On a visitor perspective, this seems undervalued. This is a 50% or more discount to the market-cap/unique visitor ratio of Twitter, Snap, and Facebook.[1] And all the stats I've seen indicate much higher user engagement and time on site for Reddit compared to the other social platforms.
The biggest issue is of course that their monetization is horrible. Like 95% lower per user than the other socials.[2] So the real question an investor should ask is whether this is fixable? Or is there something intrinsic to Reddit traffic that makes it difficult to monetize? Either way, Reddit should be throwing an insane amount of money and equity to get a Sheryl Sandberg like executive with a track record of juicing monetization.
One thing that they do not seem to be taking advantage of is how specialized many of their communities are. It seems primed for letting advertisers target to specific audiences, but as a user I don't really feel like the ads I get are targeted to what I read at all? Maybe I am uninformed but it seems like an advertising goldmine that hasn't been taken advantage of.
If you are a PC components retailer, users of /r/buildapc seems like an ideal audience to target for advertising. Camera retailer, where better than /r/photography? Cookware - advertise in /r/cooking. Repeat ad infinitum across every niche interest on the site.
They should be able to enable advertisers to do really effective targeting of campaigns. Is this not possible with their current ad tools, or are they not selling the capabilities to advertisers well enough? Or is there not actually that much money in targeted ads, is all the money in generic ads like Coca-Cola & cars?
I tried to advertise a product to a very niche group on reddit. I just wanted to select 4 specific sub-reddits and advertise to anyone that was a member or viewed that reddit.
For some reason, reddit wouldn't let me advertise to 3 of the 4, and the 1 that they did let me advertise was very low volume (less than 100 members). I couldn't even get reddit to show a single ad, let alone have anyone click on it.
Facebook brought in way more traffic, and some of it did convert, but I feel like my advertising costs were too high there, since you can only specify more general interests. It seems like reddit, had their advertising platform actually worked, would have been the perfect place for me.
I wanted to run Reddit ads after to target users of a certain game after a big expansion launch. My site had a bunch of time-sensitive information that 1) was useful to the users of a specific subreddit, 2) would be useful for a week or so after the launch, 3) while it had a successful submission, I wanted to promote that submission for about a week afterwards to more people could see it.
I put up a reddit ad for that submission and Reddit took 4 weeks to approve it. At that point, there was no point running the ad anymore.
Another time I wanted to advertise to a new game that had a brand new subreddit to match but it was huge - 100k plus users in a week. Reddit simply wouldn't permit me to advertise to it because it was new.
In my (limited) experience it feels like Reddit isn't making the money it could be because it doesn't want to.
Reddit should charge for all commercial posts. It would clean up spam and generate revenue.
Make a special class of commercial account, include some 'verification' badge thingy. Let subreddits ban all commercial content, unpaid commercial content, or leave open (for commercial-specific subs).
Let mods profit share in commercial posts. (And fix the moderator system so "first to register controls the sub" is no longer the case)
If you will suffer a brief crash course on ad terminology, you are describing "placements".
A placement with an ad in it shown to a user is called an "impression".
I agree that advertisers would pay reddit more for better ad space (also called "inventory") but that doesn't just happen automatically.
Right now, I would assume they are integrating with some third party ad network and probably use fairly generic targeting information.
The cost in time and money to either deepen that integration or rip it out and make a custom ad network is probably significant.
Unfortunately I think the core audience of Reddit is probably somewhat well informed and probably running an ad block. I’d love to see the percentages.
It makes total sense to be able to target communities and I think they need to just stick a banner on the right hand side and be done with it. Let moderators maybe even take a small cut in exchange for providing info and meta data on their community.
I just checked /r/linux, which I browse on occasion, and the three sponsored posts I saw on the front page were for Intel vPro, Adobe Creative Cloud, and Google Chromebooks. Those all seem at least reasonably relevant.
I think the problem is that reddit culture is virulently anti-consumerist and throw a fit every time they see an ad. I'll bet they get terrible conversion rates.
> One thing that they do not seem to be taking advantage of is how specialized many of their communities are.
Their default subs are utter crap and full of influence campaigns accounts; in addition to being nearly impossible to post to without punished in some way.
bundle that with a profile that easily identifies cross markets by other interests too. you get to double dip.
millions of targetable demographic profiles all self sorted and prepackaged for whomever.
You asked if there was "something intrinsic to Reddit traffic that makes it difficult to monetize?" and the answer is: Yes, they're far less invasive than the other platforms you mentioned.
Just at a very high level:
- no offsite tracking (so no retargeting - the follow you around the internet ads)
- no separate ad network (you can't buy ads on Reddit that show up on 3rd party sites)
- limits on how granular targeting can be (it's by sub-reddit but they exclude many based on size+sensitivity)
- no demographic targeting (you can't pitch your product to males 18-35)
- no fine grained geographic targeting (lowest they go is major metro areas of millions of people)
Reddit has had off site tracking for quite some time.
Remember those little snooheads where you could 'reblog' about something? or vote on a site while on it?
Seeing the reddit bugs/icons/badges was about when the site started engaging in data collection. You bet your ass they do everything they can to determine a general profile of each user now based on visited subs and patterns.
And now they're taking huge amounts of money, which means they need to succeed as an advertising company, which means they'll start doing many of those things.
