Reddit is rolling out video ads and improving its ad-buying platform
CANNES, France – While Snapchat had its Ferris wheel and Google and Facebook had their beach setups, Reddit was low-key at the Cannes Lions ad festival this year, renting a modest apartment near the action on the busy coastline.
But the high-trafficked website did come with a fresh pitch for advertisers. It is rolling out video ads, which will be available through its sales team and its existing self-service ad buying platform.
“It’s really exciting for us because Reddit does not currently host video,” Reddit Co-Founder Alexis Ohanian said. “It made a lot of sense and we had a lot of advertisers asking us for it, so we built it.”
Reddit wants to encourage more advertisers to consider the link-sharing site that calls itself “the front page of the internet” as a destination for their marketing budgets.
The self-serve ad buying platform has been overhauled to give advertisers more options to buy ads on the site. Reddit sells sponsored posts, mobile “cards” and banner ad formats
Reddit is also partnering with media agencies including WPP’s Essence and Omnicom Group ’s Resolution Media to build self-service ad products for their clients to use.
“Reddit is one of advertising’s best kept secrets,” said Sherwin Su, associate director of social at Essence. “At the core of their platform is a highly passionate and engaged group of users who are influential, authentic and disruptive across the internet
The company launched its first official mobile app last year and a desktop redesign is also on the way in the fourth quarter of this year. Desktop ad units, which currently sit at the top of the page, will soon appear in-line with feed. Reddit is also looking at ways to provide more data for marketers about what people are saying about their brands and product categories on the site.
“What [marketers] are clamoring for most is a dashboard” to monitor their brands, Mr. Ohanian said, although there are no immediate plans to launch one.
Reddit was the 64th most-visited website in the U.S. in May with 48 million visitors, according to comScore. Research firm Alexa ranks Reddit as the seventh most visited website worldwide, which demonstrates the opportunity for marketers to reach big audiences on the platform.
But there are also challenges. The language shared by Redditors can sometimes be coarse. Marketers may be wary of the appropriateness of their ads appearing against controversial discussion topics. The issue of “brand safety” drew headlines this year after newspaper reports showed ads next to extremist content on YouTube.
Redditors also can be quick to turn on posts they feels are overly-promotional. There’s even a sub-reddit dedicated to shaming company shills they believe are posting on the site, called /r/hailcorporate.
But Mr. Ohanian said Reddit can put on the “guard rails” to prevent ads from appearing next to certain communities and keyboards. It is also testing tools with brands including Nintendo, Washington Post and Major League Baseball to help marketers manage their profiles and presence on Reddit, which Mr. Ohanian said has “eliminated the stigma of self-promotion.”
Reddit’s message to marketers is that the benefits of having a dialog with an engaged community outweighs the risks. It does not offer the same level of sophisticated ad-buying, measurement and account management teams that Google or Facebook does.
“The first decade of social has been remarkably anti-social — all these tools are for broadcasting,” Mr. Ohanian said. “The places where brands are starting to get real traction is where they are going to have that conversation with customers. Reddit happens to be really good at that.”
Reddit has grown its team significantly in the two and a half years since Mr. Ohanian and his co-founder Steve Huffman returned to the company, having left in 2009 to start up the travel site Hipmunk. Reddit had 65 employees two years ago and now it has 215 people.
Mr. Ohanian declined to comment on Reddit’s financial performance. A spokeswoman said 5,000 businesses have used the self-service platform to date. Mr. Ohanian also declined to comment on a Bloomberg report that Reddit is looking to raise a $150 million round of investment that would give the company a valuation of about $1.7 billion.
Reddit was founded in 2005 by Mr. Ohanian and his then-fellow university student Steve Huffman. The pair turned down an acquisition offer from Google just months later, although the site was sold a year after to magazine publisher Conde Nast.
Conde Nast spun off Reddit in 2011, although it is still a shareholder in the company. Reddit has raised just over $50 million in funding to date, according to CrunchBase.
“We don’t want to have to be dependent on fundraising,” Mr. Ohanian said. “The strongest position any company can be in is being able to grow your own destiny.”
Image: Photo: Garry Tan
Write to Lara O’Reilly at lara.o’firstname.lastname@example.org