In 2023, Reddit laid significant groundwork for its ads business. This included focusing on commerce and performance enhancements and setting the stage for a major push into the advertising market, possibly even including its long awaited IPO.
With a (potentially) big year ahead, Digiday caught up with Reddit’s COO Jen Wong and evp of business marketing and growth Jim Squires to get the lowdown on how the platform woos marketers, its stance on privacy and its focus on covering the full funnel in 2024.
This interview has been lightly edited and condensed for clarity.
Jen Wong: First, the thing that is texturally really different is our unduplicated interest graph; you can’t find certain targets on other platforms because users are not actually revealing their interests.
Second, Reddit is really different because it’s rooted in community. You can converse back and forth with a community, in addition to seeing people’s interests that you can’t see anywhere else. You can see what’s happening in these communities in a way that’s very rich, that you can’t see in other places.
In 2023, we put a big effort into performance and measurement. So across the funnel, we’ve worked on Pixel adoption and measurement, we also launched Reddit brand lift and conversion lift. We’ve done an incredible amount of research with partners. We grow because we demonstrate the value. We’re very performance oriented in terms of outcomes for our clients.
Jim Squires: Tapping into the superpowers of the platform we also have potential keyword targeting, hashtags to the conversations that people are having are very unique to Reddit, and we also launched product ads. Once you start having some great cases and examples that really can inspire others.
Wong: We have partners for third party measurement too. We created first party because small advertisers can’t afford it and we want them to be able to scale. So they asked for it.
Your ads business is split across the upper, mid and lower funnel. Which is the fastest growing part?
Wong: Brand is our heritage, so it’s our largest portion. But the middle is growing and probably grew the fastest last year. But they’re all growing and they all provide opportunity.
How long does it take to subvert the assumptions that marketers might already have about Reddit as a platform?
Wong: For new advertisers, I think there’s probably some more myth-busting to do. Common ones are that Redditors don’t like advertising or they’re too truthful. And another is about a suitability issue.
But by the size and growth of our brand business, I feel like we’ve done a pretty good job in educating marketers on that front. The thing is, we have tools in place to help marketers. They can really tighten up their targeting if they want, they can use a third party to verify adjacencies if they want. But nobody uses it. We have negative keyword targeting which we offer, but they don’t use it.
Squires: For new advertisers, it’s about experiencing the platform running to understand the mechanics. If you think about the moderator model, every sub-Reddit has moderators who adopt rules that are keeping it on task and in the right place.
We use AI and machine learning to ensure anything which violates policy gets taken down, and we ensure the inventory that we are running ads in, is actually hand selected to inventory across the specific communities. So once you understand the mechanics of how it works, it’s no longer part of the discussion.
Wong: I joined in 2018, so I saw the whole journey of educating the market on how we do safety compared to our peers. It took a while to get that narrative out. And there’s a hangover from some wild years before Steve [Huffman] came back [as CEO in 2015].
Since then, if you’re not as familiar with the platform, or a user, it takes a little beat to grasp the moderators, and how to use the platform, because the dynamics are so different than social media. It’s hard, because we’re in the social media bucket, because we’re a privately bidded auction that’s UGC. But then, as people get to know us, they see we’re context and words, and that’s digital advertising. What’s interesting is, now we hear about people using Reddit for search and how we’re one click past Google, and we’ve actually been working on our search capabilities.
We don’t fit any mold. It’s a mature industry with structures that were built before we existed. We try to slot ourselves into the slots that were given. But the reality is, we’re a community platform with social features. And high intent like search. That’s what we advocate.
How does the business operate in Europe, from a privacy perspective?
Squires: What’s unique about the platform is the user anonymity, so by nature the platform is privacy safe. We focus on contextual interest-based advertising. That’s not new for Reddit. We’ve been around for 18 years, it’s part of our DNA. It’s simply more important and valuable to marketers now.
Has it underpinned any interest demand from U.S. advertisers and are you expecting that to increase?
Wong: I think it gives our partners some comfort that we’re very thoughtful in this area, and that there is unlikely to be some sort of diminution in quality or fidelity or measurement because we built something that is going to be chopped down one day.
Wong: We’re format agnostic, but video is growing a lot on our platform with us doing very little.
What matters to us is that the conversation around video is robust because Reddit is all about the conversation.
We haven’t yet reached what we want in terms of the level of conversation around video. But we’re working on that. Ultimately what matters to us is the video experience, not the volume of viewing. It’s about the conversation around it because the ideas, the information and that engagement — that is what’s important and what makes Reddit special. Video is immersive but passive, which is very different from Reddit — reading comments — which is a very active mindset. So it’s important to us is maintaining that activity.
What are the key focuses for 2024?
Wong: We’re moving toward having a full-funnel approach for our partners because we have the capability to have an unduplicated audience and deliver that high intent traffic which takes action. We’ve invested a lot to build the infrastructure for it, a lot of which is ML and neural networks to get the predictive modeling for the performance. I’m really excited to be able to do that for our clients who see that opportunity.
The second is having more refined products that our partners can use. That’s an opportunity for us to start to get into specific capabilities at driving more performance.
Squires: That’s all in support of our aspirations to be the leader in contextual and interest-based advertising. Everything we’re doing across the roadmap is to support that vision because that really is Reddit’s super power that we can relay to marketers.
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