Reddit userbase is way more hostile to ads on average, more block ads, a lot of the content is non-advertiser friendly, they have less information on their audience for targeting, etc.
Reddit is more forum than social network, they'll need to get creative to make more revenue from users. Winning strategy for them might be to try and get more older users who don't care about ads so much and have lots of money
>Winning strategy for them might be to try and get more older users who don't care about ads so much and have lots of money
Isn't the most sought-after demographic 18-35 because they have the most disposable income? Afterwards disposable income drops off because of kids and/or retirement.
>Or is there something intrinsic to Reddit traffic that makes it difficult to monetize?
Reddit is also home to an enormous amount of porn and nsfw content in general which probably hurts this. They only just started preventing sexually explicit subreddits/content from appearing on r/all six months ago[0]
That was when I left Reddit. I felt like censoring from r/all is not what I want from r/all. To me that means every subreddit except quarantined subreddits. Once they started down that road I took off and haven’t been back.
to me, this seems like an opportunity for new advertisers that don't care about "their brand showing up next to porn"
is there a market rational reason why this hasn't occurred, or are the primary places that happen to also have adult content just assuming advertisers won't use their platform
sure, big fortune 500 ad spends are lucrative, but so is the aggregate of every single half baked idea that has to test the waters with targeted ads
Frustratingly they do this while continuing to not invest into their app - they might have an easier time attracting users if their app didn't break half of their site functions.
It's already happening with the profile pages being implemented.
I liked it around 2008 because it did not have profile pages and a fairly simple, straightforward interface and did not attempt to couple one's real life identity to one's post and encouraged throwaway accounts by allowing users to sign up without providing an email address.
Much of that is changing, and I also find that websites that encourage a link with one's real life identity tend to have an ever more annoying culture.
It also feels like more excessive Americana as time goes on. It did not seem like idiosyncractic U.S.A. social issues were as common in 2008, as well as the typical user that assumes every other user is from the U.S.A..
Reddit is one of the sites I use the most. I hope they can figure out a financially sustainable model without becoming obnoxious or, eventually, being bought up by a private equity firm.
I don't think Reddit will ever scale as well as something like Facebook . The bigger Reddit gets, the less usable it becomes due to subs becoming too crowded.
The whole point of reddit is that the crowding issue is self-correcting -- you just move to a new sub. I like to envision it as a malthusian catastrophe -- as the population starts reaching capacity limits, people start grumbling more and more.. until suddenly they far overshoot the capacity, and leave en-masse to new subs. In one fell swoop, the original sub is left near-empty, and out of the many new subs created in that instant, a few survive with healthy populations.
The long-tail subs will never get too crowded. If you have found a niche where like-minded people hang out, there will never be a whole lot more of them, and however many more there are, it's a positive.
Reddit currently supports many third party freemium clients ( Ala Twitter 2012). These third party apps offer a no ad experience too. Unsure how much revenue reddit shares with these apps though.
It helps with growth(more options for users to be on reddit) , but definitely hurts ad inventory, ad targeting insights etc.
I think this is likely why Reddit has heavily pushed direct revenue with an expansion of awards available (cheapest ones are 50 coins now), in addition to the continued ad-free option with a premium subscription.
>Either way, Reddit should be throwing an insane amount of money and equity to get a Sheryl Sandberg like executive with a track record of juicing monetization.
You mean that they should spend as much money as they can on ruining Reddit.
And of course the site will just get worse and worse, but continue onward, because its value is in the audience, and it takes a lot to screw up that momentum.
(What a blessing that HN isn't run to make a profit.)
> This is a 50% or more discount to the market-cap/unique visitor ratio of Twitter, Snap, and Facebook.[1] And all the stats I've seen indicate much higher user engagement and time on site for Reddit compared to the other social platforms.
Most people have one Snap / FB account and one, maximum two Twitter accounts... but throwaways are the norm on Reddit (as well as HN), which means Reddit's user count is inflated by quite a bit. Additionally, Reddit has large nsfw communities that draw lots of members and visitors (again, most with separate accounts!), and these can't be reasonably monetized at all.
Your comments make perfect sense in light of the fact that Reddit is the world's largest free porn site, with just enough "social" sprinkled on top to keep you engaged between wanks.
The only information I could find claims that about 22% of reddit is NSFW. They calculated the percentage of NSFW subreddits with >100k subscribers. [1]
That's far from a perfect way to measure this, but it's around the statistic that 30% of the internet is porn. My intuition tells me Reddit probably reflects the internet as a whole pretty well.
digg died fifteen years ago. clearly a lot has changed, and the mistakes that killed digg have not been made.
and i think reddit is beyond the point at which a digg-style fuckup could kill them. at worst you might see cadres of ideological users depart for something like lemmy, which is already happening to an extent, but there is a lot of space to flee internally, so most users don't feel the pressure. and diffusion to federated media is in the future for every mass audience. reddit has such a huge and active userbase it will dominate for the foreseeable future.
Digg closed before it was defeated really. I can't remember if it was the v3 or v4 that caused the migration but they didn't even try to roll back... or just stick with their new plan. They just gave up it seems.
Perhaps traffic has a reciprocal relationship with monetization and until Reddits management are ready to bite the bullet there is a tendency to focus on vanity metrics such as traffic rather than $.
