You can add background audio by tapping the "Tap to add music" button in three ways:

  1. Add from Music Library - this allows you to add songs from your Apple Music. First, go your Music app and make sure the song you want is owned and downloaded from the cloud already.
  2. Record from Microphone - Record any sound you want use it as background music
  3. Use audio from video - Use the audio from any video you have in your Photos app.

Once you add the audio, you can tap on it and select Edit (pencil icon) to trim the audio and change volume level.