When you think of paid social, do you think of Reddit ads? Here’s a look at all the reasons why Reddit ads can be a secret ingredient in the social media manager’s mix.
Let’s talk about paid social ads.
When we say “paid social,” the first thing that jumps to mind is usually Facebook and Instagram, maybe with some Twitter, LinkedIn, or Pinterest Ads in there.
If you’re like most advertisers, the last thing that you’d probably think about is Reddit Ads.
Reddit ads are often forgotten about in the paid social world, partially because other systems have seemingly more impressive targeting capabilities or are talked about more often. That can be to the misfortune of some advertisers.
However, not for Reddit ads. They can be highly effective for well-structured campaigns that align with their userbase.
We know that jumping into a new PPC platform can be a risk (anything that costs ad spend can chew up your budget, after all).
So in this post, we’re going to take a look at surprising facts about Reddit ads you may not know about the modern system that can help you determine whether they’re right for your social media marketing.
1. Reddit Has a Massive Audience
It’s a common misunderstanding that because Reddit is anonymous that it doesn’t have a ton of users. That’s most definitely not true.
Though Reddit has an extremely diverse audience, a significant segment of users has high disposal income, making $75,000 a year or more in annual income.
2. There Are Different Types of Ad Placements
There are two types of ads on Reddit, which marketers can use to their advantage.
The first will show up in the right-hand sidebar, which includes Google Display Network-styled large images or videos that are clearly advertisements.
Ads in feeds
The second ad type will appear in feeds. They’ll look like posts aside from the blue “Promoted” tag at the top. When users click on those ads, they’ll be taken straight to your chosen landing page instead of a discussion page.
Both allow you to feature large images and videos to attract user attention.
The flexibility is great here, though the obvious advantage goes to the in-feed posts, which Redditers are practically guaranteed to see while browsing. It essentially gives you a subject line for additional copy to capture interest and really make your case for why they should click.
3. You Can Use Subreddit Targeting to Get Relevant Content to the Right People
Reddit has demographic and location targeting, just like all your standard paid social platforms that you know and love, where you can target by age, gender, location, and interests.
Reddit also has a secret superpower that can be incredibly effective when used strategically, however: subreddit targeting.
If you choose, you can have your ads only appear in specific communities (and to users with specific demographics, if you want to layer the targeting features).
There are over 2.2 million different subreddits, ranging from broad appeal (like “finance”) to much more niche (“vegan beauty”).
You can take advantage of this to ensure that your target audience is seeing your content when they’re actively interested in.
Showing an ad featuring a dog in the Dog Owners subreddit is an excellent choice, as is showing B2B solutions in “small business,” rosacea-friendly makeup in “sensitive skin,” and budgeting software in a subreddit about becoming financially independent.
Timing is a massive part of the equation when you want to drive conversions through PPC ads.
Showing the right ads at the right time when your audience will be receptive to them is everything.
4. The Minimum Daily Ad Spend is $5-ish
Some ad platforms have high minimum ad spends, which results in a high barrier of entry for businesses that want to test out new platforms or who are on a small budget.
Reddit’s minimum daily ad spend is only $5 per campaign.
There is a major drawback here in regards to budget on Reddit Ads, however, that we want to flag.
Reddit itself has acknowledged that “actual spend may be up to 20% higher than your budget amount.”
What this means is that even if you say you have a budget of $10 per day, you might end up billed for $12. Though $2 doesn’t make a big difference, advertisers looking at $1,000 a day budgets might not be so thrilled with a $200 a day increase.
While Reddit’s CPC-focused campaigns resolve some of these concerns (which were largely an issue with CPM billing, and which we’ll discuss in another minute), this warning is still there. So, it’s still relevant.
5. Reddit Uses a Next-Cent-Bidder System
One good thing about the bidding system with Reddit is that it has built-in features designed to protect advertisers. This includes their next-cent bidding strategy, which is similar to what Facebook uses.
For those who aren’t familiar, many PPC platforms (Facebook included) run on an auction.
You can bid whatever you’d like to have your ads shown to certain audiences and in certain placements with the hope of accomplishing certain objectives.
