Reddit is taking what it describes as a “cautious approach” to increasing the amount of advertising on its platform, despite continuing to grow its advertising business and push further into the Australian market.
Speaking to B&T during a visit to Sydney this week, Reddit’s VP of global agency & partnerships, Sharb Farjami, said the platform’s ad load remains lower than other major platforms and that the company is “very, very cautious” about increasing it.
“Our ad load is definitely lower than other platforms, and we are very, very cautious about what we when we increase, and if we do,” Farjami said.
Shah was in Australia this week for his second visit to the market this year, meeting with clients, agencies and Reddit’s growing local team as the platform continues to invest in Australia.
He highlighted to B&T that Reddit’s advertising model is working to protect the user experience rather than simply maximise the amount of commercial content shown.
“Our users don’t dislike advertising; they dislike bad advertising,” Shah said. “We want our ads to be as contextually relevant, be it through formats or native interaction, as possible.”
Reddit’s senior agency development lead Tom Tilney said the platform’s approach is centred on making advertising useful within the conversations already happening across its communities.
“We want advertising on the platform to be a utility,” Tilney added.
That means formats such as Reddit’s Free-Form ads, which allow advertisers to use up to 40,000 characters, and Reminder Ads designed around specific conversations or events.
Tilney said the Free-Form format has become particularly useful for categories where consumers are looking for detailed information before making a decision.
“It is truly incredible in the fact that you can have up to 40,000 characters, and it is the ultimate storytelling format,” he said.
“If I think about brands in auto, in beauty, in power and utilities, they’re able to use this format to answer many a question from users, from specific communities and subreddits.”
The platform is also increasingly positioning its first-party conversation data and communities as an advertising proposition, with Tilney arguing that Reddit captures explicit signals of consumer intent rather than having to infer them.
“People are coming to the platform saying, I want information about this. I want to share my thoughts about that,” he said.
“And that opens up that direct opportunity for an advertiser to become a part of that conversation in a very contextual way.”
Shah said that distinction is becoming more valuable as consumers navigate an increasingly AI-driven internet.
“You want a human touch, right? You want a human point of view, you want human validation, you want a trusted lived experience perspective,” he said.
“And in the kind of AI era that we’re in, I think the currency and the value of that only increases.”
Reddit said more than half of Australian Reddit users are looking for new brands or considering a purchase, while globally 40 per cent of conversations on the platform are commercial in nature.
Tilney said that commercial behaviour is translating into deeper relationships with Australian advertisers, with brands increasingly using Reddit across multiple stages of their campaigns rather than for a single part of the funnel.
“We’ve certainly seen brands advertising locally that have then expanded to advertise globally from Australia,” he said. “And then in terms of local results, it’s simply resulted in them not just using one part of the funnel, but starting to use Reddit right the way across upper, middle, and lower funnel.”
“So we’ve become a more critical part of their planning mix.”
Which brands are seeing success from Reddit’s ad platform?
Tilney mentioned Optus and health insurer ahm as local brands doing more work with Reddit, alongside Kia’s Australian launch of the Tasman.
He said said the car brand used Reddit’s Free-Form format as part of its Tasman launch, with the campaign “well and truly” outperforming benchmark.
The platform is also pitching its ability to harness organic community conversations as part of its advertising proposition. Tilney said products such as Redditor Highlights can surface comments and social proof from Reddit communities within advertising, allowing brands to incorporate the kinds of product conversations consumers are already having on the platform.
But the company is simultaneously trying to avoid turning those communities into another advertising-heavy feed.
When B&T asked whether Reddit would ever increase its ad load, Shah said: “That would be a larger corporate discussion and decision. Every platform is always balancing what is the right amount of advertising versus the right amount of non-advertising content.”
“I feel really proud of the job that we do. We are very, very intentional about it, and I think you see that in our numbers.”
Shah said the company’s approach was ultimately about protecting the relationship between users and the platform.
“I think ensuring that our ads are appearing in the right contextual environment and adding value from a utility perspective, and making sure that the balance of the content is right is, you know, we get pretty strong signals if it’s not working,” he said.
“I feel pretty good about where it’s at right now.”
The cautious approach comes as Reddit continues to build out its Australian operation. Shah said the local team is now three times the size it was a year ago, with the company continuing to invest in the market.
“This is my second trip this year,” Shah said.“As we grow, as we expand, it’s really, really, really important that in all of our markets, especially like a top-five market like Australia, that we grow in a responsible manner.”
“You need to listen to the market. You need to spend time with customers, you need to spend time with clients, you need to spend time with agencies.”
Tilney said Reddit is also working to convince advertisers that Reddit can play a role regardless of their category or campaign objective.
“The biggest kind of misconception and misunderstanding that we would have with any prospective commercial partners, clients, agencies is that your brand shouldn’t be on Reddit, or your brand doesn’t belong on Reddit,” he said. “And that’s just simply not the case.”
“There is a place for every single brand on Reddit. There’s a place for every part of the funnel, every single brand, every single category.”
Shah said Reddit’s challenge as an advertising business was therefore not necessarily to fill more of the platform with ads, but to make the ads that do appear useful to the people encountering them.
“The right message in the right place to the right audience adds value,” he said. “We just have to make sure that we do as good a job as possible for it.”
