Disclaimer: This article has been updated in May 2023

Instagram launched Reels – its own version of TikTok in 2020.

It was the company’s effort to find ways for people to discover inspiring new content & help brands increase their reach.

This opened the door to a new promotional format – Instagram Reels ads.

Since July 2021, Reels ads have become available to all brands and creators.

If you’re wondering whether you should use the new advertising format – the answer’s yes!

But also beware. Before you start splashing the cash, make sure you study Reels from top to bottom so you achieve the best results.

Let’s get you started.

What are Instagram Reels?

You didn’t really think that Instagram would stand and watch TikTok win the platform popularity contest?

Nope.

Instead, they did what any other smart business does when they think they’re trailing.

Yep, they’ve included that same media format into their own popular platform.

Reels initially started out as 15-second short videos a bit different than your regular Instagram stories. Then it became a 30-second video format, which was further doubled, and expanded ever since.

Today, maximum length of Instagram Reel is up to 15 minutes.

While the format stayed similar to Stories (full screen and vertical), everything else was different.

For example, Reels won’t disappear 24 hours after you post them (unlike stories).

They are also easier to get in front of a wider audience using hashtags, shares, and other engagements that work wonders for TikTok’s virality.

If you have a public profile, anyone can view, save, and share your Reels. They can also leave comments just like on your regular Instagram posts.

It’s no wonder the new format took both brands and creators by storm. For instance, NBA teams started using them right away and immediately increased engagements by 22%!

They are also the most popular and engaging format – earning nearly 40% more engagement than regular posts. Combined with an accurate feed algorithm that suggests its to the most likely audience – it’s a recipe for success.

Given the format’s popularity and highly engaging content, it is only natural for businesses such as yours to start promoting their work on the platform.

What Are Instagram Reels Ads

Reels ads are ad placement in Instagram that appears in-between your regular Reels.

Meaning there are a few ways users can actually “discover” your ad – in the Reels tab, but also both in their private feed and explore feed.

Since summer 2021, Reels ads have launched worldwide after a successful trial in a few hand-picked countries.

“These ads will help businesses reach greater audiences, allowing people to discover inspiring new content from brands and creators.”, Instagram announced.

Reels ads format is full-screen, vertical much like Stories ads or TikTok.

However, note that (unlike Stories), Reels ads will loop between organic videos. The only difference between the two is the “sponsored” tag below the heading.

Also, users can comment, like, view, save and share reels ads just as they would do with organic content.

Are Reels Ads Effective?

Yes, they are extremely effective. And here’s why you should use them:

Creating a Reels ad will make it visible on more than just your regular Instagram feed. Instead, you’ll be able to position it various placements including Explore feed and Reels feed.

Given how popular the format is – you’ll definitely see an uptick in brand exposure just by promoting it via Reels ads.

But we’ll cover all the upsides later in the article…

How Much do Reels Ads Cost?

Tought call. On average, Instagram Reels ads cost-per-click is about $0.4-$1, according to the likes of WordStream and our agency experience.

However, the real cost will depend on:

• How well you target your audience
• How well you optimize your ads
• How competitive is the industry you’re targeting
• How competitive is the overall advertising landscape (may vary, e.g. during economic downturns)

The machine learning alogrithm will always look to find the best bang for your buck, so make sure you feed it with accurate data – The better your ads, the less your pay.

How to Create Instagram Reels Ads

After you’ve created your Reels creative you just have to turn it into an ad in the Reels feed.

If you’ve ever set up your ads via Facebook Ads Manager, creating Reels Ads will be a walk in the park.

1. Go to the Ads Manager. (Make sure you’ve set up your business account first).

2. Click Create.

3. Select your campaign objective (Note: Reels ads are compatible with conversion, reach, traffic, video views, brand awareness, and app install objectives)

4. Fill out campaign details (name, budget, etc).

5. Click “Next.”

6. Fill out ad set details (audience, targeting, schedule).

7. Navigate to Placements and choose Manual Placements.

8. Choose Reels under the Stories and Reels dropdown menu.

9. Optimize your ad (choose creative and call to action).

And voila! There you have it – your first very own Instagram Reels ad!

You just have to wait for it to get approved and it will appear in front of your target audience (and hopefully convert them!).

Why Use Instagram Reels Ads

Given its recency, it’s understandable that most users are skeptical about diving into Reels ads. You’re risking losing money, after all.

But below are the reasons you should think twice before deciding to go against the new format.

They are the Most Popular Instagram Format

Instagram Reels are all the rage.

