It is estimated that more than 80 cents of every new dollar of digital ad spend now goes to two companies: Google and Facebook.

But despite the fact that companies not named Google and Facebook are fighting for a shrinking portion of an otherwise growing pie, one company is aiming to significantly bolster its position in the digital ad market.

The company, Reddit, operates what it calls "the front page of the internet" and the name isn't just marketing buzz: according to Alexa, Reddit is now the fourth most popular site in the U.S., attracting some 250m users a month, and has an average daily time on site of over 16 minutes, nearly six minutes more than Facebook.

Despite its popularity, however, Reddit has struggled to build the kind of booming advertising business one might expect a site with so much traffic and stickiness to have. That's largely because Reddit, which is powered by the contributions of users who are referred to as Redditors, is considered a tough nut for advertisers to crack.

Not only have the tools it offers advertisers been rudimentary compared to those provided by other ad players, there's a belief that the Reddit community is, by and large, hostile to advertising, making Reddit an uncomfortable and even risky platform for advertisers to invest in.

Trying to change perceptions

Reddit, which was once owned by Condé Nast and then spun off, has raised $50m in funding since the spin-off. Clearly, Reddit's investors want a return and the company is trying to change perceptions in an effort to lure more ad dollars.

Reddit recently attended the Cannes Lions ad festival for just the second time ever and co-founder and chairman Alexis Ohanian was busy pitching advertisers on its updated self-serve ad platform, which lets brands more easily manage their campaigns, test creative and obtain analytics data. 

According to Ohanian, Reddit's self-serve ad platform hadn't been updated in nearly eight years.

Reddit, which has thus far offered a limited set of ad formats that include sponsored posts and banner ads, is also adding a new video ad format that has already been piloted by Universal Pictures and A24 Films.

Not Facebook

Despite the fact that Reddit is now competing more aggressively for ad dollars, it isn't comparing itself to social platforms like Facebook. In fact, part of its proposition is that it isn't like other social platforms.

"There's no other place on the internet where people all come together because of the conversation," Ohanian told AdWeek. "Because people aren't worried about their perfect Instagram life, they're just being honest and open. It's a unique place because everyone is self-selected into communities."

According to some, Reddit's unique characteristics make it a very valuable ad platform if used correctly. Sherwin Su, associate director of social at digital agency Essence, went so far as to tell the Wall Street Journal, "Reddit is one of advertising's best kept secrets."

For years, stories, mostly posted by individual entrepreneurs and small businesses, have circulated, many touting the fact that Reddit ad campaigns can drive a lot of traffic quickly and much more cheaply than other ad platforms.

But what about big brands? Over the past year, Reddit has been trying to help larger advertisers achieve similar results and there's some evidence the effort is paying off.

Netflix used Reddit ads to promote its show, Wet Hot American Summer, and Toyota ran a campaign that invited Redditors to share their stories about their Rav4 vehicles. According to Reddit's VP of sales, Zubair Jandali, the campaign resulted in brand favorability that was six times higher than the category average.

Worth a second look?

While such campaign results are promising, the jury is still out on Reddit's ability to be a meaningful source of digital advertising ROI for brands. But as brands grapple with the risks of a digital advertising ecosystem increasingly dominated by two firms, a more brand-friendly Reddit might be worth a new look.

Patricio Robles

Published 30 June, 2017 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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BigWave Digital, Recruitment at BigWave Digital

Reddit is now the fourth most popular site in the U.S., attracting some 250m users a month and it may be possible.

5 months ago

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