Publishers covet business from big brands, but working with small to mid-size businesses (SMBs) can be a major source of revenue growth. After all, SMBs have historically been revenue drivers for Meta and Google.
That’s why Reddit is shoring up its ad offering for SMB and mid-market clients by improving its onboarding process and launching an advertising API.
The small advertiser category is already one of the strongest contributors to its monthly active advertiser growth, said Evan Wolf, Reddit’s head of mid-market and SMB sales for North America. As Reddit seeks scale, it’s planning on SMB clients to provide that scale.
The allure of Reddit is its engaged audiences. Over 100,000 niche subreddits like r/gameofthrones, r/wallstreetbets or r/fantasyfootball offer an opportunity to find people obsessed with following and commenting on a topic.
Reddit’s internal sales team packages those communities into interest-based contextual categories. Advertisers can then run campaigns across a number of related subreddits.
For example, [cosmetics brand] e.l.f. ran seven category takeovers in August to coincide with the launch of a new skin care line. The takeover ads ran in cosmetics-focused subreddits like r/beauty, but they also ran in tangentially related subreddits like r/GirlGamers.
Reddit’s contextual relevance will be its strength as the digital ad industry seeks new targeting methods due to the deprecation of signals like third-party cookies and device IDs, Wolf said.
“[Signal loss] is going to put more pressure on platforms to show contextually relevant ads with less information about the user,” he said. And Reddit has context and privacy baked into its content model, in which anonymous users post messages to groups that share common interests, he said.
Reddit’s advertising model includes native placements, like sponsored posts, which appear within a user’s content feed. Brands can also participate in a time-honored Reddit tradition: the “Ask Me Anything” thread, in which the brand responds to questions from the community.
Because Reddit offers inventory like full-screen display or video takeovers that can drive brand awareness, as well as inventory like sponsored posts that are more geared toward driving clicks and transactions, Reddit wants SMBs to consider its ad platform a full-funnel offering.
Sometimes, brands will run a mix of ad types. For example, survey software provider SurveyMonkey ran a takeover video ad on Reddit’s front page, followed by a series of native posts promoting its software.
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Running the takeover video as a brand awareness play increased click-through rate on the promoted posts by 52%, said Jacqueline Look, senior manager of growth marketing for Momentive.ai, SurveyMonkey’s parent company.
A study by Reddit and Kantar after the campaign found that SurveyMonkey’s brand favorability exceeded Reddit’s benchmarks by 1.9x.
So SurveyMonkey is throwing more of its money into Reddit, earmarking more than 10% of its brand awareness budget to advertising on Reddit.
SMB-focused ad stack
But Reddit’s competitors offer ad managers with deep capabilities and scale, so Reddit is trying to make the experience easier for smaller marketers.
It streamlined the onboarding process by introducing live chat and a feature that helps advertisers deploy tracking pixels correctly. And it’s emphasizing performance marketing capabilities for direct-to-consumer (DTC) brands by building out measurement and attribution.
On Thursday, Reddit launched its advertising API. VidMob, Sprinklr, adMixt and PMG were named as launch partners. The VidMob integration adds creative analytics to Reddit’s ad platform, while Sprinklr brings customer experience management and adMixt brings customer acquisition optimization. The PMG integration allows advertisers to take advantage of the ad agency’s resources and allows its clients to scale more easily across Reddit’s entire platform.
And, to further appeal to DTC brands, Reddit is emphasizing the effect its crowd-sourced communities – which often draw curious shoppers looking for recommendations from real people – can have on a user’s path to purchase.
“When someone visits Reddit, they’re going to have more conviction in their purchase decision,” Wolf said. “They decide nine times faster and they spend 15% more when they ultimately make a purchase.”
