagement levels are particularly high on Story ads, and the additional CTA feature lets viewers swipe up and take action whenever they see your ad.

Make your ads stand out by creating visuals that are the right dimensions, considering the goals of your campaigns, and creating authentic, branded ads that are recognizable and generate results.