Sahail Ashraf posted on 28 January 2021
A weird niche site that quickly became a community of millions, Reddit has done well. Now it is looking to grow, pushing ad spend to brands and generally focusing on entering the same playing field of Facebook, Instagram and the rest. It has a long way to go, but will it even make it?
Something rather intriguing happened in late 2020, and it involved Reddit. If you don’t know what Reddit is, that’s probably because it hasn’t exactly been front and centre in the world of social media marketing. One way to describe it is as a kind of message board that millions around the world use every day. Topics on the message board cover pretty much anything you can think of, and then a lot more.
Reddit is weird and wonderful. It has had its detractors, mainly because some of the conversations and topics on Reddit have been just plain bizarre and sometimes offensive, but at the same time it has been hard to ignore the fact that it just seems to become more popular every year.
In October 2020 Reddit proudly announced that it had averaged 52 million daily users. That sounds like a big number (and it is, of course), but compared to the truly big social media players like Facebook, it’s small. But that’s not the point.
Reddit announced the number, and then it became clear that this was a 44% increase in the same month in 2019. It’s also the very first time Reddit has disclosed this particular stat publicly. And because Facebook and Twitter do it all the time, it seems like Reddit is ready to play with the big kids.
Any business would be delighted with a 44% increase over a year. That’s phenomenal. Reddit was founded in 2005 and pretty much up to this point has remained a reasonably low-key, underground affair. However, with its considerable growth in user base it seems inevitable that Reddit would start to think about it’s position in the social media marketing landscape.
It’s a complex issue. Most industry experts would say that Reddit has stated its user base size because it wants to attract more advertisers. That makes sense. But we’re talking about a platform that is still viewed as left of centre. Some marketers would be wary of dipping toes into the Reddit experience.
The Chief Operating officer of Reddit, Jen Wong, had this to say about the whole thing:
“We’re sharing [daily active users] for the first time as a more accurate reflection of our user growth and to be more in-line with industry reporting. We’re focused on daily usership and increasing this number as we continue to grow our community and scale our advertising business.”
An article in the Wall Street Journal (WSJ) focused on some rather intriguing bits of information around the growth in ad spend at Reddit. Apart from the industry-wide problems with the COVID-19 outbreak, where ad spend dropped dramatically for everyone, Reddit is seeing some very pleasing results on spending on the platform.
In the third quarter of 2020, Reddit was seeing an increase of 83% in ad revenue year-on-year, according to the WSJ. Ad spend is growing massively.
However, at the same time, it is a little skewed by one fact. The ad spending arises from Reddit’s own sales team, making deals and bringing in revenue that way. This means that Reddit is actively seeking advertisers. And that’s significant. No matter how much money is being spent on the platform, it has to be found through a sales team. Brands are not looking at Reddit for ad spend on a proactive level.
Well, not yet anyway. Reddit is, according to the WSJ, in the ‘experimental bucket’ for ad spends when it comes to brands. This is because Reddit has so many communities that cover a wide range of topics. Inevitably, that means that some of these communities will contain content that isn’t always of the savoury kind. The more established communities have grown and become mature (literally), but some of the more leftfield communities have often played host to content that will polarise and offend.
Brands don’t want to be a part of that, so they’re still dipping their toes in that water. And Reddit plans to increase its sales force massively in the year ahead.
Reddit is weird and wonderful, but it won’t stay that way. It’s now looking for profit. We anticipate brands creeping in more and more, until Reddit becomes a viable place to run full campaigns.
If you are involved in the management of social media, you need Locowise. It helps you do your job better. Try a week for free.