Article
Social Media

Reddit puts ads inside its own search results

Reddit is testing contextual search advertising as Google's AI answers cut into the referral traffic it has long relied on.

by TechDefused · Edited by IL

Reddit has begun testing advertisements placed directly within its own search results, targeting users at the moment they are actively looking for something to buy.

The format, launched on 3 November, matches sponsored listings to live search queries, so a user searching for "espresso station" might see ads for coffee machines or beans alongside the usual community posts.

The test is aimed at performance advertisers, who pay for measurable actions such as clicks and purchases, rather than brands running awareness campaigns.

The move comes as Reddit faces a meaningful drop in traffic arriving from Google.

Chief executive Steve Huffman told investors that Google referrals fell "meaningfully" in the third quarter, with earnings materials putting the decline at more than one million referrals per week on average during October.

Reddit attributed the drop partly to Google's expanding AI Overviews feature, which answers search queries directly on Google's own pages and reduces the need to click through to external sites.

The company's third-quarter revenue reached $895 million, up 53% on the same period a year earlier, with advertising revenue of $847 million rising 54%.

User growth told a more cautious story.

Global daily active users rose 12% to 130.3 million, while US daily active users fell 2% to 50.7 million, both below analyst expectations.

Fourth-quarter revenue guidance of $1 billion to $1.03 billion also came in below the $1.05 billion analysts had forecast.

Reddit is separately testing a login requirement for some content outside the United States, on the basis that registered users are more engaged and generate better advertising returns, though the final scope of that rollout has not been confirmed.

The company has not disclosed how many advertisers are participating in the search-ad test or released any early data on performance, saying it will evaluate the response before deciding whether to extend the format more widely.

Read more

by TechDefused