Reddit Rolls Out Conversation Ads After Discarding Programmatic

Reddit has launched a new native ad unit called Conversation Placement four months after discontinuing all programmatic advertising on its site on April 30.

Reddit launched a new native ad unit Thursday, four months after discontinuing all programmatic advertising on its site on April 30.

The offering, called Conversation Placement, appears in comment threads on Reddit sandwiched between the original post above and the first comment in the thread below.

The ads are available through Reddit’s direct sales channels or through its self-serve ads platform.

Advertisers can target the new placement based on interests, Reddit communities or using custom audience segments, depending on the campaign objective. They can apply negative keyword targeting so their ads don’t appear alongside posts that contain any of the more than 1,000 words Reddit has deemed unsuitable for advertising.

Buyers are also able to filter the inventory their ads run against through a brand safety partnership with Oracle Data Cloud.

These are the same targeting parameters and brand safety features available for any ad unit on Reddit.

But this is the first time Reddit has run advertising within the conversational flow.

Reddit beta tested the new Conversation Placement for the better part of a year with more than 600 advertisers, including HBO Max, Adobe, Monday.com, The Washington Post and Nespresso.

Careful testing of new ad features and formats is always a must for Reddit, whose users are not famous for their love of advertising.

“[We] were very intentional about rolling out this new advertising surface in a slow and staggered way with clear communication to our community – this wasn’t just sprung on our users,” said Harold Klaje, global EVP and president of advertising at Reddit.

But Klaje noted that the majority, around 69%, of Reddit users, say they respect when brands make an effort to participate on the platform, “especially when sharing messages relevant to the communities they are targeting,” he said.

Apparently, though, programmatic doesn’t fall into that category.

Reddit flirted with the idea of open web advertising on its platform for years, but eventually decided the risks weren’t worth the reward.

The company raked in more than $100 million in ad revenue in Q2 – the same quarter Reddit axed programmatic. Q2 was also Reddit’s first nine-digit quarter for ad revenue, a 192% year-over-year increase.

“Our decision to sunset programmatic ads was part of a natural progression for our ads business as we continue to grow and scale,” Klaje said. “The change represents our ads platform’s ability to stand on its own."

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