Ahead of its stock market debut, Reddit announced it would make it easier for advertisers to create regular user posts and serve them as ads on the social network.
Reddit claimed in a statement this week that the “all-new, completely unique ad format” is called “freeform ads” and is aimed at improving click-through rates and upvotes – by making ads look similar to user posts.
To be clear, we expect these free-form ads to be marked as promoted posts.
What's really happening here is that advertisers can use Reddit Ads Manager to create regular user posts and then pay to have them appear prominently on the site and app as promoted posts, i.e. ads. Until now, this has been a rather tricky matter for brands. From what we understand, they needed to book an ad that links to an external website, such as a landing page that sells certain things, or an ad that links to a separate user post on Reddit, or a banner ad.
Freeform ads instead look just like regular posts in people's feeds, with a promoted label rather than a link elsewhere, and are created through Ads Manager. There is no need to create a separate user post to link to in an ad. The user contribution is the display in freeform mode.
“Freeform ads are designed to look similar to the content Redditors share with each other and encourage maximum engagement from the community,” Reddit explained, encouraging companies to “advertise like a Redditor.”
The social media juggernaut pointed to companies already testing free-form ads, including Just Eat Takeaway, Kraft Heinz and Leica, all of which said the format was capable of “driving top-of-funnel results.” Reddit claimed that the free-form ads it tested so far achieved a 28 percent increase in click-through rates, which the company said “performed above average.”[ed] all other ad types.”
When comments are enabled on freeform ads, community engagement increases, Reddit claimed, without specifying whether this increase was positive or not. Reddit said Philadelphia Cream Cheese, a Kraft Heinz brand, has had success with the format, but declined to go into details about that attempt.
“The brand used our freeform ad format to showcase the versatility of the fridge staple with product details and recipe inspiration,” Reddit said. “This effectively prompted the Reddit community to put together a big list and share their shared love of cream cheese.”
Reddit claimed in its article about the new ad format that a post from Philadelphia had “a 91 percent upvote rate and a 42 percent higher click-through rate compared to the brand's previous Reddit benchmark” and that the post received “over a thousand comments in one Year” generated single month.”
These numbers don't mean much unless Reddit contextualizes them with more information about typical click-through rates in Philadelphia, and Reddit again declined to provide details.
We were able to find two posts from Philadelphia Cream Cheese accounts on Reddit that fit Reddit's description of freeform ads: one from u/PhillyCanada, posted a year ago, and the other from u/PhillyCreamCheese, posted six months ago, later confirmed by Reddit Personnel like the freeform ads.
The PhillyCanada post appears to match Reddit's mentions in the blog post. It has a total of 1.5k upvotes and 1.1k comments. PhillyCreamCheese's more recent one, on the other hand, received 617 comments and zero points, although we're probably assuming the score was set at zero.
The Leica test of free-form displays does not promise great success for us; it only has three points.
All freeform ads are intended to have some sort of sponsored label, although this does not appear to be the case in the three posts included in this story. While Leica shows it, none of the Philadelphia posts contain a tag indicating that they are sponsored content. We assume this is because Philadelphia posts are no longer supported by advertising spend and are therefore normal user posts again.
Reddit, which plans to go public on March 21 and has never turned a profit in its nearly 20 years of existence, has been doing everything it can lately to win support from investors. Most notably, the company signed a $60 million deal with Google to ingest user content for the purpose of training AI models, after making its data API a paid service last year, ostensibly to prevent that AI models ingest user data.
Users weren't thrilled with Reddit's behavior leading up to the IPO, and whether ads-as-posts will help isn't clear, although we know a thing or two about how engaged readers generally feel about web advertising. ®
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