• by Laurie Sullivan  @lauriesullivan, December 1, 2023

Reddit has turned the breadth and depth of conversations on its platform into a way to target ads to redditors as the company prepares for a rumored initial public offering.

While Conversation Placement launched in 2021, to help brands reach Reddit users where they engage most within a thread, the platform on Friday announced two new advertising formats.

Carousel Ads and Product Ads in Conversation Placement, an advertising option on Reddit that appears between the original post and the first comment in a conversation thread. It provides advertisers with a way to reach audiences in the moment among the hundreds of thousands of conversations that happen in Reddit communities daily.

Jim Squires, Reddit’s executive vice president of business marketing and growth, believes as the company scales its advertising business and invest in the Reddit community and ads business, it will improve the content around discussion between “real people.”

Earlier this week, Reddit went through a “branding refresh” as it tries to grow the number of users on its platform.

The company has been expanding internationally for three years. From January 1 through September 30, about 20% of Reddit's advertising revenue came from outside the United States, the company said.

Durgesh Kaushik joined Reddit last year as Reddit vice president of APAC and emerging markets growth, but was promoted to vice president of international growth to lead international expansion and strategy and scaling further user adoption across all of our core regions. 

Part of that expansion means expanding services. People come to Reddit for all types of information including recommendations for products and services.

Carousel Ads give brands the ability to serve up to six images or GIFs in the ad unit with clickable link to respective landing pages. Early tests show a 44% increase in click-through rate (CTR) compared with Reddit’s previous Carousel Ad format.

The company estimates that 94% of Reddit users have engaged with recommendation content in the last year, and 76% of redditors have used the platform for recommendations more than once a month. 

Product Ads launched earlier this year as a natural next step in the shopping journeys already happening on Reddit. Pairing this ad unit with the Conversation Placement allows brands to get in front of people when they are already in research mode, actively discussing with other users.

It also allows advertisers to get their relevant products and services in front of consumers who have landed in Reddit conversation threads directly from organic online searches.

Google is a major source of that traffic. Last year, people added Reddit to their Google searches more than 1.2 billion times, which took them directly into relevant Reddit conversations.

Conversation Placement has become one of the most popular placements among Reddit advertisers such as Amazon, Athleta, Toyota, and TAG Heuer. Recently, Reddit has seen more small and medium-sized businesses placing Conversation Placements to find new customers. Among them ZoomCare, UpLift Desk, Smoothie King, and Direxion.

For example, Direxion came to Reddit in 2022 to drive awareness across its audience, particularly in finance communities, and drive traffic back to its website.

The company used the new formats within Conversation Placement as part of early testing. The results drove click-through rates higher than previously captured on other platforms.