Reddit’s missing business model: Embedding commerce in culture

-Accuracy of targeting potential customers

Reddit offers premium memberships that cost $5.99 per month. The Premium subscription hides all advertisements on the site and gives access to an exclusive subreddit called r/lounge. It also gives users 700 “Coins” per month, which can be gifted to other users as a reward for posting comments a user likes. A quick look at SEMrush shows that r/loung... See more

Reddit has doubled down on digital ads under CEO Steve Huffman, and more than doubled revenue from $76.9 million in 2018 to $181 million in 2020. It is expected that its revenue will cross $350 million in 2021. The revenue growth represents a YoY increase of 93%, which is staggering.

So Reddit’s small scale makes it challenging for them to compete with platforms for top of funnel advertisements, but what about the lower levels of the funnel? The next phases, Consideration and Evaluation, are when the customer is searching for the information. Google and Amazon are integrated into buyer journeys at this stage, and ads on these p... See more

Digital ad efficiency = Scale * Likeliness of ad to be clicked * Targeting Accuracy

The purpose of having a creator profile is to allow users to quickly understand if they want to follow/engage with a creator. The other purpose is to make creator monetization easier through tips, subscriptions, product-listing, etc. Reddit’s creator profiles can do with a few coats of varnish in both these aspects. Reddit should also consider prov... See more

One question that pops straight up is how the value is shared when a subreddit is monetized. My view here is that the moderators and Reddit split this value. The moderators have worked tirelessly for a very long time for free, and this seems like the right incentive for them to take this up full time, improving the quality of subreddits.

There’s just one problem: Reddit’s current monetization strategy (ads!) prevents it from unlocking the actual value of its 52 million daily active users. In order for me to issue my hypothetical “buy” rating, Reddit would need to recognize that it cannot follow the same path to power as Facebook and Twitter as their advertising business is clearly ... See more

: Subscribers of a subreddit can collaborate their resources towards an economic goal, as we have seen in GameStop and AMC. But these transactions do not happen on Reddit, which can be changed. The good folks at PartyDAO recently launched a new product, PartyBid, that lets people form teams to bid on NFTs by pooling their resources and bid on multi... See more