Reddit tests search ads to boost revenue amid traffic decline
Reddit is now experimenting with ads in search results, hoping to boost revenue from its current users.
The ads are being shown in an initial test with a select group of eligible advertisers and are tailored to what people are searching for: think "espresso station" or "home office setup."
This move comes as Reddit's search traffic is dropping, partly because Google's new AI-powered searches send fewer clicks its way.
Even though Reddit beat expectations last quarter, it expects lower sales ahead, which has hit its stock.
Reddit plans gradual rollout outside US.
Reddit's user numbers have stalled globally at 130.3 million, with US users actually dipping a bit.
To tackle this and improve ad targeting, Reddit plans to make the transition gradually, initially in markets outside the US.
This should help them get better data on what people like, hopefully making ads less annoying and more relevant.