Reddit's Advertising and Content Strategy for Growth

Reddit's ad revenue growth is driven by user and ad roadmap improvements, unique ad formats, and partnerships with sports leagues.

### Reddit's Growth and Advertising Strategy for the Rest of 2022
* 📈  Reddit's user growth in Q2 was driven by platform improvements, making it **easier for users to connect with communities** and for moderators to **manage content**.
* 💰  The company's advertising growth is fueled by **investments in the ad platform** to attract more advertisers and **improve usability and scalability**.
* 🏀  Reddit's recent partnerships with sports leagues, like the NBA and NFL, aim to **provide special content for fan communities**, creating opportunities for **advertisers aligned with that content**.
* 📊  The company is still exploring the **long-term potential** of non-advertising revenue streams, such as **data licensing**, in the AI landscape.
* 🔍  Reddit is open to discussions with search platforms for content access but maintains strict rules to protect **user privacy and data stewardship**.
* 🗳️  Despite the upcoming presidential election, Reddit does not expect a **significant boost from political ads**, as it is not a **major player in that space**.
* 🌐  The platform's diverse communities ensure that different topics have their moments, **smoothing out the impact of specific events like elections on overall activity**.

The stock is lower.
An impressive set of numbers for a relatively newly public company, and
everyone's kind of looking at the outlook and trying to extrapolate out.
Understand the world that Reddit is operating in.
Could you just give us a sense, Dan, in your conversations with advertisers,
what the rest of the year looks like, the environment looks like, and why
Reddit may or may not fare better with those advertisers compared to other
social media platforms? Yeah, thanks for having me.
Look at the markets of the markets. But when we look forward to the back
half of the year, I think advertising is a pretty stable market, and what drives
our growth is what drove our growth in Q2, which is delivering against our
consumer and ad roadmap and continuing to drive value for advertisers.
So I think what's driven our user growth has been the work of making it better,
making it easier to access, pose easier for people to connect with communities,
easier for mom to do their moderation.

And that's when we make the platform
better users grow. And from an advertising perspective,
it's been all the investments we made in our ad platform to improve usability and
scalability, so that we can address and serve more advertisers and grow the
advertising base. Next is delivering quarter-over-quarter
performance for our advertisers and then delivering things that only Reddit can
do that are Reddit unique, like the Ask Me Anything format refresh.
We're testing things like ads and comments, though those strategies are
working for us and will continue executing against that roadmap as we
head into the back half of the year. And we feel really good about the yield
on that roadmap. Okay.
Jen, you've been very busy since last we spoke. I think principally about the
deals with NBA, NFL. What I'm trying to understand is how
those kind of video-focused partnerships contribute to your ad revenue or ad
growth going forward from this point.

So Reddit is home to an incredible group
of fan communities, and the sports communities are some of the most active
and engaged on the platform, and they're global.
And so the idea of having those partnerships with the sports leagues was
to bring in special content like highlights, like access to players for
AMAs, or to insiders for those communities to enjoy.
So that is really our starting place for it.
Now what's great is that it does create an opportunity for advertisers to
support that content. Some of those advertisers support that
content and are aligned with that content on other platforms like
television, etc. So it is a really nice win-win-win for
users and communities and Reddit and advertisers.
It's early. It's a program that we're testing,
and we've done some work with the NFL. Now we've expanded it to more leagues.
We are excited about it because I think the communities are excited about
getting access to that content.

And if you think about it, you know, we've done partnerships with U.S.-based leagues, but there are so many more sports and so many more global leagues that we could engage with. And then the fan communities, they really go beyond sports on Reddit there. Again, I am a long-serving, suffering, and passionate Chelsea fan in football, what you call soccer. And I dive deep into Reddit when I want to see what the fan base wants to know. And you and I have discussed previously licensing of data to the air companies. Google Open, I bet. But a few months have elapsed, and I'm wondering if you now have a better sort of vision for the long-term potential of that business model away from advertising. Look, I think that landscape is still emerging, and it's still early days for A.I.. So it's a long arc. We've been, I think, very thoughtful about how we structure our partnerships.