One of the main reasons their monetization is so bad is that their mobile app is terrible.
Mobile Apps are important for monetization because they are much less vulnerable to ad blockers, people are used to ads taking up more of the screen in scrollable content and in most cases carry more traffic than desktop versions.
I think the disastrous experience buying and targeting ads is bad too, but the lack of a decent mobile app is a huge factor.
Can't tailor ads? Loose concept of user identity? I would think having a list of every subreddit a user subscribes to would give you a good indication of what interests they have! But from reading this thread it sounds like Reddit makes it difficult to choose which subreddits you want to advertise to.
> On a visitor perspective, this seems undervalued.
Cause they’re always one drama away from losing tons of people. The platform seems to attract drama involving the platform and decisions made more than say Twitter does
I suspect (without proof) that Reddit's unique user count is far smaller than its actual user count. People proudly use multiple alts and such behaviour is tacitly encouraged by the platform. It's not at all unusual for a user to have alts for gaming, porn and other things. Obvious this phenomenon exists on other platforms but my gut tells me it's far more prevalent on Reddit.
As someone who tried to advertise on reddit (though it was > 1-2 years ago, so things may have changed)-- Reddit, along with Twitter, is very advertiser unfriendly. And Im not just talking about the users.
I literally couldnt give them my money. I wanted to target a specific subreddit, but couldnt buy any impressions on it for 3 months. The app kept forcing me to advertise on /all, or all technology reddits, which wasnt what I wanted. I did buy $10 of ads, got zero clicks, surprise surprise.
The thing was hard to setup, hard to run, hard to measure, not to mention, advertisers get treated like any other account. I was shadow banned because I was linking to one domain, and reddit considered me a spammer. But I was like, that *is* the whole purpose of advertising. I was forced to post a few cat pictures, just so I could run my ads.
Never again.
I note they have since revamped their ad site-- now there is a new site, but you have to reregister to run ads, and I dont want the hassle.
Yes, everyone hates ads, but thats how free sites make money.
Some redditors were hostile to ads, but the number isnt that big. Most users were indifferent.
Such an ad-hostile company, I wonder how they make money.
I tried it recently (< 2 months ago) and the experience wasn't too bad. This was the first real ad "campaign" I had ever set up. The targeted group was pretty niche and while Reddit suggested going broader, I was able to stick with the subreddits that I considered relevant.
The most annoying part was the rather opaque period between launching, approving, and actually running the ad. The first real confirmation I had that things were working was a bill.
>Yes, everyone hates ads, but thats how free sites make money.
Maybe a simple user forum site doesn't need to make mega valuation levels of money. Maybe it, and other low effort sites like Facecrook and Twatter, should be run as public benefit corps. These companies aren't selling state of the art tech here - why do they need to be such money makers??
> These companies aren't selling state of the art tech here - why do they need to be such money makers??
You’re thinking of the user facing element as being the thing they’re selling. That’s not what they’re selling. They give that away for free so they can sell extremely sophisticated data and targeting. You’re the product they’re selling. And the access is definitely cutting edge.
Similar with me. Also like you this was over 2 years ago.
I looked to advertise on Google, Facebook, Twitter, and Reddit.
Facebook didn't seem interested in SMBs and I didn't even advertise on them, it seemed very complex just to run a simple ad.
Twitter didn't deliver good value per click etc., but I did get good demographic information on who was and wasn't interested.
Google was the best value, especially if you look for bargains where one group of customers is cheap.
Reddit had no offerings in the way Google had, or even Twitter had. IIRC I bailed on advertising with them at all. With Facebook it was just too complex for a simple ad, with Reddit it didn't even seem they were offering anything near what I wanted.
Something that hasn’t been brought up in this thread is the massive problem Reddit has regarding large scale bot networks.
Reddit allows for unlimited account creation and has extremely poor, if any, detection algorithms. Additionally, its trivial to stream and analyze the entirety of Reddit comments and posts in real time (check out PRAW if you like Python).
Networks pushing COVID narratives and crypto frauds are probably the worst offenders. Here’s an example I just came across in /r/miami: https://reddit.com/r/Miami/comments/p1z6a7/have_you_guys_see.... The networks pushing certain COVID narratives are evening more troubling as, unlike crypto, im not sure what the end game is or who is controlling those networks.
> Something that hasn’t been brought up in this thread is the massive problem Reddit has regarding large scale bot networks.
Well rest assured, Reddit administration does not see this as a problem at all. It's one of the ways marketing companies advertise on Reddit. There's a reason the moderators of /r/all subreddits tend to all moderate the same group of subreddits, and that they all often have super human posting frequencies. These are shared accounts for ad firms. This was discussed on HN before: https://news.ycombinator.com/item?id=23173018
I've come across crypto pumps on Reddit, but might not be on the right subs to have come across the network posts (or just haven't noticed yet). Do you have some links to those posts?
I wouldn't say this isn't a problem at all but the fact that subs have mods which have a lot of power seems to be very effective.
I don't spend that much time on reddit as a whole - but frequent about 5-7 subs every single day. These are mostly medium sized subs and none of them have a problem of spam. And I'm on them enough that it is by far the social media/news site I interact with the most.
> Reddit allows for unlimited account creation and has extremely poor, if any, detection algorithms.
