Reddit Offers Ad Credits To Attract New Advertisers
Reddit is offering new advertisers credits to spend in Q4, but advertisers want better proof of its effectiveness. The move comes as the platform's ad revenue growth has slowed.
Original reporting · digiday.com
Original: “Reddit dangles seasonal ad credits but advertisers still want better proof it works all year round”
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How this was written. Clicktag wrote this article with a language model from Digiday’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Digiday’s report
- Reddit is offering new advertisers credits to spend on its platform during the fourth quarter.
- The platform's ad revenue growth has slowed in recent quarters, with the rate of growth decreasing from 74% to 54%.
- Advertisers are cautious about committing to Reddit due to concerns about its ability to provide effective advertising solutions.
- Reddit needs to demonstrate that it can provide meaningful returns beyond the initial incentive to convince advertisers to invest in the platform long-term.
- The platform's success will depend on its ability to convert new advertisers into long-term investors.
Reddit is providing incentives to new advertisers to spend on its platform during the fourth quarter, a period when advertising budgets are typically at their largest. According to Digiday, the social news website is offering credits to new advertisers who launch campaigns before November 20. In the US, new advertisers can receive $1,500 in ad credits when they spend $1,500 on the platform.
The incentives are part of Reddit's usual advertising calendar, but they come at a time when the platform is experiencing a decline in search referrals. This decline is partly due to Google's AI search features, which have reduced the number of referrals to Reddit. As a result, advertisers are looking for more evidence that the platform can deliver results throughout the year, not just during the fourth quarter.
Advertisers are cautious about committing to Reddit due to concerns about its ability to provide effective advertising solutions. While the platform has introduced new features and capabilities, it still lags behind its competitors in areas such as measurement and targeting. Independent ad tech consultant Jonathan D'Souza Rauto notes that Reddit is making progress, but it still has work to do to convince advertisers to invest in the platform long-term.
Reddit's ad revenue growth has slowed in recent quarters, with the rate of growth decreasing from 74% in the first quarter to 54% in the third quarter. Despite this, the platform remains optimistic about its prospects, pointing to its continued revenue growth and strong demand from advertisers. Natalie Maguire, director of global B2B communications at Reddit, says that the platform's numbers demonstrate its attractiveness to marketers.
Some advertisers find Reddit to be a valuable platform for reaching engaged users, particularly those who cannot be reached on other platforms such as Meta. James Mortimer, at Roast, notes that Reddit's users are highly engaged, making it a useful platform for advertisers who can effectively target them. However, other advertisers are more cautious, citing concerns about measurement and the platform's ability to drive quality traffic.
To convince advertisers to invest in the platform, Reddit needs to demonstrate that it can provide meaningful returns beyond the initial incentive. This will require the platform to improve its advertising solutions, including measurement and targeting. Until then, advertisers are likely to remain cautious about committing to Reddit, and the platform will need to continue offering incentives to attract new advertisers.
The success of Reddit's incentives will depend on its ability to convert new advertisers into long-term investors. While the credits may bring new advertisers to the platform, they are not a guarantee of long-term commitment. Reddit will need to work to build trust with advertisers and demonstrate the effectiveness of its platform in order to achieve sustained growth.
Questions and answers
What is Reddit offering to new advertisers?
Reddit is offering new advertisers credits to spend on its platform during the fourth quarter, with credits ranging from $1,500 to £2,000 depending on the location and spend.
Why are advertisers cautious about committing to Reddit?
Advertisers are cautious due to concerns about Reddit's ability to provide effective advertising solutions, including measurement and targeting.
What does Reddit need to do to convince advertisers to invest in the platform?
Reddit needs to demonstrate that it can provide meaningful returns beyond the initial incentive, by improving its advertising solutions and building trust with advertisers.
