How Reddit AI aims to help brands write ads tailored to its user base

Reddit is handing over some advertising tasks to artificial intelligence with a chatbot that writes copy. On Thursday, Reddit released the new AI features in its ads manager, which is designed to write ad headlines catered to the site’s quirky audience. The main generative AI tool writes the headlines on promoted Reddit posts, and it’s “informed by specific-to-Reddit creative guidance, including the language and tone that resonates with our users,” Reddit said in its announcement. Reddit, which went public last week, did not disclose the AI partner involved in its new ad tech. The AI enhancements, though, are part of a wider revamp of Reddit’s ads, automating the creation and bidding process. The ads manager can run campaigns according to goals such as conversions and app installs, which means the platform determines when an ad has the best chance to drive a direct action. Reddit also said it made improvements to budget and campaign management controls. (Click image enlarge) Also read: Reddit’s new ad format looks like user posts Reddit laid out its advertising roadmap during the IPO process leading up to its stock market debut, revealing it has 73.1 million daily users who visit the tens of thousands of niche communities called subreddits. In 2023, Reddit generated $804 million in ad revenue, an increase of 21% from 2022. The company noted its reliance on a core group of advertisers, saying that the top 10 brands on the site accounted for 26% of the spending. Some brands can find Reddit to be a difficult environment because of the quirks of its communities. But Reddit could lower the barrier to entry for some marketers with the new AI and automation. The company noted that the changes to the ads manager were meant to help on-board smaller advertisers. “Every campaign on Reddit is unique, and we’re focused on serving our advertisers’ needs while providing best practices on creative, strategy, and campaign management,” Jim Squires, Reddit’s executive VP of business marketing and growth, said in the announcement. In its public filings, Reddit disclosed that 65% of its direct ad revenue comes from large customers, members of the Fortune 500 brands, and 30% of ad revenue comes from mid-market and small businesses. Reddit’s competitors have released more AI and automation into their ad managers as well. Last year, Meta launched what it called AI Sandbox, a generative AI platform that creates ads. LinkedIn, which is owned by Microsoft, incorporated a co-pilot, a chat-based AI assistant, into its self-serve ad manager. Last year, TikTok released “smart performance campaigns,” which automated targeting and bidding strategies. The growing interest in AI partly explains the rise of automation within the platforms, but the machines also help advertisers at a time when they are losing visibility into data about consumers. There have been changes to online tracking rules, such as Apple’s data restrictions and the deprecation of cookies, and social media sites have more signals than marketers to make more efficient advertising decisions. The automation helps test multiple ads with multiple audiences; it makes complex bidding decisions; and generative AI is used to configure the ads. As for Reddit, AI is part of its business plan beyond just advertising. In February, Reddit struck a deal with Google, worth $60 million a year, to lend its data to train AI models. Last week, after its IPO, Jen Wong, Reddit’s chief operating officer, talked with Ad Age about the company’s strategy to reach more advertisers. Reddit has been rolling out new ad formats and introduced tools for businesses to create official profiles on the site. As businesses grow organically on Reddit, they could turn into paid advertisers.

How Reddit AI aims to help brands write ads tailored to its user base

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