Currently, Reddit is following the path of Meta and Google in developing ads. As a marketer who has conducted several A/B tests, I believe Reddit is not yet fully utilizing its advantage in its highly engaged community asset. This article discusses how Reddit can leverage an algorithm based on community engagement to achieve 10X growth in commercial advertisement revenue.
Key takeaways:
- To improve ads revenue, Reddit needs to develop better ML capabilities and a space with the intent to purchase.
- Comment section in Reddit ads offers AI startups the opportunity to gain traction, engagement and actionable insights that no other platform can.
- Driving inspiration from a research paper on online educational discussions, I listed a few key metrics that can help Reddit and users track engagement.
The Problems with Reddit
User Behavior on Google vs. Reddit
User comments are increasingly being ranked higher than many websites on Google, highlighting the importance of user-generated content in SEO. On Reddit, subreddits function like individual websites, Redditors serve as ranking authorities, and comments act as articles. This dynamic mirrors the network of websites but is optimized for SEO in a unique way.
The key difference between Google and Reddit is the user intent. Most Redditors visit the platform to update themselves on current events in their favorite subreddits, not necessarily to convert or purchase. This contrasts with Google users who often have a clear intent to search and buy. To compete effectively, Reddit needs to enhance its machine learning capabilities to improve ad relevance and better align with user interests. While Reddit’s infinite scroll design does pose difficulty in trackability, it also trains users to scroll past ads subconsciously. This behavioral difference is critical for Reddit to understand and address. In this article, I will only focus on the UX and search optimization aspects of Reddit.
Learning from Patreon and Twitch
Patreon and Twitch are platforms with different monetization methods and sectors of SaaS products. The fundamental difference between the two begins at the start of the content creator’s customer journey. Patreon is a prominent example of a community-fund economy, but it has a fundamental flaw in its revenue model due to its reliance on a singular monetization method: subscriptions driven by passion. This limits creators from accessing broader commercial opportunities. Conversely, Twitch streamers have broader opportunities thanks to the platform’s diversity in revenue streams, including ads, affiliations, and other commercial opportunities.
Reddit's Existing Traffic Seeking to Monetize
One of Reddit’s major hurdles is that Redditors are often averse to advertisements. However, Reddit already hosts numerous subreddits that focus on creative job opportunities. For example, r/Hungryartists, a subreddit with 212,249 users, has an average transaction value of about $30, with higher-end transactions reaching up to $100. What these subreddits lack is the convenience of facilitating payments. Reddit needs to strategically open parts of these communities with a marketsplace, set up spaces for commercial advertisements, and nurture users to develop a monetization profile on the platform.
First Step to 10X Revenue
Reddit holds a unique position in leveraging its textual engagement capabilities. It is not only an excellent platform for enterprises to build their brand but also a valuable space for startups to find and interact with early adopters. As a product marketer for multiple startup products, I have found that the most effective method to attract users is direct messaging. However, this alone does not lead products to mainstream success. Reddit ads have provided a quick and easy way to set up posts, solicit insights, and create meaningful connections with prospects. Based on limited data, conversion rates and CTR are higher when ads receive comments. Let's talk about the goals and metrics of using Reddit.
Identify Highly Engaged Users
One of the primary goals should be to identify users with a high engagement rate and high relevance to the content and ads being promoted. These users can act as key drivers of community interaction.
Incentivize Active Redditors
Reddit should incentivize active redditors with high karma to lead engagement within their communities. These users can be rewarded for their participation and promotion of ads, helping to integrate advertisements more organically into the community.
Keyword Insights and Dynamic Audience Expansion
Reddit can utilize discussions and debates within its platform to gain keyword insights. This can be particularly valuable for niche communities, providing more targeted and effective ad placements. Implementing dynamic audience expansion targeting can help identify and engage with new niche communities, further enhancing ad reach and relevance.
Drawing Parallels from Online Education
Research papers on online discussions in educational contexts can provide inspiration for incentivizing engagement and simulating quality learning and product onboarding. Marketers willing to pay for engagement can benefit from Reddit directing ads towards authoritative users with high karma in relevant subreddits. Ads with comments increase the likelihood of converting window shoppers into active participants. Additionally, marketers can perform valuable keyword research based on ad results, focusing on niche communities rather than relying solely on broader platforms like Google ads. To effectively leverage Reddit's unique community engagement for exponential growth, it’s crucial to track key metrics that can guide strategic decisions. Here are five essential metrics to monitor:
1. User Participation
User participation is a critical indicator of engagement within Reddit posts. It is calculated by dividing the number of users participating in a Reddit post by the number of users who viewed or referred to the post.
User participation = number of users participating in the post / impressions
This metric helps in understanding the engagement rate and the effectiveness of content in drawing user interactions.
2. Quantity of User Postings
The quantity of user postings for a subreddit is calculated by dividing the number of user posts on a subreddit by the number of users participating in the subreddit within a set period.
Quantity of user posts = number of user posts / users participating in the post
This metric indicates the average number of comments users are making in a post, providing insights into the level of active participation over time.
3. Quality of User Postings
Quality of postings can be assessed by analyzing the educational value of user contributions. Traditionally, transcript analysis categorizes posts as Educationally Valuable Talk (EVT) or Educationally Less Valuable Talk (ELVT). On Reddit, this can be approximated using the upvote system.
Quality = (total upvotes - number of threads) / total votes
By using upvote counts minus the default number for each thread, we can estimate the perceived value of posts by the community. This metric helps in distinguishing high-quality interactions from less valuable ones.
4. Extent of Threading
The depth and engagement of conversations can be evaluated by assigning scores to different layers within a conversation thread. Instead of using human-labeled data, a scoring system that assigns weights and biases with a neutral network to each layer depth can be implemented. It should offer an engagement score for a post by considering the number of replies at different depths, with weights reducing in value as the depth increases. It reflects the idea that deeper layers contribute less to the overall engagement score.
E. OP (Original Poster) Presence
The presence of the original poster (OP) can be measured by dividing the number of comments the OP makes by the number of users participating in the post.
OP presence = number of comments OP posts / number of users participating in post
High percentages of OP posts were previously correlated with low quantities of user posts, suggesting that excessive OP involvement might suppress user discussion. However, in the context of Reddit, active OP engagement can foster a more interactive community, as users may be more likely to engage when they expect responses or feedback from the OP.
