Key Takeaways
- Reddit is gaining traction in the digital advertising space with its unique strategy.
- Reddit’s ad targeting focuses on user interests gauged from the subreddits they visit or interact with, not personal demographics, leading to more relevant ads.
- We found a few ad placements that made sense for the subreddit and posts they were placed on, but the experience is still inconsistent.
Popular community-based discussion platform Reddit finally went public earlier this year, and roughly five months in, the platform is already making a name for itself in the digital advertising space.
Once the wild west of the internet, the platform has matured enough, and it currently boasts more than 100,000 active subreddits with more than 267.5 million weekly active users.
Since going public, the platform has introduced new policies to prevent companies from scraping its data to train their AI models, suggesting that the policy is not just about restricting access to its data, but also protecting user privacy.
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Considering that the platform is a treasure trove of information, all community-driven, the platform targets its users with ads based on their Reddit interests, and not their general demographics like their gender, age, or location (via Bloomberg).
The latter is a strategy used by other larger advertising competitors, including the likes of Meta, Google, and Amazon, while Reddit does not ask users for their names or other personal information while signing up, paired with an option to opt out of sharing their gender and location.
The unique ad targeting approach essentially allows for highly specific and strategic ad placement, like placing an ad for a used car company in a car-related subreddit, or showing ads for phones in the r/Android subreddit.
The ad experience on Reddit is hit-or-miss as it stands now
In our experience, the ad experience is still inconsistent. In some cases, it shows highly relevant ads, as seen in the first two screenshots above. An ad for an online dealership selling RVs on a subreddit about someone using the 2007 Honda Element SC for camping just makes sense. Similarly, an ad for BestBuy on Samsung’s subreddit is what we’d consider optimal placement.
On the other hand, we were also able to spot placements that made somewhat sense (third screenshot), like an ad for 1Password on a post about how the new Windows search bar is “indeed terrible,” paired with ads that made no sense (fourth screenshot), like one for a cannabis store on a post about the Pixel Buds.
It is evident that Reddit has the necessary systems in place to make ads more relevant to its users, and it is likely a question of advertisers increasing their spending on the platform. According to Bloomberg, the platform has surpassed analyst expectations when it comes to sales in its first two earnings reports, and it is expected to surpass $1.1 billion in sales this year and reach $2 billion by 2027.
As users, we’d ideally prefer an ad-free experience, but it’s clear that that’s not how things work in today’s landscape — so we’ll take relevant ads over intrusive or irrelevant ones any day.
