Reddit has carved out an upper funnel niche for brand advertisers

“This year we have more clients either who have just launched [on Reddit], or are getting ready to launch, than we’ve ever seen before,” said Kira Henson, director of social and search at media agency Good Apple.

Retailer JC Penney, for example, ran a recent campaign intended to draw attention to its autumn promotional campaign on the platform between September and December. Working with agency Dentsu X, the brand used Reddit’s Spoiler Ads formats – which mimic the ‘spoiler’ feature used by users to hide content that might ruin the ending of a movie or book for those unaware – to increase engagement on campaign assets.

Campaign tests showed a video completion rate for the spoiler ads 20% than regular in-feed video placements. The approach “[blended] content and commerce to create a fresh shoppable experience and lays the groundwork for future weekly Really Big Deal drops across emerging media formats,” said Lisa Schoder, vp of integrated marketing at JCPenney.

According to Jenna Palmer, group director, paid social at Dentsu X, the format provided a boost to engagement. “As someone’s scrolling through their feed, they actually can’t see the ad until they click through and they reveal it,” said Palmer. “That] really helped with surprise and intrigue.”

Penney will be using the format again in a spring promotional push. Palmer said the brand was set to increase its media budget with Reddit for that campaign, but she declined to provide specifics.

Reddit’s ad revenue grew 75% in the fourth quarter of 2025, rising to $690 million and driving overall income to $726 million. It’s a turnaround for some buyers, who recall having a difficult time persuading clients to sign off on budget destined for the platform in years past.

“Five years ago, none of our clients were using Reddit. It was the hardest sell… Brand safety was just not there,” said Rita Steinberg, vp of media at FUSE Create.

Since its 2024 stock market debut, marketers consider the platform clean enough to spend on, and the platform has secured up to 20% of some brands’ paid social budgets, according to Shatesha Scales, supervisor of paid social at media agency Rain the Growth. “In 2025 a lot of brands were open to unlocking that budget; in 2026 they’re ramping up,” said Scales.

Reddit itself would like advertisers to use its inventory for the full gamut of ad use cases. “The most common thing we’re seeing today is a full-funnel approach,” said Evan Wolf, head of mid-market and SMB sales at Reddit.

In most cases, though, advertisers are using the platform for “niche reach and upper-funnel awareness,” noted Scales. 

“From a conversions perspective, it doesn’t kind of match where we see Meta and really Tiktok going,” said Taji Zaminasli, co-founder and managing partner at media agency Ars X Machina.

But the ability to target at the level of a subreddit, or across interest categories, suits brands working at the broader end of the spectrum. Method1, for example, is currently running campaigns targeting over 100 different subreddits, according to Ian Orekondy, the media agency’s director of media, analytics and innovation.

Subreddit and category takeovers have also proven popular among clients, Orekondy noted. “We’re trying to drive awareness, we’re trying to impact the conversation, and we’re trying to drive what we call share of search and share of market,” he said. “We see those things correlated when we run campaigns on Reddit.”

Though Reddit’s ad business has expanded rapidly from a relatively small base, buyers don’t expect to see exponential growth in budgets. “I don’t see it growing exponentially. [It’ll increase] maybe 5-10% over this next year,” said Ryan Schuster, director of paid search and social at Brainlabs.

For brands to devote greater proportions of spend, or pull investments from different parts of their budgets, they’ll need to see consistent returns come through in campaign measurements.

They’ll also need to understand the platform’s niche among social platforms, search and the user-generated web, noted Deanna Mulkeen, head of media investment at Wpromote. “It is not just a paid social platform,” she said. “It is the future of search [and] it is a rich social platform.”

Mulkeen added: “What makes it stand apart is a story and a narrative.”