• by Laurie Sullivan  @lauriesullivan, August 1, 2024

Ad companies are buying up AI startups, and Reddit has become the latest to announce Thursday its acquisition of Memorable AI, a creative intelligence platform that uses AI to help marketers improve performance.

It is Reddit’s first acquisition since going public in March.

Reddit has been working during the past two years to integrate machine learning and generative AI (GAI) technologies into its advertising capabilities to drive more compelling experiences for users, and augment results for advertisers.

Generative AI (GAI) has become indispensable to the advertising industry, providing support for all types of services, from understanding consumer behavior to improve ad targeting while adhering to privacy standards, to optimizing and buying media across channels. It also helps with creative optimization, as well as predictive analytics.

Camilo Fosco, Memorable AI co-founder and CTO, holds a PhD from MIT where he researched human cognitive processes and machine leaning, which is likely why the company trains its models on millions of human reactions to ads and creative assets. It supports clients such as Unilever, L'Oréal, Hellmann's, and NotCo.

Fosco will join Reddit as senior group product manager. He has been the most visible executive at the company, co-founding Memorable AI with CEO Sebastian Acevedo, who joins Reddit as Senior ML Engineering Manager. 

Memorable AI’s website stated it generated more than $1 million in revenue in 2023. The company has raised $2.75 million in funding from Aperiam Ventures, Bertelsmann Digital Media Investments, LDV Capital, and individual investors such as 3C Ventures' Michael Kassan and Scope3 CEO Brian O'Kelley.

Reddit's acquisition of Memorable AI gives advertisers tools that enhance campaign planning to drive higher performance and return on ad spend. It is powered by a large AI foundation model that allows advertisers to strategize ad creative according to their branding and conversion goals via an AI-based co-pilot, and trained with machine learning (ML) techniques and a dataset spanning media metrics and cognitive impact.

Through cognitive science, this foundation model understands human perception and respond to visual content. It has reached the deepest understanding of the interplay between ad creative and media impact, and can provide actionable estimates of the impact of ad creatives across click-through, engagement, and view-through rates, as well as brand lift and conversion rates.

Reddit is heavily invested in AI and advertising. Based on Memorable AI’s annual revenue, the purchase prices was likely between $10 million and $50 million, according to Gemini, Google’s AI search platform.

Based on Memorable AI’s focus, Gemini predicts potential future developments from this acquisition such as enhanced ad creation, improved ad targeting, personalized ads, and improved creativity.

The three most notable possibilities point to video ad generation, real time optimization, and the ability for Reddit to expand advertising to other platforms.