Why don't they put some CAPTCHAs? They have no CAPTCHAs anywhere in account creation + post first time comment + first time thread + first time direct message?
Reddit is on its way down. It's been overrun by power-tripping mods, and there's no way to appeal a perma-ban!
I've been banned from /r/india for just commenting on another sub (/r/chodi, which was recommended by the app itself!); banned from /r/worldnews for disagreeing with the herd.
The moment a decent, democratic discussion forum comes along, I'll jump ship to it.
"Stop using the website in the way it was intended; you must learn the bias of each subs or get banned. And by the way criticizing the bias of mods will also get you banned"
But the fucking sub was recommended to me on the app! I clicked, went in there, posted a comment or two to enlighten people, and bam! Banned from /r/india! W.T.F.!!
ArtisanVideos used to be my favorite until the mod unfairly banned me.
It took me a while just to figure out that I was banned. When I inquired, it was because because I posted videos that are spammy advertising, which couldn't be further from the truth.
Based on the response, it was clear that I was not dealing with someone in normal state so I just wrote it off as lost cause and stopped visiting.
I had already thought the sub was on decline due to aggressive and unnecessary policing, because despite its huge membership, the content has become very stagnant.
It's a shame because I've been on reddit for 10 years and I joined it the sub since its inception.
So here's a conundrum. People like free discourse, but they also like quality content. Having a quality content safe haven usually involves some tyrannical or mob rule filtering mechanism in the form of weird idiosyncratic rules and policing + banning of offbeat posters. This same filtering mechanism is anti-free discourse. Is there a successful implementation that maximizes free discourse and quality content simultaneously(IE preventing spam, shallow comments, & offtopic stuff which inundate a forum turning it into a maze to find the good stuff) without the bad modding?
Many forums once they reach critical mass even if they aren't heavy handed with policing still have an unsavory softhanded stiff-arming mechanism that's rife with bad [mod/mob] judgement, IE push everything not condoned by the mods or mobs into the place where few read. I'm sorry what I'm trying to describe is hard to put a finger on, but after being on reddit for 10 or more years yah notice some strange consistent peculiarities that are hard to put in words.
I'm a Danish guy who has never posted anything on r/India but I was banned from both r/worldnews and r/India for calling out the racism against Indians on r/worldnews.
What do you mean by democratic? Are you thinking of some kind of election system to replace mods, and if so have you seen such a mechanism work anywhere else on forums?
Give people votes proportional to the karma in that sub.
Also, make it hard to perma-ban someone with over 100K karma points, especially in regional subs (like /r/india, etc.); you can change your interests, but you can't really change where you are from. If nothing else, force the mods to actually justify bans; and one subjective offense should not be enough to ban someone.
Reddit seems to me like a very hard product to monetize. As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers. Combine that with the low friction of sign up (disposable e-mails allowed, no confirmation needed, sitewide bans rare) and the tacit allowance of "objectionable" content (porn, gore, hate speech, harassment, etc.)... you don't really have fertile ground for meaningful engagement from an advertiser perspective.
Not only that, but if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host. There have been stories about certain communities being exiled from Reddit only to spring up just as quickly elsewhere with more or less the same exact user experience...
But every time you take more money you have to make more money. It’s like they’re trying to give themselves permission to do things they haven’t dared to do so far.
> if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host
this seems doubtful to me. Reddit has tons of legendary threads, AMAs and is its own library of content at this point, similar to YouTube. Sure the tech could be replicated but the value is all in the content it generated.
> As a daily user I get a ton of milage out of Reddit Enhancement Suite (desktop) and Apollo (iOS), in combination with typical ad-blockers.
Most users aren't going to do this. Really, the reddit folks should just go all-in on tailoring their official apps towards the most casual, highly "engaged" content consumers, and target most of their monetization towards that kind of user. As a bonus, make it trivially easy to post casual content directly from the app. Who cares about "objectionable" content when they'll have so many cat pictures and cute/funny memes to run their ads next to.
FYI you can actually still create a new reddit account without giving any email address (not even a disposable or fake one). Just leave the email text box blank and click "next".
The cost is fascinating. Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web? For users, there's a high discovery value... but at the cost of apparently far more expense running the site than has been able to be recouped yet.
Curious to see that even where centralization hasn't financially paid off, people are willing to keep tossing money at the dream of it paying off one day after 16 years.
> Is the value of a single place for all these conversations that much higher than having a bunch of independent forums scattered across the web?
The problem with "independent forums scattered across the web" is that they make discovery (of users and service instances) harder. There are ways around this, like the Fediverse and SOLID standards, but most bulletin-board-like forums do not support them as of yet out of the box.
Reddit should just shift to a paid model where there are no adds across the entire site and the subs you sub to get a portion of your revenue to manage the sub.
It is strange. The obvious solution to Reddit's revenue problem was to build a marketplace into the foundation of the network, and they should have done that more than a decade ago.
Etsy, eBay, FB Market, Craigslist, Fiverr, OnlyFans (which was built-up by riding on social media propagation, taking advantage of services like Reddit), and 400 other various types of online markets. There's no reason Reddit could not have have built something substantial in the ecommerce platform space over the years. Taking a small cut from transactions would have eliminated their advertising dependency. Reddit's karma also lends itself easily to forming an ecommerce trust network via transaction feedback, which would form the backbone of buying and selling products or services on there. Reddit figured out to absorb image hosting away from eg Imgur (which also piggybacked off of Reddit to then form a competing social network), and they didn't figure out to do the same thing in the ecommerce space, despite how obvious it was.
