Marketing analytics & reporting

Monetization with Ads Manager Instagram

It's not a secret that brands and influencers are making money off of their Instagram accounts. Making an Instagram account the main stream of revenue is quite easy as Instagram provides promotional tools. These tools are managed by ads manager Instagram, where ad campaigns are developed, purchased, and managed. This blog will discuss the most profitable monetization processes, how brands can leverage their fan following, and ways to analyze ad campaigns' success.

Whatagraph marketing reporting tool
Dominyka Vaičiūnaitė

Nov 22 2021 7 min read

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Table of Contents

  • Instagram's rapid growth
  • Instagram affiliate links
  • Reels ads
  • Stories monetization
  • Google & Instagram's collab?
  • Measure ad success

Instagram's rapid growth

Instagram app can't go a week without introducing or testing new features. Advertisers and influencers are being thrown new ways to display their ads and include their eCommerce with retail ads (will talk about it below).

Because of these factors, Instagram's US ad revenues are growing faster than the biggest social media platform Facebook's. As of 2021, for the first time, Instagram is contributing over half of Facebook's US ad revenues.

Instagram and Facebook ad revenues and growth in US

Why exactly do advertisers and influencers rely on Instagram? What are the methods by which they can profit from Instagram? Continue reading ↓

Instagram affiliate links

Instagram has already begun testing affiliate marketing tests. To support these tests, they added another feature-affiliate links. It will give influencers a chance to provide a shoppable landing page where they could direct their Instagram users. Creators could use either their own or their affiliate partners' links.

The Instagram app will now include a 'partnerships' inbox. This will allow creators to prioritize placements without having to go to the 'requests' section, where incoming messages get mixed in with other business-unrelated messages.

Making profit: Creators can get money simply by displaying affiliate partners' links and earning commission fees on agreed terms. This is where they would earn commissions fees and become a revenue driver.

Advice for long-term partnerships: Run Instagram ads to gain brand awareness. Build rapport and loyalty around it. According to Salesforce research, CRM software can increase sales by up to 29%. More so, to make the most of your affiliate partnerships and earn the most money, learn about the current 'health' of your Instagram ads. Here is a free Instagram dashboard template just for you!

Instagram dashboard to analyse key performance metrics

Reels ads

A single Instagram ad campaign can have a variety of different ad formats. One of those formats is Reels. Now, it’s still not clear how popular Reels Ads are. There are no stats released.

Instagram does not disclose how many of its users use Reels, but comments from Instagram's CEO, Adam Mosseri, in January 2021 indicate that whatever the number is, it is insufficient. "I'm not yet satisfied," he admitted in an episode of The Verge's "Decoder" podcast. "We're growing in terms of both how much people share and how much they consume, but we still have a long way to go. And, to be honest, TikTok is ahead".

And still, you should consider running an Instagram advertising campaign where the main ad creative is Reels. 4 reasons why:

  • Reels can help with discovery and purchasing. Many brands are already using Reels to promote their products and services. They are not only promoting, but they are also relevant, and early adopters can benefit from favorable exposure. Furthermore, with the introduction of the 'View Products' button on Instagram, it has become even easier for users to become consumers, as they can now buy, save, or learn more without leaving their Instagram account;
  • AR is gaining popularity among marketers and social media users. Not only that but massive investments are being made in its future. Brands can create branded AR filters on Instagram that can be used on Reels. Not only are they enjoyable for users, but they also increase brand awareness and exposure;
  • In 2020, 96% of consumers increased their online video consumption. It's only a matter of time before Instagram video ads achieve the same results;
  • You can also share Reels on your Facebook page. And, as Facebook has almost 3 billion users, you'd be getting extra exposure.

Stories monetization

Ads manager can help you create successful Instagram ads. One of the ways to do it is to release different ad formats. With Reels ads, create Instagram Stories ads.

Instagram Stories are used by 500 million people and watched by 70% of all users. When it comes to businesses, only 36% promote their products on stories. This means that if you create Stories ads to display your services, you won't face much competition.

Instagram stories ads are simple to use, as there have been several new monetization updates to Instagram’s Stories products that are now quite significant:

  • Marketers can create and schedule Stories within the Business Suite;
  • In Instagram Stories, link stickers have similar functionality as swipe-up. This means sticker ads allow creators to incorporate an ad that looks like a sticker on their story and receive a cut of the revenue generated. Marketers will be able to create and schedule Stories within the Business Suite.

Google & Instagram's collab?

Google is negotiating deals with Instagram for a search engine to access the platforms’ rank and indexing data. This basically means that Instagram videos, such as Reels or IGTV, may appear in Google search results.

At the moment, Instagram Ads cannot be displayed on Google. However, as part of this agreement, Instagram will be directly linked with Google. That is, there is a good chance you will be able to do it eventually.

Advice: Begin improving your video ads now, and you'll be ready to provide high-quality content for Google to display when the time comes. This deal will allow marketers to save time by not having to create extra content while also allowing them to showcase their products on the world's largest search engine.

Measure ad success

Instagram Ads Manager, like Facebook Ads Manager, allows you to manage and track the results of your Instagram Ads campaign. After you create ads, build reports of their performance and learn about the Instagram users' behavior.Instagram business report with key performance metrics

To measure your Instagram ad success, track 3 metrics, that best identify the effectiveness of your campaign:

Click-through-rate. The average CTR for a search ad across all industries is 1.91%, and 0.35 percent for a display ad. CTR tracking will show you how many people clicked on your ad in comparison to other ads that were released. CTR is typically calculated as follows: clicks ÷ impressions = CTR. Essentially, the click rate indicates how successfully you created your ad so that a person feels FOMO if they do not click it.

Average conversion rate. This metric will display the number of conversions per ad interaction. The average conversion rate for landing pages is around 2.35%. Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period.

Post engagement rate. The average and considered good engagement metrics range from 1% to 5%. Engagement rate will tell you how many and how much people are engaging with your ad. If your rate is low, experiment with different kinds of ads: video; carousel, IGTV or shopping ads. When it comes to ad engagement, keep in mind that it is usually lower than the engagement received on organic posts. Nearly 3 out of every 4 users (74%) think there are too many ads while 90% of users find mobile marketing annoying.

You can also benefit from Instagram's dashboard. Before you create Instagram ads, learn about your page's performance. Take a look at your Instagram account and its trends. Identify, which posts and videos get the most impressions, likes, and comments.

Published on Nov 22 2021

Whatagraph marketing reporting tool


Dominyka Vaičiūnaitė

Dominyka is a copywriter at Whatagraph with a background in product marketing and customer success. Her degree in Mass Communications/Media Studies helps her to use simple words to explain complex ideas. In addition to adding value to our landing pages, you can find her name behind numerous product releases, in-app notifications, and guides in our help center.