The launch of a new ad product isn't Reddit's first foray into increasing its share of marketing spend this year.
Reddit execs were on a mission at this year's CES. A mission to change perceptions of the platform among five major agency holding companies and several global advertisers. The objective? To successfully pitch Reddit as a viable addition to Facebook and Google.
Facebook and Google, the so-called ‘duopoly’ of advertising, have walked very different paths to reach their current, oligarchical status. What they share is the unparalleled ability to connect people with the information they’re looking for, to enable communication limitlessly and increasingly to entertain with professional and shared content.
In fact, they do such a good job that CPM (cost per thousand ad impressions) increased 122% year-over-year (YoY) on Facebook in January last year. With the company posting strong financial numbers for its fourth quarter on Wednesday, it’s almost certain that Facebook’s CPM will see a similar bump as we head into 2019.
The ‘front page of the internet’ has been around since 2005, making it just one year younger than Facebook. The site is essentially a massive collection of forums, where people can share news and content or comment on other people’s posts. Sound familiar?
Buoyed by its 330 million monthly active users, Reddit is expanding its advertising offering to marketers and agencies, hoping its latest product, cost-for-click ads, will draw both audiences to the platform.
Cost-for-click ads, more commonly known as "CPC," charge advertisers for each click that's made and although the format is new for Reddit, it was actually first popularised shortly after Google launched search advertising in 1999.
CPC is tactical. On a platform such as Reddit it represents a low cost alternative for the lower-funnel activities of direct response marketers, who use CPC ads to make sales, or have consumers take a specific action.
So is Reddit undervalued?
Massively so. The main hesitations advertisers have had with the platform are associated with the linger perceptions of a politicised user base that can be less than tolerant of advertising and post content that brands may not want to be associated with.
To that end, during each of the meetings, Reddit’s CEO Steve Huffman, sat down with the agency execs and marketers at CES to answer any questions they might have, in the vein of Reddit’s popular “Ask Me Anything” format.
Perhaps more importantly, the perceived issues and foibles of Reddit are far from exclusive. In the ever expanding world wide web, each and every platform has its own battle with maintaining an engaged, positive user base and a safe, growing inventory for advertisers to engage these audiences.
For now, Reddit remains in the “experimental” spending bucket for most advertisers, but this won’t last. For early movers, able to see what Reddit truly has to offer, the publisher offers inexpensive access to millions of eyeballs. As the proposition matures, with more engaging brand mobile content successfully landing across forums (or ‘sub-reddits’) we can certainly expect awareness and investment to follow suit.
Reddit is expanding the types of ads it offers marketers, hoping its latest product, cost-for-click ads, will woo a different sort of advertiser onto its platform.