Reddit's chief operating officer on how the platform is doubling ad revenue
Reddit, the self-styled “front page of the internet,” is on a roll. Despite a lingering reputation for having a brand-unsafe environment (where a small fraction of sub-sections or "subreddits" had historically embraced white nationalism or toxic masculinity), the online bulletin board and collective of micro-communities is on target to double its ad revenue in the U.S. from $100 million in 2019 to $200 million in 2021, according to an eMarketer report from earlier this year.
This growth is largely the result of a one-two punch of cleaning up the platform and building out its advertising business. Today, for example, video ad formats account for more than half of Reddit’s inventory. “That’s pretty amazing because when I got here, we didn’t have video as an ad format,” says Chief Operating Officer Jen Wong.
Wong is the latest guest on the “Ad Lib” podcast (on which she demurred to discuss possible plans for Reddit to introduce pre-roll ads, the commercials that run before videos embedded in the platform). She is more than happy, though, to discuss the power of community, both to bolster an idea and to ultimately create a safer space for brands.
She describes an "idea that conceptually we share responsibility for the health and safety of the platform with our communities.” She compares it to a system in which Reddit itself acts as the "federal government" while individual subreddits, or topic-specific communities, act as states that govern themselves. “Community: that’s our special sauce,” she says. “It is really architecturally different than any of our peers.”
A cynic might characterize that as Reddit outsourcing the ultimate responsibility of the platform’s tone and safety to its users. However, a new YPulse study commissioned by Reddit and released today includes the surprising stat that 72 percent of Reddit users, or Redditors, say brands are welcome to join the conversation.
And brands are joining that conversation. This month the National Football League signed a revenue-share deal with Reddit—which will include video-on-demand and a series of Reddit’s signature “Ask Me Anything” discussions. Also this month, a piece of interactive branded content by Adobe called Layer became the fastest-growing community on the platform that week. On Layer, users are invited to add to an ever-growing piece of creative generated by entire communities. But let that sink in: An ad was the most quickly-embraced piece of content on the site last week.
To hear Wong describe it, she’s not surprised. “In everything you do [as a marketer] you’re weighing an ROI. If you listen to actual analyst reports right now and what marketers and companies that are marketing driven are talking about it’s growth, growth, growth. That is the pressure on any CMO,” she says. ”Along comes Reddit, that is offering new inventory, unduplicated reach, an environment that has high trust and authenticity. It has [user generated content] and all the aspects of UGC and the range of what that can bring … That’s why I think our business is doubling: Because the net benefit of what they see can be so transformative to a business.”
Listen to the conversation for more, as we discuss Reddit’s data play, policing fake news in an election year and other Reddit monetization efforts like Reddit Coin.
Stick around long enough, and you’ll hear Wong question my own faith in humanity.