Reddit’s ad business is looking good, according to marketing analyst Emarketer. It’s going to keep getting better if advertisers are willing to look pass the controversial content frequently shared on the site. In a recent report, Emarketer predicted that the social blog’s ad business will grow 55 percent in 2019, crossing a $100 million milestone. If that trend remains consistent, Reddit’s ad revenues will more than double by 2021, reaching $261.7 million.
With expected net US revenues to reach $119 million this year, Reddit’s ad business will account for a 0.1 percent share of the US digital ad market, reports Emarketer.
“The company has retooled its ad offerings over the past year, which included the launch of new ad formats like autoplay in-stream video, cost-per-click, app install and ‘Top Post Takeover,’ which allows brands to have their ads appear on the site’s front page,” Emarketer forecasting director Monica Peart says in the report. “Like most of the companies for which emarketer produces estimates, advertising is not Reddit’s only source of revenue.”
Reddit came in with its mobile app a little late in the game, which means most of its revenues come from laptops and desktops. However, Emarketer says this year mobile will account for 57 percent ($67.8 million) of revenues.
Clearly, Reddit’s reputation as a platform for advertising is growing. However, some advertisers are hesitant to cash in on the platform’s booming success in advertising, fearing the controversial content in the site’s forums.
“As a mix of forum and trending news site with a bit of social network, reddit has operated on an ‘open internet’ ethos,” Peart says. “While that has yielded organic growth among a hard-to-reach audience, it has also meant a reality where controversial content is the norm. And in a news climate where missteps can tarnish results, that makes some digital advertisers nervous.”
Reddit’s user growth is much slower than its ad revenue. According to Emarketer, user growth will decrease to single digits this year. About 26.4 million people are on Reddit at least once a month. It should be noted that a visitor does not have to have a Reddit account to use the platform. Anyone can use the platform to read news, watch videos, and discover subreddits. However, only account holders can upvote, downvote, comment on, and post content. Ads on the platform are seen by anyone who visits the platform, account holder or not.
“Reddit’s users are tech-savvy and highly engaged, making them attractive to advertisers,” Peart says. “A large portion are unique users, meaning they don’t use other social platforms. That means advertisers have the potential to reach new audiences in a highly targeted way.”
In any case, Reddit is a platform advertisers should keep tabs on in the social media marketing game.