You aren’t competing just against other industries in your field, but anyone who wants that target audience.
An ice cream company selling non-dairy ice cream and targeting vegans, for example, may end up competing against a vegan beauty product creator, and someone targeting Millennials for invoicing software.
This can drive up ad costs quickly, especially once a marketplace becomes flooded. You never know exactly what you should bid to get placements because you don’t know what anyone else is.
Many advertisers therefore will enter in the highest bid amount they’re able to pay while maintaining campaign profitability.
The best news here is that the next-cent bidder system on Reddit will save you an abundance of money if you’re placing top bids on campaigns.
If you bid $0.75 per click and you win against the competitor who bids $0.50, the good news is that you don’t have to pay the full $0.75. You only pay one cent more than what they bid, which would be $0.51.
6. Reddit Has Recently Switched to Primarily CPC Pricing
Reddit ads used to prioritize CPM pricing, which is the cost per 1,000 impressions.
A relatively recent update, however, has shaken the system up a bit.
Reddit now offers CPM pricing on the brand awareness objective, cost per view for video views, and cost per click (CPC) for the other three objectives.
When you’re paying for specific actions like clicks, video views, or app downloads, it increases the likelihood that you’re only paying for users who are at least taking some sort of action on your ad instead of simply seeing it.
Doing so can increase your ROI, and allow you to place appropriate bids on each individual action based on what it’s worth to your business.
7. Reddit Ads Can Be Wildly Successful
Here’s perhaps one of the most surprising facts about Reddit Ads of all: These campaigns can be incredibly successful when they’re set up well.
There are plenty of case studies that can prove it.
Take a look at the following examples that prove it:
Duracell received 250M+ impressions after advertising on Reddit, along with a 16.3% increase in brand awareness and a 13.8% increase in brand awareness.
Gaming company Playticka saw a 15% higher-than-normal average revenue per app install and a 16% higher engagement rate than they did on other platforms.
Woodchuck Hard Cider’s promoted post (which had comments enabled) had their highest sales month in over seven years, along with over 20Ms impressions that received dozens of on-platform awards and over 5,000 comments.
Retail company Thread had an 86% more effective CPM than other digital channels, and a 48% lower cost per registration than other channels. All of this, of course, was extremely beneficial when combined with their 15% increase in LTV and CPR quarter-over-quarter.
8. Reddit Ads Offer Lower CPCs Than Many Competitors
Remember how we talked about how Reddit’s ad system (just like most other paid platforms) runs on an auction?
This means that the more competitive the market, the more you may pay. Facebook, which is a highly saturated market, is the perfect example of this.
We’ve run multiple experiments here at Agorapulse to see how Reddit Ads perform in terms of cost-per-click, which makes a major impact on how much bang you’re getting for your ad spend buck.
Here’s what we found:
When compared directly in an experiment, Reddit offered a $0.44 CPC while Instagram cost $1.33. Reddit drew 1171 clicks out of 454,646 impressions (.26% CTR) and Instagram had 393 clicks out of 27,347 (1.44% CTR).
An experiment comparing Facebook and Reddit found that Reddit had a $0.44 CPC and Facebook had a $0.76 CPC. Reddit once again had a .26% CTR, but was also able to generate more clicks for the budget than Facebook (which had a .90% CTR).
When we compared Twitter Ads and Reddit Ads, the same pattern held true. Reddit had a CPC of $0.44 (which, through later testing, we were able to drop to around $0.28) and Twitter had a $1.20 CPC. Twitter’s 1171 clicks out of 454,646 impressions were greater in number, but the CTR on Twitter was higher with 552 clicks out of 92,431 impressions.
Reddit does have a consistently much lower conversion rate than other platforms, though the much-lower CPC cost allows you to drive action at significantly lower costs.
If you’re looking to expand to another platform, that makes Reddit worth testing.
Reddit also expanded its targeting options in the past few years, allowing for targeting layering and the ability to show your content in specific subreddits, which can increase CTR overall.
You can also use retargeting campaigns based on a tracking pixel. This is all good news.
Though the platform may not be for everyone, it is worth testing for both B2C and B2B businesses. And when you run those tests, make sure you let us know how they go!
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