our view.
They're not one year; they're not long term.
They're sort of midterm partnerships that allow us to learn and find a way to
work with this new area and see how it goes.
So I don't think, you know, I think we still continue to learn in this process
because I think it's a very long arc. I do think some of the things that we've
done have established a foundation for having these partnerships.
So if you look at our public content policy, and you look at the changes that
we've made, I think we've made it really clear how we want the ecosystem work
because we are stewards of Reddit's data.
And user privacy is really important in allowing scaled access to Reddit.
Yes. Jen, when I sit at my computer in the
morning, I use various search functions. It's often a Reddit post that will come
up, and it's quite easily discoverable. Specifically, Google search, but that
going forward chat GPT.

There are platforms where that's not the
case. Bing, do you have a clear strategy for
search expansion for Reddit content? I mean, look, we have been beneficiaries
of the open Internet. We believe in the open Internet in
allowing people to get access to important information and read its
corpus as some of the best and most important answers regarding everything
products, services, life, etc.. So we want it to be open, but we have to
have a set of rules for doing that and search and summarization and AI and data
usage, they're sort of all merging, right?
This is part of what's changing in the world right now.
So I think our view is we will have a conversation with anybody about having
access to the data, but we've been very clear and transparent about our rules,
which are public content policy and protecting user privacy, being good
stewards of Reddit's data, and that we have to have a conversation where those
policies and rules are respected and

then there's commercial alignment.
So we're having conversations with every player, large and small.
And I think we've made it clear, you know, what the rules are and how to
make this work, and the fact that we've signed deals, I think is a sign that
we're sensible. There's a path here to do that.
Jen The Stages stage is now very much set for a presidential election race for
November. How does that impact Red?
Do you foresee a boost from political ads or even just activity on the
platform centered around the election? You know, we actually are not a big
player in political ads. We never have been.
Politics is obviously a big area that our communities engage with on Reddit.
So we do see conversation. But what I would say is on Reddit,
because we have so many diverse communities, different communities have
moments at different times. This is a presidential election year.
So politics is, you know, going to be a

little bit bigger.
But then Olympics was a little bit bigger.
And then there are seasons where other communities kind of have their moment.
What happens with Reddit is that that kind of smoothes out over time.
So a community might be having a moment at one time, then another community,
then another community. But if you look at the arc of Reddit's
growth, it sort of is all smoothed out over the trend.

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Reddit's Outlook on Ad Revenue and Growth

Reddit's ad revenue is expected to remain stable for the rest of the year, driven by delivering value for advertisers and unique advertising strategies like the Ask Me Anything format refresh.

The company's user growth is attributed to ongoing efforts to improve the platform and make it more accessible, with a focus on unique features like ads in comments.

The video-focused partnerships with NBA and NFL are likely to contribute to Reddit's ad growth in the future.

Reddit's Partnerships with Sports Leagues for Special Content

Reddit has partnered with sports leagues to provide special content like highlights and player AMAs to the global and active sports communities on the platform.

These partnerships also create opportunities for advertisers to support the content, resulting in a win-win-win for users, communities, Reddit, and advertisers.

The program, which started with the NFL and has now expanded to more leagues, aims to engage with a wide range of sports and global leagues beyond the U.

Reddit's Stance on Partnerships, Search Expansion, and Data Usage

Reddit is focused on establishing midterm partnerships to explore new areas and learn along the way.

The company has set a clear foundation for partnerships through its public content policy and changes, prioritizing user privacy and scaled access to Reddit.

When it comes to search expansion, Reddit believes in the open internet and aims to have conversations with others while respecting its public content policy and user privacy rules.

The company sees search, summarization, AI, and data usage as interconnected elements that are evolving in the current world.

Reddit's Stance on Political Ads and Community Engagement

Reddit is not heavily involved in political ads and does not expect a significant boost from the presidential election race.

The platform's diverse communities result in different topics having their moments at different times, ultimately smoothing out the overall trend of engagement.