Is Most Recent Reddit Scandal a Red Flag for Marketers?

Interim CEO Ellen Pao Released an Apology Amid Firing Controversy

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Ellen Pao, interim CEO of Reddit, issued an apology in r/announcements today in response to backlash that erupted after the firing of an employee.

The commotion began with the departure of Reddit employee Victoria Taylor, who managed the popular Ask Me Anything (AMA) subreddit. Tension built over the weekend, culiminating in 300 subreddits going private to protest the dismissal. By this afternoon, a petition calling for Ellen Pao's resignation had gathered 187,000 signatures, 13,000 from its goal of 200,000.

Ms. Pao's apology cited miscommunication and a "long history of mistakes" before proposing three steps: improved tools, a new moderator advocate and access to an older search function.

That may or may not be enough to quiet the Reddit community, but the drama isn't the sort of thing that will appeal to major advertisers still trying to figure out if Reddit is a safe place to sell. In spite of the site's high engagement levels and hundreds of millions of unique hits monthly, marketers don't quite know what to make of the community.

David Vinjamuri, author of "Accidental Branding" and adjunct professor of marketing at New York University, said the problem is that Reddit "is a very pure expression of democratic interchange," which isn't an ideal setting for advertising.

"The way people express their views there is completely unfiltered," Mr. Vinjamuri said. "You see that in a lot of its controversial content and a generous suspicious feeling toward business."

Mr. Vinjamuri said the site could be profitable platform for certain types of sponsors who are intentionally counterculture and rebellious, but that they have to consider they might appear next to incendiary content that could possibly anger people and turn them against the brand.

Currently, Reddit runs targeted ads that run at the top of subreddits. Brands that work with Reddit include Vice, Goldbely, Funimation, VaporGenie, Bond360, Atari, Newsweek, Adam and Eve, A&E, Hostelworld.com, Penguin Random House, State Bicycle Company and Prizeo, according to the company. The site, which is largely operated by volunteer moderators, has had some roadblocks in its path to monetization, including its community, which is mostly in agreement that monetization is against its values.

Reddit calls itself "the front page of the Internet" and its users often champion the site as a forum for free expression as described on its "values" page. Ms. Pao was made Reddit interim CEO in November 2014.

Last year, Reddit announced plans to improve its self-serve ad product and hire staff for product development with $50 million in venture capital the company raised.

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