Reddit even has communities where sales are made like r/MechanicalKeyboards and those communities use karma and transaction tracking to rank sellers - the communities have done the proof of concept for them.
Now that they are setting up Cryptocurrencies in some subreddits (donuts in r/ethtrader and a couple of others that I don't recall right now) they should experiment with reddits where you initially "pay" for posting, commenting, up/down voting. Then somehow if your post gets upvoted or is heavily commented on, you get some of those tokens (shared revenue) as well as moderators in the subreddits that adopt that dynamic.
It's akin to the "payment per Email" (hashcash as spam prevention) idea that a lot of us have yearned for a long time, which would deter spammers and make people think twice before commenting, so maybe it would increase the content quality.
Well it's been multiple years and hn still needs multiple pages, ironic considering they claim to deal with the best people in tech. So I guess things take time?
Reddit's user base is poor and disaffected young men. Those might be valuable eyeballs to a warlord or a revolutionary but corporate America isn't buying.
All you need is an imagination. Paid only-fans links for example would be a huge winner when targeted at virgin men in their 20s with no real life friends (AKA Reddit userbase). These subtle advertisements are already happening all over Reddit through user posts, it's just Reddit stupidly does not charge for it.
I used to have a similar impression. Gradually my view has changed. I now see it as one of the best sources of information on the internet on specific topics.
Reddit is a marketeers dream. Every corporation, product, game, movie studio and consumer device has a big team dedicated to using Reddit for free. Submissions memes and comments are posted by the teams, often out in the open. Reddit gets no income from this advertising.
If Reddit were to start looking at charging for these, the platform might change drastically. I'm not sure how, however.
Reddit is already packed to the brim with product shilling and yet it keeps getting bigger. I doubt the majority of users will be turned off from this. The reddit user base has changed as well. Most users of reddit probably never used the old design at this point.
the mods are even worse than admins in many respects. mods for popular subs have considerable control over what is allowed or not. Many subs have enormous blacklists of users,domains,and even words. As well as stupid, arbitrary content guidelines pertaining to length, the title, the body, and other stuff. Reddit admins have the most power but they tend to not get involved unless a sitewide rule is broken.
I've been permanently banned from almost all of the top COVID related subs for daring to discuss disallowed topics, like the Wuhan lab, as well as expressing anti-lockdown sentiments. My appeals have been instantly denied as well.
I understand the idea that subreddits are user-run communities and should be able to self-moderate, but there are a couple problems with this:
1. Reddit claims to be the "front page of the internet" and promotes many of these top subreddits with front-page rankings, user suggestions, and push notifications. Therefore, reddit mods have immense power in controlling the flow of information to those who believe they're interacting with a reputable source, and Reddit corporate has washed their hands of any responsibility to have a say in this, despite the profit they receive from it.
2. Reddit corporate certainly is willing to get involved with subreddits, by banning or quarantining certain subs for spreading "misinformation", but this seems selectively applied to one particular side of these issues. Anti-lockdown subreddits are banned for downplaying Covid, but major Covid subreddits openly feature fear-mongering posts that overplay, say, the risk of the virus to kids. Both are misinformation, but one is allowed and and the other is banned.
Funny enough paying for professional moderation will actually help Reddit. The quality of almost every major subreddit is trash due to mods on a power trip (or paid by a third party to push an agenda).
It's not easy to run a company with as many users as they have.
As a mod, they've put a lot of work recently into flagging trolls and astroturf accounts, and still have a lot of work to do. I run r/sanfrancisco, and wow there's a ton of bots and trolls flooding our sub about the Newsom recall.
They also seem to really want to find a way to monetize content in a new way. They've flirted with crypto and awards, but I imagine they have strong ambitions around how they can reward creators and moderators in a healthy, non-ad-based-way. (Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone.)
Plus the usual suspects (infrastructure, traditional demand gen marketing, paid moderation, etc).
>Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone
The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience.
It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.
Reddit is the only website in the Alexa top 15 (US) that runs completely on the cloud. Everyone else has figured out datacenters save a bucket load of money.
Readit News
The biggest issue is of course that their monetization is horrible. Like 95% lower per user than the other socials.[2] So the real question an investor should ask is whether this is fixable? Or is there something intrinsic to Reddit traffic that makes it difficult to monetize? Either way, Reddit should be throwing an insane amount of money and equity to get a Sheryl Sandberg like executive with a track record of juicing monetization.
[1]https://www.theverge.com/2020/12/1/21754984/reddit-dau-daily... [2]https://www.cnbc.com/2019/02/11/reddit-users-are-the-least-v...
If you are a PC components retailer, users of /r/buildapc seems like an ideal audience to target for advertising. Camera retailer, where better than /r/photography? Cookware - advertise in /r/cooking. Repeat ad infinitum across every niche interest on the site.
They should be able to enable advertisers to do really effective targeting of campaigns. Is this not possible with their current ad tools, or are they not selling the capabilities to advertisers well enough? Or is there not actually that much money in targeted ads, is all the money in generic ads like Coca-Cola & cars?
