In recent years Reddit has become among the most popular social news and discussion websites across the globe. Founded in 2005 by two college roommates at the University of Viriginia, the website that claims to be “the front page of the internet” has seen exponential growth in monthly active users over the last 3 years. In 2019, there were more than 430 million monthly active Reddit users worldwide, a 30% increase from 2018. That same year Reddit jumped ahead of other social media giants such as Twitter and Pinterest in terms of total active users. An estimated 25% of US adults use Reddit.
The core of Reddit is its diverse group of active communities. Reddit is composed of more than 2.6 million communities, or “subreddits” where users discuss different topics that correspond to each specific subreddit. This vast network of what are essentially online discussion and sharing forums offer advertisers unique opportunities to reach users who are actively engaged with communities around specific topics, brands, events, sports, hobbies, professions, and everything in-between. There is a saying among Reddit users, “there is a subreddit for everything”, highlighting the number of active communities focused around even the most extreme niche of topics. Reddit’s large network of active communities around specific topics offer advertisers the ability to reach users who are highly engaged around topics relating to their products & services. Aside from targeting by specific subreddits, the platform also offers campaign targeting by user interest. In 2021, Reddit is forecasted to bring in $290 million in advertising revenue in the United States (a 4x increase compared to 2018).
Ad Types
Reddit currently offers two main ad types; promoted post ads and display ads. Promoted post ads are available to advertisers in Reddit’s self-serve ad platform and appear to users similar to organic user submitted Reddit posts with the added inclusion of a “promoted” tag accompanying the post. Promoted post ads can contain either internal or external clickthrough links. Reddit classifies promoted post ads linking outside Reddit to an advertiser’s site as “Link Ads”, while promoted post ads linking to another page within Reddit, whether linking to a specific Reddit post or subreddit, are called “Text Ads”. Text ads will often outperform link ads in terms of ad delivery as Reddit prioritizes this ad type to keep users on their platform for longer durations.
Reddit display ads operate similar to traditional online display ads and are only available to advertisers through Reddit’s managed advertiser program. To access Reddit’s display ad unit, advertisers must first contact Reddit’s sales team. Display ads are geared towards larger advertisers and command a minimum campaign budget of $30,000. Reddit’s managed advertising program offers a dedicated account manager for all accounts and personalized analytics reports which are unavailable to advertisers using Reddit’s self-serve advertising platform.
Campaign Budgets
Reddit advertising campaigns are priced by CPM (cost-per-thousand-impressions). Unlike most other social network ad platforms, Reddit uses a second price auction model where the highest bid for a target audience wins the impression, but the price paid is the second-highest bid plus $0.01. Reddit ad campaigns can be set to use either daily campaign budgets or lifetime campaign budgets. Advertisers set a desired CPM bid for each campaign, which can be somewhat difficult for new advertisers as they may not have a firm grasp on typical CPM rates Reddit charges based on the advertiser’s targeting criteria. For this reason, it is best practice for advertisers to regularly check-in on their campaign’s ad delivery and CPM bid price adjusting the bid price as needed to ensure maximum ad delivery without overpaying for impressions.
Campaign Targeting
Experienced advertisers who are new to Reddit’s self-serve ad platform will immediately recognize similarities with other social network’s ad platforms in both user interface and functionality. Reddit offers 6 forms of targeting criteria for promoted post ads within their platform. Targeting criteria such as interest, location, platform (desktop vs. mobile), mobile device type (iOS vs Android), and time of day targeting are all targeting attributes commonly seen across other ad networks. In addition to these targeting attributes, Reddit offers the ability to target promoted post ads to specific subreddits which allows for an enhanced degree of targeting around specific topics, brands, events, sports, hobbies, professions, etc. Reddit expands on the value proposition of targeting by specific subreddits by offering transparent subreddit audience sizes and engagement rates. Additionally, there are many third-party sites that track subreddit activity, subscriber count, and user growth such as RedditList.com. Advertisers can benefit greatly from researching and curating a list of subreddits to target based on their relevancy to the advertiser’s product or service, as well as each subreddit’s subscriber count, active users, and engagement rate.
Before dipping their feet into the waters of Reddit advertising, new advertisers should familiarize themselves with the platform by exploring the site and understanding ad placements across the homepage, subreddit pages, and post pages. Reddit users have a reputation for being averse to traditional social media advertising encouraging engagement users are used to seeing on platforms like Facebook and Twitter. For this reason, it is recommended not to allow comments on Reddit ads unless the advertiser is fully equipped to respond and moderate comments and a regular basis. This is also a critical factor in why effective subreddit targeting is so important. Ensuring ads reach users who are most likely to see value in the content of the ad and have a positive reaction to the ad’s message will result in an effective Reddit advertising campaign.
For more information on Reddit advertising and help with campaign management and optimization, contact Anvil Media today!