Countries like India that tested the feature first have seen over 11% increased app downloads. Brazil has also seen an atypical increase in Instagram users since they’ve launched Reels – from 1% to 4% per month. (source: Influencer Marketing Hub)

The feature is extremely exciting.

On top of that, the competition is less saturated as most brands are yet to try out the new placement.

Yet still, the entire Instagram audience is there for you to target.

All this provides a unique platform for experimenting and possible huge wins with a low initial investment.

They Drive Engagement

Instagram Reels ads are quick to grab attention and encourage engagement.

People can comment, like, or share reels ads and further increase their reach and boost their social validation.

Sports teams have already seen a massive increase in engagement since they’ve started using Reels.

NFL teams have recorded a whopping 67% increase, while NHL has seen it increase by 57%. (source: Conviva)

Regular users also seem to benefit from Reels ads.

One TikTok user supposedly posted a Reel each day for a month and gained stunning 2.8k followers!

The initial results are telling so you better start capitalizing on this.

Reels Have Amazing Reach

Did you know that there are four different ways for the audience to discover your Reel?

• The Explore tab
• The Reels feed
• Hashtag search
• Audio search

This reach allows users to easily look for content that’s shared on the global stage.

What’s in it for you?

This intuitive search propels users to be on the lookout for new exciting Reels.

While they browse through videos with their favorite songs or new hashtag trends, your Reels ads will appear between regular Reels.

Optimize your targeting well and you’ll be able to deliver your ads to an insanely high number of potential customers.

Instagram Reels Ads Look Almost Native

Instagram Reels blend seamlessly into the Reels feed.

If you have a good creative team, you can make ads that won’t look out of place sandwiched between regular Reels.

Nowadays, shoppers are more inclined to engage with non-intrusive ads.

It’s also important to note that Reels provide a lot of ad real estate. It covers the entire screen space, giving you plenty of wiggle room for your video creative.

It also keeps the user fully focused on your ad without unnecessary distractions.

They Are the Most Popular Instagram Format

Reels ads pop up between regular Reels. As mentioned already, Reels are Instagram’s most popular format – meaning more reach, exposure, and engagement with Reels ads as well.

With projections saying Instagram will have over 2.5B active users in 2023, it’s natural that a third of the entire world will also interact with Reels.

With younger generations more attracted to shorter videos, you’ll find much more success if you learn to master Reels ads.

Instagram Reels Ads Rely On a Powerful Algorithm

Ever since the Apple ATT privacy update, Meta has been working to find new ways to pinpoint its audience and help advertisers.

The new, sophisticated machine-learning algorithm seems to have recovered the ad performance, with Reels ads riding the highest wave.

If you want to advertise profitably, Reels ads may have the best first-party data to target the audience that is likely to engage and convert.

Instagram Reels Ads Best Practices

Here are some of the Instagram Reels ads best practices:

1. Make your Reel ad blend with ogranic reels posts.
2. Always keep up to date with the Reels feed so you understand new trends
3. Use text and audio
4. Utilize the Reels ads format (Reels ads size is a full-screen vertical video with 500×888 pixels)
5. Think about timing (short videos perform better, despite Reels increasing their maximum length to 15 minutes)
6. Track data on your Reels ads (likes, comments, shares)
7. Test different video creatives
8. Partner with influencers to better market your brand
9. Stay up to date with new Reels ads updates. New length, new campaign goals, new features are always coming up.

Missing out on any of the above can give your competitors the edge.

What You Should Avoid When Creating Reels Ads?

Try to avoid these mistakes when making Instagram Reels Ads:

1. Don’t promote Reels published before October 2021. Create new instead.
2. Use either original audio or licensed music. There’s royalty-free music available in Meta’s Sound Collection as well.
3. Don’t use any media with face or camera effects, gifs, product tags, edits, special boxes, or file containers. It will all be flagged.
4. Don’t cover the entire Reel with content. Leave around 14% at the top, 20% on the bottom, and 6% on each side asset-free. It may get covered by the profile icon or your desired CTA.

Not much, but avoiding this could help you avoid getting your Reels ad unnecessarily removed or deemed low quality.

Reel It Up

TikTok’s success is proving that short-form videos are killing it in the advertising space.

Instagram Reels are expected to follow along.

Strike the iron while it’s hot! Now’s the best time to roll up your sleeves and create some appealing Instagram Reels ads.

If you’re unsure where to start, don’t panic – we can help! Schedule a call and we can help you create your first ad. Get in touch.

Also, let us know if you already started advertising your Reels. How does it work for you so far? Share your experience in the comments below.