This study aims to explore the role of Instagram Ads in enhancing social media engagement and sales. Data were collected from a SME offering pastry products in Palembang, Indonesia. This research employed the action research approach. The implementation lasted for one week in April 2021. The results showed that Instagram Ads have no effects on social media engagement. However, the paid ads have significant and positive impacts on leads (i.e., on Instagram Direct Message and WhatsApp), total buyers, and sales. This research enhances social media marketing literature, especially in the context of paid ads on social media. Lastly, this study benefits SMEs by providing evidence that Instagram Ads are significant for SMEs' financial performance.

Keywords : Instagram Ads; Social Media Marketing; Small and Medium Enterprises; Social Media Advertising