The “meme stock” rally that sent shares of companies like GameStop and AMC Entertainment soaring earlier this year was driven in large part by discussion on Reddit, the 16-year-old online news aggregator and discussion forum. That reflects the size of Reddit’s audience, which runs to 430 million monthly users globally, according to a presentation given to advertisers this year. That puts it very close to Pinterest, which had 454 million monthly users as of June 30.
And yet despite that audience, Reddit is only now becoming a sizable ad business. After three years of intensive effort, Reddit is on pace to book more than $350 million in ad revenue this year, at least double what it earned in 2020, say people familiar with the matter. Pinterest, by comparison, had about $1.1 billion in ad revenue just in the first half of this year.
To try to close the gap, Reddit is aiming to expand its ad sales beyond the big marketers that now dominate its clients to include more small businesses and midsize advertisers, said Reddit Chief Operating Officer Jen Wong in an interview with The Information. Reddit last year introduced an automated ad marketplace platform to make it easier for advertisers of all sizes to bid on ad space on Reddit. Wong said Reddit plans to make additional investments in recruiting more small businesses to its platform.
“It’s still early,” Wong said. “But that [small business] channel has really high potential for us.”
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