Reddit's advertising growth strategy in Australia
Jen Wong
Credit: Reddit.
Marketers need to be "staying close" to communities, chief operating officer at Reddit, Jen Wong, told AdNews.
Reddit, which launched into the local market in 2021, continues to scale its advertising in Australia, which Wong said she feels “optimistic” about.
Expanding to Australia has brought its own distinct opportunities to grow, with Wong speaking to the impact of "regionality" across the country influencing user interests and being a catalyst for growth for the platform as a whole.
"Reddit is different in every country," she said.
"And this is one of those countries where a lot of the regionalities come out to play.
“You see sports and finance, but regionalities are really interesting. I've been in Melbourne, and that city has 5 million people, and we have 750,000 people weekly in that subreddit. It's actually the highest, most engaged subreddit."
Australia now accounts for Reddit's top five markets globally and is the third largest platform in Australia, according to the platform.
Reddit accounts for about a third of the country's internet users and 17 million people monthly. Reddit also reported a 44% increase year-on-year between December 2023 and 2024.
The team has expanded, almost doubling in the past year according to Wong, with commercial, measurement and marketing teams on the ground.
Wong said the investment into offering advertising solutions was recognising the influence of its community-based framework.
The company began testing advertising on the platform in 2006.
In 2010, it launched Reddit Gold (now Reddit premium) which offered users an ad-free experience.
In 2013, display ads launched.
This was followed by testing and launching native ads and sponsored posts between 2015-2016.
In 2018, the company accelerated its advertising offerings with a proprietary ad server.
Last year the company rolled-out Dynamic Product Ads (DPA) for general availability.
"We had a belief that Reddit had incredible raw materials for an ads platform, because we have this incredible intent, because redditors are influential in the conversation and in the consumer decision journey," said Wong.
Reddit has deduplicated reach compared to major social media platforms and reports that 45% of its Australian users are not on TikTok and 57% are not on Pinterest. Wong said it also offers advertisers an "unduplicated interest graph".
Advertisers can learn more about the personal interests that come from the anonymous dialogue exchanged between users in Reddit communities.
"We always believed that we could deliver hard outcomes, that redditors would download apps and buy things with.
"We could match things to their interest that we saw and they expressed on Reddit. "Fast forward to eight years later, I think we've done a lot of work in building-out that capability, and many things that we believed were possibilities have come true, and that's what's fuelling our growth right now."
The company's strategy for clients involves a "full funnel approach" engaging with large, mid-market customers as well as setting up small to medium-sized businesses (SMBs) "with a local lens".
"We really see an opportunity across all segments here, also across all kinds of agencies," she said.
"There's obviously a very vibrant indie agency landscape here as well as the holdcos.
"So we've invested in building out those teams as well and building relationships there.”
Two-thirds of the company’s ad revenue is from performance campaigns, including how campaigns are optimised to direct purchasing outcomes, sign-ups, app installs, leads and other lower-funnel conversions.
Recent case studies from clients like Nissan and Tiger Broker show strong conversions for the company.
Wong said she has been working with the Interactive Advertising Bureau (IAB) to “build this market”.
Wong said the targeting goals for the local market was to deliver hard outcomes for marketers.
Earlier this month Reddit announced it will launch Max campaigns, an automated campaign manager, currently in beta for traffic and conversion campaigns to select advertisers, according to a Reddit blog post.
This will be rolled out to more advertisers across the market in the coming months.
"We've been on this advertising journey where we wanted to become a full funnel," said Wong.
"We really wanted to convert that intent to hardcore, hard outcomes for marketers and Reddit Max is like a part of that journey. Because as you get into the optimisation, you want people to be able to do it in a very easy, always on manner, right?
"Because we're big enough, and we have such competitive outcomes that we think we can deliver business value every day."
Wong hones in on the power of intent.
