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Reddit Tests Ads in Search Results as Search Traffic Declines
Reddit begins testing ads in its search results pages as its search traffic declines.
Key points
- Reddit says the ad test is an initial trial with a select group of eligible advertisers.
- Reddit's U.S. daily active users dropped from 53.2 million in Q2 to 50.7 million in Q3.
- Reddit's fourth-quarter guidance predicted sales of $1 billion to $1.03 billion, below expectations of $1.05 billion.
Why it matters. The ad test and planned logged-in shift are Reddit's effort to earn more revenue from existing users, as the company warned that daily active users could decline further if the trend continues.
On Tuesday, Reddit said it has begun testing ads in its search results pages, letting advertisers reach users as they search for products and recommendations. The company said the ads may appear based on contextual relevance to a search query, and the test is limited to a select group of eligible advertisers. Reddit's global daily active users were flat quarter-over-quarter in Q3 at 130.3 million, while U.S. daily active users fell from 53.2 million in Q2 to 50.7 million.
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Reddit Tests Ads in Search Results as Search Traffic Declines
Reddit said on Tuesday that it has begun testing ad placements in its search results pages. The test lets advertisers reach users as they search for products and recommendations. The company days earlier warned investors about declining search traffic and a weaker-than-expected revenue forecast. The company is looking for ways to earn more revenue from existing users as Google's AI search changes how people discover Reddit content.