How Reddit is hoping to grow its ad product revenue

Ever since its IPO in March 2024, Reddit have (predictably) been laser-focused on generating more revenue. After operating at a loss for over 20 years, they turned a profit for the first time last quarter. Woop!

But more work is to be done.

In a recent CNCB interview, COO Jen Wong partially revealed Reddit's strategy to generate more revenue from its ad product.

The international opportunity

About 50% of Reddit users are located outside of the U.S., yet international markets only generate 17% of their revenue. That sounds like an opportunity.

“The opportunity, the way I think about it, is every language is an opportunity for another Reddit,” says Wong. Reddit intends to capture this opportunity in a few ways.

First, through the promotion of the Reddit ad product to non-U.S. customers. Businesses in countries like the U.K., Brazil, and the Philippines are likely to get targeted.

Incidentally, as a UK resident, I received the following email from the Reddit ads team as I'm writing this post! Perfect timing:

Second, product enhancements...

From the product side, Reddit are focusing on improving their ad platform and the wider product for international users.

In the latest quarterly earnings call, CEO Steve Huffman told investors that "improving the search experience on Reddit is a key part of [our] strategy". In particular, Steve believes there's an opportunity to improve the experience of users coming from a Google search to a Reddit post and, hopefully, keep them on the site.

Search is, of course, a key feature as it impacts all the metrics Reddit care about.

• Good search results keep users returning.

• A satisfying post-search experience keeps users scrolling and seeing ads.

• Good search results increases the viability of ads and raises Reddit as a go-to platform.

To improve search internationally, Reddit started investing heavily in machine-led translations of their platform. Steve shed light into their approach to this behemoth task:

"Our primary objective was: Can we translate English content into other languages, in this case French, and [can we] attract French-speaking users in France on translated content? The answer is yes. Following that simple learning, we're rolling out kind of a full, immersive experience into five countries."

Jen Wong said Reddit should be available in 20 to 30 languages by the end of 2025.