For some reason, reddit wouldn't let me advertise to 3 of the 4, and the 1 that they did let me advertise was very low volume (less than 100 members). I couldn't even get reddit to show a single ad, let alone have anyone click on it.
Facebook brought in way more traffic, and some of it did convert, but I feel like my advertising costs were too high there, since you can only specify more general interests. It seems like reddit, had their advertising platform actually worked, would have been the perfect place for me.
I put up a reddit ad for that submission and Reddit took 4 weeks to approve it. At that point, there was no point running the ad anymore.
Another time I wanted to advertise to a new game that had a brand new subreddit to match but it was huge - 100k plus users in a week. Reddit simply wouldn't permit me to advertise to it because it was new.
In my (limited) experience it feels like Reddit isn't making the money it could be because it doesn't want to.
Make a special class of commercial account, include some 'verification' badge thingy. Let subreddits ban all commercial content, unpaid commercial content, or leave open (for commercial-specific subs).
Let mods profit share in commercial posts. (And fix the moderator system so "first to register controls the sub" is no longer the case)
People are going to those specialized communities to get real information from real users, not lies and misinformation (ads and marketing).
I agree that advertisers would pay reddit more for better ad space (also called "inventory") but that doesn't just happen automatically.
Right now, I would assume they are integrating with some third party ad network and probably use fairly generic targeting information. The cost in time and money to either deepen that integration or rip it out and make a custom ad network is probably significant.
It makes total sense to be able to target communities and I think they need to just stick a banner on the right hand side and be done with it. Let moderators maybe even take a small cut in exchange for providing info and meta data on their community.
It does seem like a huge missed opportunity.
Their default subs are utter crap and full of influence campaigns accounts; in addition to being nearly impossible to post to without punished in some way.
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Just at a very high level:
- no offsite tracking (so no retargeting - the follow you around the internet ads)
- no separate ad network (you can't buy ads on Reddit that show up on 3rd party sites)
- limits on how granular targeting can be (it's by sub-reddit but they exclude many based on size+sensitivity)
- no demographic targeting (you can't pitch your product to males 18-35)
- no fine grained geographic targeting (lowest they go is major metro areas of millions of people)
Remember those little snooheads where you could 'reblog' about something? or vote on a site while on it?
Seeing the reddit bugs/icons/badges was about when the site started engaging in data collection. You bet your ass they do everything they can to determine a general profile of each user now based on visited subs and patterns.
Reddit is more forum than social network, they'll need to get creative to make more revenue from users. Winning strategy for them might be to try and get more older users who don't care about ads so much and have lots of money
Isn't the most sought-after demographic 18-35 because they have the most disposable income? Afterwards disposable income drops off because of kids and/or retirement.
Won't be easy getting older users on a site where "boomer" is a slur.
Reddit is mostly cat pictures and funny memes at scale, even calling it a "forum" is a stretch. More like a glorified image board.
Reddit is also home to an enormous amount of porn and nsfw content in general which probably hurts this. They only just started preventing sexually explicit subreddits/content from appearing on r/all six months ago[0]
https://www.reddit.com/r/changelog/comments/lhnvok/removing_...
is there a market rational reason why this hasn't occurred, or are the primary places that happen to also have adult content just assuming advertisers won't use their platform
sure, big fortune 500 ad spends are lucrative, but so is the aggregate of every single half baked idea that has to test the waters with targeted ads
I liked it around 2008 because it did not have profile pages and a fairly simple, straightforward interface and did not attempt to couple one's real life identity to one's post and encouraged throwaway accounts by allowing users to sign up without providing an email address.
Much of that is changing, and I also find that websites that encourage a link with one's real life identity tend to have an ever more annoying culture.
It also feels like more excessive Americana as time goes on. It did not seem like idiosyncractic U.S.A. social issues were as common in 2008, as well as the typical user that assumes every other user is from the U.S.A..
I'm thinking vintageaudio, lv426, subs like that.
It helps with growth(more options for users to be on reddit) , but definitely hurts ad inventory, ad targeting insights etc.
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You mean that they should spend as much money as they can on ruining Reddit.
(What a blessing that HN isn't run to make a profit.)
Most people have one Snap / FB account and one, maximum two Twitter accounts... but throwaways are the norm on Reddit (as well as HN), which means Reddit's user count is inflated by quite a bit. Additionally, Reddit has large nsfw communities that draw lots of members and visitors (again, most with separate accounts!), and these can't be reasonably monetized at all.
It's the dark patterns and having to reload pages multiple times to finally see the content.
> and time on site
Again, break your site so addicts have to try harder to get their dopamine hit
The reddit "engagement" numbers are false.
That's far from a perfect way to measure this, but it's around the statistic that 30% of the internet is porn. My intuition tells me Reddit probably reflects the internet as a whole pretty well.
[1] https://www.reddit.com/r/dataisbeautiful/comments/f94j0y/oc_...
and i think reddit is beyond the point at which a digg-style fuckup could kill them. at worst you might see cadres of ideological users depart for something like lemmy, which is already happening to an extent, but there is a lot of space to flee internally, so most users don't feel the pressure. and diffusion to federated media is in the future for every mass audience. reddit has such a huge and active userbase it will dominate for the foreseeable future.
Mobile Apps are important for monetization because they are much less vulnerable to ad blockers, people are used to ads taking up more of the screen in scrollable content and in most cases carry more traffic than desktop versions.
