Reddit dangles seasonal ad credits but advertisers still want better proof it works all year round

After reviewing the incentives that Digiday had seen, Accuracast’s group CEO Farhad Divecha said that incentives like this “do work to reignite dormant clients’ interest to retry the platform.” However, following the decline in Google Search referrals, the general sentiment among his team’s clients is that Reddit isn’t as attractive without ChatGPT and Google sending it all that traffic.

The dip Divecha is referring to is the one Reddit disclosed on its earnings call last month when CEO Steve Huffman said October search referrals were down by more than one million a week on average, in part because of Google’s AI search features. To be clear, the credits aren’t tied to the slump. Q4 incentives are a fixture of the platform ad calendar and Reddit’s deadline for them is timed to get new campaigns running before Black Friday. That said, the extra spend could still help offset some of the hit from search, at least for a quarter. 

Because incentives only go so far. Keeping advertisers around once the credits run out takes an ads platform that does what marketers need it to do, from measurement to targeting to self-serve tools. Reddit is still building toward all of that. 

“Reddit is making big strides to compete with their competitor set within social with new capabilities, features across targeting, bidding and measurement but ultimately still comes in last place,” said independent ad tech consultant Jonathan D’Souza Rauto. “Advertisers do like to test the waters with it but it doesn’t necessarily translate in always-on budgets.”

The incentives come at the end of a year in which the rate of Reddit’s ad revenue growth has slowed down over three consecutive quarters. In Q1 2026, Reddit recorded $625 million in ad revenue, up 74% year over year, per the company’s earnings reports. By Q2, ad revenue had increased to $762 million, the rate of growth had slipped to 64% on the same period a year ago. By Q3 2026, the platform announced $847 million in ad revenue, with growth falling again to 54% versus the same period a year ago, per its latest earnings.

“The slowdown in ad revenue growth and referral traffic may be occurring at the same time, but that doesn’t necessarily mean one is driving the other,” said Jessica Dervyn, senior principal analyst in Gartner’s Marketing Practice.

Reddit, however, points to its continued revenue growth and advertiser demand as evidence that the platform remains an attractive proposition for marketers.

“The numbers speak for themselves: we’ve grown ad revenue by more than 50% year over year for nine straight quarters, well ahead of most peers over the same timeframe,” said Natalie Maguire, director of global B2B communications at Reddit in an emailed statement to Digiday. “We continue to see strong demand from advertisers as they increasingly turn to Reddit to drive results across the funnel. Our ad incentive program has stayed consistent over the last year and we have not increased our incentives amount. It’s an ongoing part of our business and a standard practice across the industry.”

It’s a thought not lost on some advertisers. 

Take James Mortimer at Roast, for example. He said that his team finds the platform “really valuable” for advertisers because the users are so engaged.

“There’s quite a lot of people on there [Reddit] you can’t reach on Meta,” he said. Mortimer acknowledged that Reddit isn’t for every advertiser, but said it was “definitely valuable for the right advertisers that can work on there.”

However, audience engagement alone isn’t necessarily enough to convince advertisers to shift more of their budgets to Reddit. Measurement remains an important part of the equation.

“That’s something where Meta is really good now, so it’s harder to make the case for a client who is spending on Meta already to then take budget and put it into another channel [like Reddit], which might not be as effective,” said Mortimer.

New Gen’s strategy director Mark Bellamy had a similar take, saying that search referrals are part of the story but not the main thing holding back ad spend on Reddit. The bigger picture, he said, is the ad product.

“Reddit is still a test-and-learn platform for us, not somewhere we’d confidently put full-funnel budget,” he said. “You can get good CPMs and decent awareness. What we haven’t seen enough of is proof that you can build an ecosystem there that drives quality traffic and nurtures it. Until we do, we’ll be cautious about recommending significant media spend.”

That puts the onus on Reddit to demonstrate that advertisers can get meaningful returns from the platform beyond the initial incentive. While promotional offers can bring new advertisers through the door, converting those trials into long-term investment is a different challenge entirely.