After just recently adding CPC ads to its expanding business tools, Reddit has this week launched new app install campaigns, and an update to its Conversion Pixel to provide more insight into ad performance.
As explained by Reddit:
"When advertisers choose ‘App Install’ as their campaign objective, we now directly target Reddit’s mobile app users with native mobile ads, allow advertisers to bid per click (meaning advertisers only pay if the ad converts to an app store visit) and target iOS or Android users (or both) and direct clicks to the app store URL."
As you can see, the app install ads feature a prominent call to action, which stands out in Reddit feeds. And given Reddit's audience, you can imagine that such ads - when targeted correctly - could perform well, and help drive results.
In addition, Reddit's also updating its reporting capabilities, both through integration with app install attribution providers and via its own Conversion Pixel.
Up till now, Reddit's Conversion Pixel has only been able to track a single conversion event, and didn't allow attribution configuration. The new version will be able to track eight different conversion events, including ‘Page Visit,’ ‘View Content,’ ‘Search,’ ‘Add to Cart,’ ‘Add to Wishlist,’ ‘Purchase,’ ‘Lead,’ and ‘Sign Up’. It'll also be able to show attribution windows of up to 28 days, and provide additional conversion data points.
As noted, the updates add to Reddit's growing business push, which is expected to ramp up even further after the company recently raised an extra $300 million in its latest funding round, boosting the platform's valuation to $3 billion. But at the same time, Reddit's average revenue per user (ARPU) is very low. According to CNBC, Reddit's ARPU is currently at around $0.30 - for comparison, Twitter's ARPU is about $9.48, and Facebook's is $2.09.
The discrepancies highlight the significant challenge Reddit has in front of it, in terms of growing its ad business - though there is also plenty of opportunity. The platform has more than 330 million active users, and while the Reddit community has long been resistant to ads, its audience has continued to grow amidst its broader business push.
Though there are some concerns over the interest of Chinese social media giant Tencent in the company. Tencent was the biggest contributor to Reddit's latest funding round, piling in $150 million, which some believe may lead to increased censorship on the platform.
That could drive users away, as Reddit shifts from its traditional free speech ethos. It remains to be seen what the impacts of Tencent's involvement could be, and whether Tencent will eventually look to get more involved in the company, but it's another point of interest, and another element to consider in Reddit's business growth.