Just like publishers and agencies, digital platforms need to strike a balance between sameness and differentiation.
Over the past year, Reddit has been augmenting its advertising platform with familiar features – cost-per-click bidding, video advertising, app installation ads – hoping to capture marketer dollars once earmarked for Google and Facebook. That was the focus of the pitch Reddit made to executives at CES at the start of the year, and industry observers expect the pitch will resonate; eMarketer predicts that Reddit will generate $119 million in ad revenue in 2019, and more than $260 million by 2021.
But being an alternative to Google and Facebook only gets a platform so far. Though Reddit has global ambitions — “We believe everyone should be on Reddit,” said Reddit COO Jen Wong — Reddit also hopes to position itself as a platform with something that no competitor can copy.
Digiday spoke with Wong about the plan to develop Reddit’s ad business, the problems with brand safety and the platform’s relationship with publishers. The conversation has been edited and condensed.
Platforms are under pressure because of brand safety concerns. How do you think about brand safety, especially with UGC content?
Safety with UGC is an internet question, it’s not specific to Reddit. Every platform has to handle it their own way. We have policy and tools that’s like the baseline for Reddit Inc. that applies to everything that happens on the platform. Our special sauce is definitely that moderation. We feel really good about that mechanism.
So you like how much you’ve invested in being able to deliver that safety?
We’re always evolving and we’re always investing more, both in terms of helping our moderators evolve and how they think about it and helping them, and then on the brand safety side, we have all these mechanisms for brands: white-listing, black-listing, being able to target. There’s so many mechanisms of brand safety. the one that clients want that we’re working on is third-party verification. That’s a priority for me this year.
To be clear, in terms of safety and platforms, nobody has the measurement. Nobody has the measurement that advertisers want today. The one thing I can say is that we are absolutely committed to having that happen, and we need partnership from the vendors to do that, but it’s important to us because it’s important to our clients.
Why does nobody have the measurement that advertisers want today?
It takes two to tango. You have to be willing, as a platform, to make the investment, and you need the third-party partner to make the investment. And I don’t think those two have met, in all cases.
Reddit’s been busy augmenting its ad offering. Is your goal to make something that’s unique or something that’s familiar for marketers?
Ultimately, we want to make something that’s very differentiated. We’re very clear on where that opportunity is, but where we are is mid-flight. For the past year, we’ve focused on parity and getting those basic aspects of the marketplace down.
But I think the things that make Reddit unique are three things. First is, everyone knows you shape conversations on Reddit before it goes elsewhere. That’s an opportunity for marketers to jump into a conversation that’s going to thread over the next two years. Two is, we know community better than anybody else. There’s nowhere else you can go to answer the question of, ‘Community’s important, but what can I do?’
How do you monetize that community?
I think it’s still advertising. But I think it’s a set of insights people can’t see today, and we’re starting to provide, and I think we’re best positioned to do that. We have that ecosystem. But ultimately, the biggest signal that we have that nobody else has is we have an un-duplicated interest graph.
That interest graph is based on community, right? My friend’s husband’s renovating, and he’s on Reddit dealing with drywall. He’s definitely on Facebook sharing pictures of his kids, but he’s not talking about drywall. That interest graph is really important because it tells you what communities matter to that person, and ultimately comes down to great targeting and the format with which you engage.
As you continue to develop Reddit’s monetization strategy, will it be optimized as more of a bottom funnel or top of funnel place?
I think we’re always going to be up and down the funnel. Shaping conversation early is ultimately upper funnel, thinking about community and their influence. Communities have influence over the upper funnel as well as immediate decision-making. Obviously, qualified audience leads to performance.
Let’s talk about platforms’ relationships with publishers. Can they ever be friends?
I don’t believe the relationship has to be acrimonious. I actually believe it can be very constructive. For certain platforms it is constructive. I certainly hear that some are going well. I think we have a good relationship with publishers, because we’re very transparent about what we can do and what our ability is to help. We’re clear in setting expectations, and that’s important I think in setting a healthy relationship.
Would you say the relationship with publishers have evolved?
For a while, we were having conversations that I felt were pretty transactional: ‘Hey, can we get a lot of traffic?’
That’s not really our starting point. I think things are changing. I think people want depth of conversation. Those conversations have all moved off publishers’ sites. It requires a bit of a mental shift from publishers about what is possible, because we’re different. I think we have a healthy relationship, I feel really good about it.