Reddit has launched a test of advertisement placements within its search results pages. The company is currently working with a select group of eligible advertisers to evaluate user response and refine the ad experience based on contextual relevance to search queries.
The initiative follows a decline in search traffic referrals, which the company attributes to the shift toward AI-powered search experiences on platforms like Google. Reddit reported that its global daily active users remained flat at 130.3 million in the third quarter, while U.S. daily active users fell to 50.7 million.
The company provided a fourth-quarter revenue forecast of $1 billion to $1.03 billion, which fell short of market expectations of $1.05 billion. To address growth concerns, Reddit plans to transition to a mandatory logged-in experience, starting in markets outside the United States.
By requiring users to log in, Reddit aims to prevent unauthorized AI scraping of its content and increase the value of its audience to advertisers. Logged-in users provide more data on interests and behavior, which enables the platform to deliver more targeted and profitable advertising.
