Reddit gives the advertisers what they want: Easer buttons.
In some cases, thanks to the investment in campaign automation, the new advertising products and the White Glove Service for Top -Advertiser customers, Reddit achieved sales of 465 million US dollars in the second quarter, which increased by 84% compared to the previous year. Advertising corresponds to the vast majority of sales of $ 500 million for the quarter.
Reddit also increased its daily active users by 21% to 110.4 million. The average sales per user rose by 47% to $ 4.53.
Overall, the second quarter of Reddit has been the most profitable quarter of Reddit since his public last March, CEO Steve Huffman told investors on Thursday. As a result, his share price in trade with after-hours increased by about 16%.
What does Reddits explain impressive growth? According to COO Jen Wong, his reaction to advertisers calls for better use and more integrations in the display of third -party providers.
But while the advertising business is on Ascendent, Reddit is still working on a strategy to optimally use the generative AI deals, said Huffman.
New formats and functions
At least on the advertising message, Reddit's strategy is firmly established.
It has a thirty approach to ensure the success of the advertiser, said Wong: The performance of the performance through the campaign objectives, improving the usability of its display platform and offering unique ad formats. Reddit has made recent progress on all three fronts, she said.
In terms of adding a new advertisement inventory Hyped RedDITS, new dynamic product ads (DPAS), which are now made of beta tests. These shopping formats produce 2x higher average return for advertising expenses (ROAS) as the standard conversion campaigns, she said.
In performance, Wong pointed out “ongoing investments in our advertising models and formats” that drive “higher click and conversion volume”.
Subscribe to
Adexchanger daily
Let the summary of our editors deliver to your inbox every weekday.
For example, Redid's acquisition of the Creative Optimization Platform makes memorable AI in August Marken to optimize her campaigns, said Wong. And at the beginning of this week, Reddit presented automatic campaigns for brand awareness and reach, which should also be improved for marketer improvements, she said.
Reddit also emphasizes the integrations with AD-Tech by third-party providers in response to the demand for advertisers for greater interoperability with frequently used ad-tech solutions, said Wong.
Reddits Integration in Smartly.ios ad-automation platform, which was announced in May, is an example of these closer partnerships with third-party providers. The intelligent integration of smartly.
Reddit also introduced his Community Intelligence Engine in Cannes Lions, which is based on the pool of billions of human conversations on the platform to help marketers improve their advertising campaigns.
So far, the company has created two products with Community Intelligence. It now offers a listing tool with which the consumer mood of a brand is compared with its competitors by getting real conversations between redditors. Reddit also started so-called “conversation-related add-ons”, which requires positive feelings to a brand posted by redditors and adds these quotes to display ads. This new format delivers 10% higher click rate than conventional ads, said Wong.
The Conversion API (Capi) from Reddit also encourages performance advertising to increase the budgets. According to Wong, the income from CAPI-covered conversion campaigns triples in the second quarter in the second quarter.
New and old advertisers
All of these investments help Reddit to bring in new advertisers. It expanded its advertising base by more than 50%in the second quarter.
According to Wong, most of the sales of Reddit are still based on growth of existing customer budgets. For example, the company has created a global account team to help its larger advertisers scale through Reddit's global footprint.
There is still room to expand the relationships between Reddit's larger customers, added Wong. Reddit's direct sales will concentrate on including more brands from larger customer portfolios such as DTC holding company, she said.
And when it comes to promoting smaller and medium -sized advertisers, Wong said: “What you need is a very simple automation that provides the performance you need.” As the ad tech market consolidates, brands will hike their budgets on the platforms that can best deliver this automation and performance.
Reddid's platform is currently “semi-automatic,” she said, but “End-to-end automation is on our radar”.
Ki search and future growth
While Reddit investors can be encouraged in the advertising plan, the platform is also one of the largest beneficiaries of the rise in AI search thanks to its close partnership with Google and growing relationships with other AI companies.
Reddit is currently the most quoted source for AI models, said Huffman and quoted the latest data from profound.
“Reddit” also remains one of the most searched terms in Google's traditional search, said Huffman. “Anyone who uses Google will eventually land on Reddit,” he added.
Despite Reddit's Google partnership, Reddit is Reddit Like many websites less recommendations from Google Search as AI overview, the platform take over. “Google's traffic varies from week to week, but overall it was a headwind in the second quarter,” said Huffman in response to an investor question.
While traditional search evidence may be in decline in decline, Reddit is recorded an increasing introduction of its own AI-driven searches, Reddit answers, albeit by a very small basis. Reddit Answers increased his weekly users to six million in the second quarter in the second quarter. For comparison, Reddit's core search had 70 million weekly users in the second quarter.
Although Reddit has proven to be a valuable source of training for AI models, it does not seem to strive to organize its weight in dealing with AI companies. When asked by another investor, whether Reddit would consider the traffic guarantees for recommendations as part of his business with AI search partners, Huffman stormed.
“Everyone can see that Reddit data is extremely valuable, but we still learn how much people depend on our data and what they use for it,” he said. “We still have some time before we have to answer these questions how structures could look like in the future.”