Ing. Pietro Maiorana
Reddit has announced a test of advertising in its search results pages, inside its app. The test started on Tuesday and involves a select group of advertisers. The move comes just days after its third-quarter earnings, which showed a drop in traffic arriving from search. For digital marketers this matters, because a platform built on discussions is now trying to monetize purchase intent.
A few terms before we get into the facts. Search ads are ads shown in search results, based on the word searched. Referrals are visits coming from another source, such as Google. AI Mode is Google's mode that answers directly on the results page, reducing clicks to other sites. Scraping is the automatic collection of content from a site. Daily active users are users who are active every day.
What is Reddit testing in search?
According to Social Media Today, ads will be targeted based on the query and will carry a small label at the top of the panel. Reddit explains that the test uses the targeting already present on search pages, which it defines as high purchase and search intent.
The examples come from TechCrunch. A search for "espresso station" could show coffee machines, coffee or cups. "home office setup" could bring up monitors, desks and chairs.
Why is Reddit looking for new revenue right now?
TechCrunch links the test to the drop in search referrals, caused by Google's shift to an AI-based experience. Reddit beat revenue and earnings-per-share estimates, but the stock fell. Fourth-quarter guidance points to sales between 1 and 1.03 billion dollars, below the 1.05 billion expected.
According to Engadget, Google AI Mode has caused significant declines. Social Media Today reports that, according to CEO Steve Huffman, search traffic fell by an average of more than one million referrals a week in October. We have seen the same theme in Google's AI Mode ads.
How are Reddit's users doing?
According to TechCrunch, global daily active users remained stable over the quarter, at 130.3 million. In the United States they fell from 53.2 to 50.7 million, a 2% decline year over year. Reddit warns that if the trend continues, users could fall by a low double-digit percentage in the fourth quarter.
Hence the need to earn more from those already there. In July Reddit published a study showing that 72% of users come to look for information, and 64% of them have a specific goal.
What does mandatory login have to do with it?
Reddit also announced a move to an account-only experience, gradual and initially outside the United States. We wrote about it in this article. According to TechCrunch it protects against unauthorized scraping by AI and increases value for advertisers, because registered users offer more signals about interests and behavior.
Engadget reports that Huffman said the model would improve targeting. On Reddit, he added, "At this point, we are the only ones not doing it".
Limits to know
Reddit has not said how often the ads will appear, or when the format will be extended. Prices, advertiser selection criteria and expected results are not known. The test is early, and Reddit itself says it wants to gauge user reaction. We do not know whether mandatory login and search ads will be enough to offset the traffic decline.
What it changes for digital professionals
If you advertise, a new touchpoint opens with people already looking for purchase advice. For now access is limited, so the only thing to figure out is whether you qualify as an eligible advertiser. Relevance between searched words and your offer is what counts, as in the campaigns described in our guide to keyword research for Google Ads. Those who rely on Reddit as a source of organic visits, meanwhile, should expect that traffic from Google may shrink.
Our take
The move is understandable, but fragile. Reddit is valuable because people find unfiltered human opinions there. Placing ads exactly where people look for advice risks eroding that trust, especially if sponsored results resemble organic ones. The small label shown in the examples is not enough to reassure. The real issue is that a platform dependent on Google is now closing up, with login and monetized search, to protect its revenue.
Frequently asked questions
Does Reddit already show ads in search?
It is an early test, not a general launch. It involves a select group of eligible advertisers. Reddit has not said when the format will be extended.
How will the ads be chosen?
According to Reddit, based on several factors, especially contextual relevance to the search. Searching for "espresso station" could surface coffee machines or cups. The targeting already used in search is being reused.
Will the ads be recognizable?
Yes, according to the screenshots shown. The ads carry a small label at the top of the panel. Reddit has not said how often they will appear.
Why is traffic from Google to Reddit falling?
According to TechCrunch, because Google is shifting to AI-driven search. Features like AI Mode give answers directly in the results, reducing clicks to other sites.
How many users does Reddit have?
Global daily active users were 130.3 million in the third quarter, flat quarter over quarter. In the United States they were 50.7 million, down from 53.2 million in the second quarter.
Signals to watch in Reddit's search ads test
In the coming weeks it will become clear whether the test stays limited or becomes a permanent product. User reaction and fourth-quarter data will matter.
- Check whether Reddit announces an extension of the format to more advertisers and more markets.
- Follow fourth-quarter data on active users and revenue against the 1 to 1.03 billion dollar guidance.
- Watch the timing of mandatory login outside the United States and its effects on traffic to your content.
