Image: © Rafael Henrique/Stock.adobe.com
Reddit said the new ad format will help advertisers create ‘in-depth conversation’ with users and boost engagement, while the platform’s IPO looms closer.
Reddit has launched a new advertising format that is designed to increase ad engagement with users on the platform.
The company said their free-form ads let advertisers share in-depth information by combining multiple media types such as image, video and text using ready-made templates. Reddit said this ad format is inspired by the megathread, which is used to combine all the threads on certain big stories or topics.
“Just like the megathread, free-form ads encourage multiple users to come together, get the information they need and deep dive into the topic at hand,” Reddit said in a blogpost. “All of this makes it one of the best formats to launch a product, introduce a brand to a new audience or share a seasonal shopping guide.”
Reddit said the open-ended nature of this ad format will help advertisers create “in-depth conversation” with Reddit audiences. The platform also claimed that one brand saw a 91pc upvote rate and a 42pc increase in its click through rate by using this ad format.
“Free-form ads give advertisers the flexibility to build an ad of any length, using multiple media types, with a look and feel that’s native to the platform,” said Jim Squires, Reddit EVP of business marketing and growth.
“This format encourages a mix of content, context and creativity from brands, while driving strong performance and brand awareness.”
Reddit IPO looms closer
The new advertising format comes as Reddit prepares to go public with its long-awaited initial public offering (IPO), which is expected to launch this month.
The platform has an ambitious target for this launch as it expects to reach a valuation of nearly $6.5bn from this IPO, according to multiple reports.
The company plans to sell 22m shares at a per-share price of between $31 and $34, according to a filing with the US Securities and Exchange Commission (SEC). This means Reddit plans to raise up to $748m from this IPO. Reddit has set aside more than 1.7m shares for certain users and moderators of the site who want to participate in the IPO.
Reddit – often referred to as the frontpage of the internet – first solidified plans to go public after submitting IPO paperwork with the SEC in December 2021. At the time, Reddit had been valued at $10bn after a $700m Series F investment led by Fidelity.
But an unstable IPO market prompted the platform to delay this launch. The results of the new IPO are uncertain and Reddit warned in an SEC filing last month that active users owning stock could make the deal riskier for other investors.
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