While Instagram Shopping’s ability to feature products was only available in organic posts and stories, that is now in the past. As they themselves said on Instagram: “We are now offering shopping companies the option to run their current shopping posts as ads as part of our ongoing commitment in creating the best shopping experience, providing their wider target audience with the same experience. Shoppers who click on these advertisements will be taken to an Instagram product overview page and can continue purchasing from the mobile site of the company”.
That means you can pick an existing shopping post with a single picture to run as creative for your ad or create a single shot organic shopping post in the Instagram app by tagging items from your catalog. You can only choose an organic shopping post that has never been run as an ad through the “Use existing post” feature. You can only use single picture posts as ads at this time (videos, carousels or branded content posts are not supported).