‘Bridge the gap between paid and organic’: Why Reddit is building an in-house agency to work with brands

reddit

Reddit is building an in-house creative strategy agency, KarmaLab, as it works to further bolster its ads business.

The group aims to help brands hone their advertising creative strategy to work on the platform under the leadership of Reddit’s former head of creative strategy, Will Cady, who is now the global director of KarmaLab. The agency currently has just under 20 employees but Cady intends to hire “substantially over the coming months.” KarmaLab has already worked with brands like Snickers, Samsung and meal delivery kit service EveryPlate to create ads (i.e. promoted posts) aimed at specific subreddit communities as well as Reddit’s overall audience (the platform claims 52 million daily active users).

“This has been a long time coming,” said Cady, adding that in working with Reddit via KarmaLabs brands are able to serve ads that are “contextually relevant” in various Reddit communities. “We bridge the gap between a paid approach and an organic approach to Reddit — that’s really how we’ve worked with brands.”

The full-service creative shop will work with brands on social listening and trend reports as well as community management, creative workshops and campaign development to create ads for the Reddit platform. By working directly with brands to create ads designed specifically for Reddit, the shop hopes to attract more brand advertisers to the platform, per Cady. 

In recent years, Reddit has been working to grow its ads business. Last May, Reddit restructured its ads sales team and hired Pinterest’s former vp of growth Harold Klaje. The rise of e-commerce — and consumers’ increased interest in consumer reviews of a product via the platform — over the last year has helped the platform catch the attention of brands like Tushy. Now, Reddit aims to continue that by helping brands understand, through regular workshops with KarmaLab, the best way to approach sponsored Ask Me Anything events as well as ways to enter popular communities like gaming or cryptocurrency subreddits with paid and organic posts. Pricing for the workshops, organic or paid posts is unclear as Cady declined to share those figures.

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Some brands have found it difficult to find ways to advertise on Reddit that will be embraced by the platform’s audience. As previously reported by Digiday, authentically speaking to the Reddit audience “in a way that you don’t feel like a brand” was key for Bud Light when it began testing advertising on the platform in 2019. 

“Reddit is not the first publisher to leverage in-house creative resources to offer advertisers fit-for-platform content volume,” said Jay Pattisall, principal analyst at Forrester, adding that The New York Times, Facebook, and others, offer similar services. “These groups provide a valuable service in preserving the platform experience for its users,” Pattisall said.

He continued: “When paired with experts that know the advertiser brand, the combination of publisher and brand creative services produce content that meets the needs of advertiser, publishers and consumers. Publisher creative services are typically funded by media spend, in effect creating value-add to media buying but adding financial pressure to external creative and digital agencies creative and content services.”

It’s unclear what brands pay to work with KarmaLabs specifically for paid media or an organic approach to Reddit as Cady declined to share financial figures, but he described working with KarmaLabs as being part of a “partnership” with brands. Ultimately, Cady hopes KarmaLabs will transcend just advertising on Reddit to help overall brand strategy.

Cady also believes working with the shop via workshops can help brands with brand safety issues as “the kinds of things, the watch-outs that are happening in the market are tremendously valuable for brands to know about, to know how people really feel,” said Cady. “It’s not necessarily what you want to bring into an advertising experience but it can inform your creative and your approach.”

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