I think the disastrous experience buying and targeting ads is bad too, but the lack of a decent mobile app is a huge factor.
- younger user base (so less disposable income)
- loose concept of user identity, so can't tailor ads
- more corpoarate and mainstream advertisers tend to stay away due to the nature of the community and content shared
- primary usage is on web rather than mobile apps
All of these are fixable, but the question is can they do so without alienating their use base.
By most, I mean the vast majority (hence my perplexion and need to comment and confirm my understanding)
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>The biggest issue is of course that their monetization is horrible.
It's possible that these two things are pretty tightly linked.
Cause they’re always one drama away from losing tons of people. The platform seems to attract drama involving the platform and decisions made more than say Twitter does
1) Valuing the company in the hopes of making a profit on the IPO 2) More conservative than public markets
This is correct but also bittersweet.
I literally couldnt give them my money. I wanted to target a specific subreddit, but couldnt buy any impressions on it for 3 months. The app kept forcing me to advertise on /all, or all technology reddits, which wasnt what I wanted. I did buy $10 of ads, got zero clicks, surprise surprise.
The thing was hard to setup, hard to run, hard to measure, not to mention, advertisers get treated like any other account. I was shadow banned because I was linking to one domain, and reddit considered me a spammer. But I was like, that *is* the whole purpose of advertising. I was forced to post a few cat pictures, just so I could run my ads.
Never again.
I note they have since revamped their ad site-- now there is a new site, but you have to reregister to run ads, and I dont want the hassle.
Yes, everyone hates ads, but thats how free sites make money.
Some redditors were hostile to ads, but the number isnt that big. Most users were indifferent.
Such an ad-hostile company, I wonder how they make money.
The most annoying part was the rather opaque period between launching, approving, and actually running the ad. The first real confirmation I had that things were working was a bill.
Maybe a simple user forum site doesn't need to make mega valuation levels of money. Maybe it, and other low effort sites like Facecrook and Twatter, should be run as public benefit corps. These companies aren't selling state of the art tech here - why do they need to be such money makers??
You’re thinking of the user facing element as being the thing they’re selling. That’s not what they’re selling. They give that away for free so they can sell extremely sophisticated data and targeting. You’re the product they’re selling. And the access is definitely cutting edge.
Because that's capitalism. Investors want "growth".
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I looked to advertise on Google, Facebook, Twitter, and Reddit.
Facebook didn't seem interested in SMBs and I didn't even advertise on them, it seemed very complex just to run a simple ad.
Twitter didn't deliver good value per click etc., but I did get good demographic information on who was and wasn't interested.
Google was the best value, especially if you look for bargains where one group of customers is cheap.
Reddit had no offerings in the way Google had, or even Twitter had. IIRC I bailed on advertising with them at all. With Facebook it was just too complex for a simple ad, with Reddit it didn't even seem they were offering anything near what I wanted.
Reddit allows for unlimited account creation and has extremely poor, if any, detection algorithms. Additionally, its trivial to stream and analyze the entirety of Reddit comments and posts in real time (check out PRAW if you like Python).
Networks pushing COVID narratives and crypto frauds are probably the worst offenders. Here’s an example I just came across in /r/miami: https://reddit.com/r/Miami/comments/p1z6a7/have_you_guys_see.... The networks pushing certain COVID narratives are evening more troubling as, unlike crypto, im not sure what the end game is or who is controlling those networks.
Well rest assured, Reddit administration does not see this as a problem at all. It's one of the ways marketing companies advertise on Reddit. There's a reason the moderators of /r/all subreddits tend to all moderate the same group of subreddits, and that they all often have super human posting frequencies. These are shared accounts for ad firms. This was discussed on HN before: https://news.ycombinator.com/item?id=23173018
I don't spend that much time on reddit as a whole - but frequent about 5-7 subs every single day. These are mostly medium sized subs and none of them have a problem of spam. And I'm on them enough that it is by far the social media/news site I interact with the most.
Why don't they put some CAPTCHAs? They have no CAPTCHAs anywhere in account creation + post first time comment + first time thread + first time direct message?
Chunks of it. Don’t think praw and the api can do all live
I've been banned from /r/india for just commenting on another sub (/r/chodi, which was recommended by the app itself!); banned from /r/worldnews for disagreeing with the herd.
The moment a decent, democratic discussion forum comes along, I'll jump ship to it.
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It took me a while just to figure out that I was banned. When I inquired, it was because because I posted videos that are spammy advertising, which couldn't be further from the truth.
Based on the response, it was clear that I was not dealing with someone in normal state so I just wrote it off as lost cause and stopped visiting.
I had already thought the sub was on decline due to aggressive and unnecessary policing, because despite its huge membership, the content has become very stagnant.
It's a shame because I've been on reddit for 10 years and I joined it the sub since its inception.
___
Looking at the sub now, it's clear that there was change in mod / ownership. https://www.reddit.com/r/ArtisanVideos/comments/oo7oxm/annou...
Quite unusual.
Many forums once they reach critical mass even if they aren't heavy handed with policing still have an unsavory softhanded stiff-arming mechanism that's rife with bad [mod/mob] judgement, IE push everything not condoned by the mods or mobs into the place where few read. I'm sorry what I'm trying to describe is hard to put a finger on, but after being on reddit for 10 or more years yah notice some strange consistent peculiarities that are hard to put in words.
