January 21, 2021

Reddit - Advertisers' Adoption of Reddit Building in 2021

FB, GOOG, GOOGL, MSFT, PINS, SNAP, TWTR
By Robbie Scott
Advertising budgets have begun forming for Reddit in 2021, primarily from B2B, financial services and technology advertisers, and brand safety concerns have been alleviated by Reddit’s robust targeting.

Advertisers increased their adoption of Reddit Inc. during 2020 and expect to allocate more to the platform during 2021 because of sophisticated targeting, improving efficacy, expanding industry use cases and positive direct-response results. “We are launching more campaigns on Reddit in 2021. I’ve been pushing out clients to spend there for a while because it’s a great opportunity for reach and they have a highly engaged audience. On Reddit, we are able to go after niche audiences based on subreddit topics, which enables us to do some interesting audience targeting,” a source said. Another said, “Reddit’s targeting via subreddits are creating a unique interactions with audiences. We can target specific subreddit topics, which deliver a highly engaged and relevant audience. So take a home products brand, for example: We can target a subreddit geared to household projects and generate a lot of leads and conversions.”

Sources reported strong early success among B2B, technology and financial services advertisers, with budgets forming incrementally and carving out some funds allocated to Microsoft Corp.’s LinkedIn and Twitter Inc. Targeting subreddits based on conversation and topic has enabled advertisers to reach into highly engaged audiences that are relevant to their products and services. “Interest-based targeting on Reddit is very efficient, and we’re seeing strong return on advertising spending. For B2B brands, LinkedIn has gotten so expensive, and we are seeing Reddit gain share of B2B budgets over the past two quarters. For technology or software B2B, Reddit is rapidly becoming a better platform to reach programmers and CTOs than LinkedIn,” one said. Another said, “Reddit is working really well for financial services advertisers, especially anything investing related. One of our clients pushed signups for a free trial of their financial planning app by targeting the channels where users were complaining about their competitors. Returns on the campaign have been super profitable so far.” Sources said audiences’ propensity to turn to Reddit for problem solving raises the quality of its impressions. “Reddit can be very effective for B2B advertisers. It's a great alternative to LinkedIn because users are there to problem-solve for open-source software and other tech-related topics,” one said.

Home products and services, lifestyle and ecommerce advertisers have also found early success using subreddit targeting of consumer discussions related to projects, interests and aspirations. “Reddit is more of a direct-response platform than brand awareness because of the nature of the ad unit. The creative is all about getting to the point with the big headline rather than a more drawn out 15-second video. We've found that [Alphabet Inc.’s] Google Display creative drives the best results on the platform,” one said.

Brand Safety Not Hindering Adoption
Brands and SMBs have been hesitant to dedicate advertisement spending to Reddit because of brand safety concerns stemming from objectionable content controversies. However, sources said updated content policies, precise targeting of trusted subreddits and the social media ecosystem as a whole being rife with brand safety risk has now begun to help mitigate advertisers’ concerns. “Brand safety on Reddit has improved leaps and bounds over the past year. We are able to exclusively target specific subreddit feeds, which keeps us away from any objectionable conversation or content on the platform. When you compare what’s happening on all of the other social media platforms, Reddit is actually a pretty safe place for brands,” one said. Another said, “Brand safety is more of a risk on [Alphabet’s] YouTube than it is on Reddit at this point. The hard thing with YouTube is that we can target by demographic, so a brand can show up on whatever a 40-year-old with a college degree is watching on the platform. Reddit is more about interest-based targeting, so brands can specify which subreddits they want to align themselves with.” Sources also said the ability to blacklist certain subreddits has helped brand safety. “The ability to blacklist certain content on Reddit and the lack of political ads on the platform is attractive to brands,” one said.

Sources also said Reddit’s self-serve network and highly engaged internal sales team has helped drive incremental brand adoption. “The self-serve platform on Reddit is easy to use, and Reddit’s advertising team and support has been terrific. They are becoming better than Facebook [Inc.] when it comes to support from the sales team,” one said.