Reddit’s ad growth in 2022 outperformed that of many other social media firms.
An interesting piece up on The Information today looks at how the platform grew its ad business.
Despite the downturn in the digital ad market, ad spend by big advertisers on Reddit rose nearly a third year-over-year, according to a report from ad tracking firm Standard Media Index.
In the grand scheme of things, Reddit remains a small player. The report found that last year it drew just 3% of spending by the big advertisers among the major social media networks including:
- Meta
- ByteDance
- Snap
To put that 3% into perspective, Snap and Twitter, also bottom feeders, each drew 10%. But, as piece points out, there are signs Reddit gained some ad dollars from Twitter in the wake of Elon Musk’s takeover, which of course has prompted several advertisers to pause their spend.
In December national ad spending on Reddit grew almost 20% year over year, according to data from Standard Media Index. Meanwhile, during the same month, spending dropped 70% on Twitter, 15% on Meta Platforms, 15% on Snap and 5% on Pinterest compared to December 2021. Spending on TikTok, also grew year over year, by 35%.
🙏 Bolstering IPO Hopes
The growth is crucial for Reddit, which is one of many tech firms expected to go public once the initial public offering market improves.
The piece noted that Reddit didn’t focus on building an ad business until about eight years ago. Before that, media buyers reported that its reputation for hosting violent and hateful content had been an obstacle to wooing advertisers. However, over the past few years, the company has cracked down on offensive content and its recent acquisitions have strengthened its moderation efforts.
Still, media buyers said that Reddit’s lack of scale remains its biggest hurdle to growth in advertising. The platform currently has more than 50 million daily active users globally, according to a January court filing. By comparison, Twitter reported nearly 240 million users last July, while Snap recently reported 375 million users.
Images: The Information/SMI
