Yes, IMS does need to be configured first. The full directions listed here are as follows:
Install the Integration with the Adobe Marketing Cloud standard package. Installing an integration package is the same as installing a standard package, which is detailed in the Package Import section. This gives you access to the shared assets via Digital Asset Manager.
Enable connection via IMS (Adobe ID connection service) to use images shared via Adobe Marketing Cloud in your emails. Consult the section about IMS.
In Administration > Platform > Options, configure the server and Tenant options for Adobe Target:
TNT_EdgeServer: Adobe Target server used for the integration. This option is already selected by default. This value corresponds to the Adobe Target Domain Server, followed by the value /m2. For example: tt.omtrdc.net/m2.
TNT_TenantName: Adobe Target Tenant name. This value corresponds to the name of the Adobe Target Client.
Requirements are as follows:
Adobe Marketing Cloud and Adobe Target tenants
An Adobe Target rawbox specified to establish the connection with Adobe Campaign
Let me know if you have any additional questions on this.
The Target integration is available from build 8640 (released mid-2015) and up. Are both server and client console on a compatible build? You can check this using Help > About. There should be no need to use IMS or to configure a specific external account to make the option visible.