Instagram has an option to report ads by tapping the 3 dots you see in your screenshot near the bottom of the page. There is no guarantee it will stop the ad you see. Instagram obviously prioritizes to those that are paying them and you are simply the product being sold to the advertisers. That is their business model. Any problem you have with an ad that Instagram provides can only be resolved through them.
Ads are the source of revenue and their support article details how they can be created and are very common. It is actually surprising that you have not come across them before.
https://www.facebook.com/business/help/1513393428972189?id=1997185213680277&helpref=faq_content
The ads are not coming from Apple, they are coming from Instagram which is a product you choose to support. As with any third party developer, you would need to contact them if you have a problem with their service and if they refuse to respond, then quit using the app. Apple cannot prevent an app from running ads, it is up to the user if they want to use the app that runs the ads.