Reddit finds consumers through two methods. One, through the communities a user joins. It also taps into where they are in a “specific moment” in conversation, and what products they are looking for reviews on, "what they are contextually interested in?," said Wong.
"We also know what you're contextually interested in, and we can find that using very fine-grained contextual keywords, almost like search, search-like granularity, right?.
"When a person's in a conversation page, they got there one of two ways, either coming in through a community that they love, or coming in one click past Google search.
"So you imagine the intent on that page is very, very high because they've chosen to spend the time in that post. And so what Max does is takes the friction of that.
"What Max does, which we're very focused on as a company, and I think is very differentiating, is insights, is really sharing with you, well, what did we find? What segments did we find, and what creative resonated with those segments and communities? Sometimes that's a surprise to marketers.
"They have a strong hypothesis as to where their customer is, and then the automation says, "Guess what? We found an additional segment".
"Reddit Max is about the power of delivering those outcomes easily with great insights."
Since AI Mode launched in Australia last year many industry commentators have shared their strategies on how to navigate the "zero-click" market, as blue links were replaced by AI summaries and search queries became more conversational.
Publishers have screamed the importance of securing visibility through earned trust. How? Quality, owned content and building an authority that ensures you are "winning the mention", as Scott Purcell, co-founder at Man of Many has put it.
"The gateway to the internet and search is changing with LLMs (large language models), and they are (marketers) all thinking about what the implications are for how they serve and reach their customers," said Wong.
AI models value and need "human intelligence" to train and give consumers insight into recommended products, said Wong.
"Over the last 20 years, we've had this open corpus of trusted human perspective that is ranked by other people in a very authoritative and trusted way," she said.
"We're in the business of community."
In 2024, Reddit signed data-licensing deals with Google and OpenAI, reportedly worth a combined $130 million annually, according to Reuters.
This provided the company's with real-time access to Reddit's Data API (application pogramming interface) to train AI models.
These partnerships show how Reddit has moved beyond a social platform, and is now a major data supplier for the tools that are currently reshaping search.
She said the foundations of "community and conversation" have become more "influential" and align with the evolution of search.
"We were a top 15 search term in Australia, for example, and then now in the world of the next generation of search, which is LLMs," she said.
"But the reason why that happened is because we have the focus on the authenticity and the conversation of communities, which is what we think about every day.
"Those are second and third order effects that have happened, as a result of the value of the conversation in communities."
Her message for marketers is to "stay close" with communities.
Trust and authority is now defined by product and service reviews, which she said help brands garner feedback on how to improve their products and also when frequently cited, are more likely to show up in AI recommendations.
"You want places like Reddit, redditors to enjoy your products and services, because they talk about them, they share and give you insights and feedback about your business, which hopefully makes it better," she said.
"You want to listen to them, you want to care about them, and I think that's always a good place as a principle to be.
"And it's hard for brands to relinquish control, but the authenticity of the community, because it's not controlled, it's not affiliated, it doesn't have other motivations behind it other than genuinely helpful conversation is actually what is valued."
While Reddit has shown strong performance growth in the market, the wider industry is currently preparing for the second tranche of the Privacy Reform Act.
It will give individuals more control over how their data is used for the purposes of advertising and marketing.
Wong said Reddit "values" privacy and has built features designed to give users control over their identity and digital footprint.
"We've built our advertising business on our platform in harmony with our values," said Wong.
"And one of our values as a platform is around the user's right to privacy.
"Our platform is anonymous. You just get an ID on Reddit, that's what we see.
"All of our signals for how we deliver advertising are from your activity on Reddit. It's not like we're tracking you around the internet.
"We weren't affected by ATT (app tracking transparency introduced by Apple).
"It's just never been something that's a part of what we do.
"If you want to do anonymous browsing on Reddit you can do that on Reddit.
"Privacy is something that redditors deeply care about.
"We have a set of activities across our company where it's really at the heart of both how we've constructed our business and how we've constructed our platform."
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