Also, make it hard to perma-ban someone with over 100K karma points, especially in regional subs (like /r/india, etc.); you can change your interests, but you can't really change where you are from. If nothing else, force the mods to actually justify bans; and one subjective offense should not be enough to ban someone.
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Seems strange to me that a 16 year old company still isn't self sustaining.
Not only that, but if Reddit were to strongly disallow any or all of the above we have seen how EASY it is to simply clone the tech and re-host. There have been stories about certain communities being exiled from Reddit only to spring up just as quickly elsewhere with more or less the same exact user experience...
this seems doubtful to me. Reddit has tons of legendary threads, AMAs and is its own library of content at this point, similar to YouTube. Sure the tech could be replicated but the value is all in the content it generated.
Most users aren't going to do this. Really, the reddit folks should just go all-in on tailoring their official apps towards the most casual, highly "engaged" content consumers, and target most of their monetization towards that kind of user. As a bonus, make it trivially easy to post casual content directly from the app. Who cares about "objectionable" content when they'll have so many cat pictures and cute/funny memes to run their ads next to.
Curious to see that even where centralization hasn't financially paid off, people are willing to keep tossing money at the dream of it paying off one day after 16 years.
The problem with "independent forums scattered across the web" is that they make discovery (of users and service instances) harder. There are ways around this, like the Fediverse and SOLID standards, but most bulletin-board-like forums do not support them as of yet out of the box.
Etsy, eBay, FB Market, Craigslist, Fiverr, OnlyFans (which was built-up by riding on social media propagation, taking advantage of services like Reddit), and 400 other various types of online markets. There's no reason Reddit could not have have built something substantial in the ecommerce platform space over the years. Taking a small cut from transactions would have eliminated their advertising dependency. Reddit's karma also lends itself easily to forming an ecommerce trust network via transaction feedback, which would form the backbone of buying and selling products or services on there. Reddit figured out to absorb image hosting away from eg Imgur (which also piggybacked off of Reddit to then form a competing social network), and they didn't figure out to do the same thing in the ecommerce space, despite how obvious it was.
I love this.
It's akin to the "payment per Email" (hashcash as spam prevention) idea that a lot of us have yearned for a long time, which would deter spammers and make people think twice before commenting, so maybe it would increase the content quality.
It would be an interesting experiment.
Based on Reddit's own information, it would appear that they are.
Picking just one frontpage sub, /r/News, you can check the guilded page and see:
> gildings in this subreddit have paid for 142.83 years of server time
pics? 291.80 years.
funny? 364.09 years.
aww? 624.43 years.
askreddit? 724.03 years.
politics? 314.93 years.
That's 6 subs.
According to Reddit's own guildings report, 6 subs on Reddit have paid for a combined 2461.21 years worth of server time.
They're self sustaining. Reddit has bitten the 'growth at all costs' bug.
You're making a huge leap about profitability based on a fraction of their running costs.
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If Reddit were to start looking at charging for these, the platform might change drastically. I'm not sure how, however.
I understand the idea that subreddits are user-run communities and should be able to self-moderate, but there are a couple problems with this:
1. Reddit claims to be the "front page of the internet" and promotes many of these top subreddits with front-page rankings, user suggestions, and push notifications. Therefore, reddit mods have immense power in controlling the flow of information to those who believe they're interacting with a reputable source, and Reddit corporate has washed their hands of any responsibility to have a say in this, despite the profit they receive from it.
2. Reddit corporate certainly is willing to get involved with subreddits, by banning or quarantining certain subs for spreading "misinformation", but this seems selectively applied to one particular side of these issues. Anti-lockdown subreddits are banned for downplaying Covid, but major Covid subreddits openly feature fear-mongering posts that overplay, say, the risk of the virus to kids. Both are misinformation, but one is allowed and and the other is banned.
If you don't like how moderation done, go start your own reddit.
This is the most pathetic slam against mods I have ever seen and shows that you haven't spent two seconds considering what you're criticizing.
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As a mod, they've put a lot of work recently into flagging trolls and astroturf accounts, and still have a lot of work to do. I run r/sanfrancisco, and wow there's a ton of bots and trolls flooding our sub about the Newsom recall.
They also seem to really want to find a way to monetize content in a new way. They've flirted with crypto and awards, but I imagine they have strong ambitions around how they can reward creators and moderators in a healthy, non-ad-based-way. (Their ads are the worst of all the big social networks, given how anonymous their base is. So they're forced to innovate, which I think is good for everyone.)
Plus the usual suspects (infrastructure, traditional demand gen marketing, paid moderation, etc).
The oddity is that their user's aren't that anonymous -- in fact, they very directly tell reddit what their interests are. Like a trade magazine, reddit really doesn't have to do any analysis at all to figure out how to map ads to the right target audience.
It confounds me how they haven't managed to do a much better job of targeted advertising -- just showing woodworking tool ads on the woodworking sub would be a dramatic improvement over the current setup.
Reddit is the only website in the Alexa top 15 (US) that runs completely on the cloud. Everyone else has figured out datacenters save a bucket load of money.
The endless crime-posting is exhausting, it is rapidly turning into nextdoor.