In an effort to establish itself as a prominent destination for performance advertising, Reddit has unveiled two new ad tools: Contextual Keyword Targeting and Product Ads. While the platform has not explicitly stated its intentions, these products are designed to entice advertisers to allocate their ad budgets to Reddit. However, the response from advertisers has been mixed, with some expressing intrigue and others remaining skeptical.

The introduction of Contextual Keyword Targeting allows advertisers to select specific keywords to associate with their brand or align keywords with their ad copy for increased relevance. This feature aims to improve ad targeting on Reddit, an area where the platform has lagged behind competitors like Facebook and Google.

Lanie Shalek, the director of growth marketing at Jobi Capital, believes that these new formats could address Reddit’s limitations and make it a more appealing platform for performance advertising, potentially offering better targeting options and improved return on investment (ROI). However, there are challenges that Reddit must overcome to compete for performance dollars.

Alex Hamilton, head of innovation at Dentsu Creative, points out that Reddit needs to educate brands and agencies about how the platform operates and why they should allocate their ad spend to these new solutions. Many businesses still view Reddit as relatively unknown compared to more established social media platforms like Facebook and Instagram, which are perceived as safer bets due to their broad demographic coverage.

While some advertisers are interested in trying out the new ad formats, there is a need for Reddit to prove its value proposition and demonstrate its unique advantages compared to other platforms. Karim Salama, founder of web and digital marketing agency e-innovate, mentions that only about 20% of his clients are currently on Reddit, highlighting the reservations among the remaining 80% about the platform’s potential to deliver results.

Furthermore, Brian Chevalier-Jordan, CMO at National Business Capital, believes that while the new ad formats may bring marginal improvements, Reddit is unlikely to challenge the dominance of Google, Facebook, or TikTok without additional targeting capabilities that can avoid alienating the audience. Integrating these new ad formats seamlessly into the user experience presents another challenge for Reddit. The platform has a strong anti-advertising sentiment, and ensuring that ads blend well with the user interface and do not disrupt the overall experience is crucial. While Reddit is known for its highly engaged user base, using the platform as a shopping platform might not feel intuitive for Redditors. In addition, Reddit’s recent blackout, during which some marketers paused their advertising, has overshadowed the launch of these new ad products. This incident highlighted the loyalty and dedication of Redditors to their platform and their desire to see it run in the best possible way.

Overall, the introduction of these new ad formats marks a positive step forward for Reddit as it strengthens its advertising platform and social commerce business. However, Reddit still has ground to cover as it plays catch-up with platforms that have offered similar formats for a while. It needs to continue building its identity in the social space and convince clients to invest consistently in highly engaged communities.

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