Reddit Jumps Into Pay Per Click, Performance Advertising

Reddit built a strong foundation for advertisers based on engagement and brand awareness campaigns. Now the company will focus on performance advertising in a new bid type, pay-per-click advertising, which rolls out Wednesday.

Advertisers can access the new ad inventory in the Reddit Ads dashboard. The cost-per-click ad type will run across all platforms and devices as promoted posts.

The site previously offered Traffic and Conversions campaign objectives using a cost per 1,000 impression (CPM) bid type, but the launch of a dedicated bid type for traffic and conversion — CPC — is new.

The massive launch required quite a bit of backend technical work and communication with advertisers, but the ad type aims to help performance marketers achieve their goals more efficiently. Bidding per click should result in better ROI, as advertisers only pay when someone clicks on their ad, according to a Reddit spokesperson.

“Reddit began testing the CPC bid type in early November with more than 50 performance advertisers across a number of verticals including gaming, B2B and e-commerce,” the spokesperson said.

While the company declined to share the details of the CPC model, the spokesperson revealed that the ads on Reddit serve up to people based on interest targeting.

The platform is based on machine learning (ML) that estimates when clicks on ads will occur. ML helps Reddit “predict and bill on click behavior,” per the spokesperson.

Advertisers can choose relevant interests associated with their product and service, and Reddit will serve the ads to people who visit communities aligned with those interests.

Advertisers that want to run a campaign with a CPC bid can begin with a “Traffic” or “Conversions” objective, set their bid, select their targeting, and load their creative. 

The company now offers four campaign objectives — reach, video view, traffic and conversions — associated with a complete suite of bid types, such as CPM, CPV and CPC.

With the launch of CPC, advertisers can now more reliably achieve their direct-response objectives. 

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