Dive Brief:

• Social media company Reddit, which is one of the top five most-used websites in the U.S., is working to expand its ad business and capitalize on its large viewership and 16-minute average time users spend on the site, according to CNBC. Reddit detailed the types of ad inventory available on its site and advertisers shared with CNBC case studies from ad clients like Duracell, Toyota, Coca-Cola and JetBlue.
• The social site will reportedly offer a "top post takeover," where a brand's content appears on the site's front page for 24 hours with promoted ads and banner ads at the top and sides. The company will also launch special topics in relevant "subreddits," or page categories, so ads can be targeted to more specific audiences. A brand strategy team will write sponsored content in a "Reddit-friendly" style and tone to more strongly resonate with users. Brands will soon be able to promote an Ask Me Anything (AMA) on the front page and across the site.
• Reddit's revenue will top $100 million in 2018 for the first time, two people familiar with the matter told CNBC. Comparatively, Twitter had $655 million in ad revenue during Q1 alone.

Dive Insight:

With several unique marketing offerings, Reddit is clearly trying to lure more advertisers to the platform, which boasts more than 330 million monthly active users and 18 billion monthly page views. Along with its large following, Reddit also offers high engagement levels, with users spending more than 16 minutes per day on the site engaging with the community-focused subreddits, sharing articles and joining AMA conversations. In comparison, the average time spent on Twitter is six minutes and 10 for Facebook, signaling that marketers may be compelled to place ads where users are proven to be highly engaged.

Giving marketers the ability to promote an AMA and creating branded content in subreddits plays into marketers' continued interest in native advertising, which appeals to consumers because it closely resembles editorial or more natural, casual user-generated content. Native ad spending is projected to account for 58.3% of the digital display market, or $32.9 billion, this year, growing faster than the overall digital display space, eMarketer forecasts. Reddit's AMA is one of its most popular features, drawing celebrities and influencers, and thus, their large followings. For example, former President Barack Obama's 2012 AMA drew about 5.3 million page views, and Microsoft founder Bill Gates' recent sixth AMA was voted on by 105,000 users, according to CNBC.

One challenge that marketers face with Reddit is that much of the content on the site is self-moderated, with the company having little control over discussions or the ability to ensure brand safety. Marketers could run the risk of having their content appear alongside offensive or inappropriate posts, which could harm brand image.

As Reddit continues to ramp up its ad offerings, the company will likely need to address issues of brand safety and boost transparency on the platform. Last year, it partnered with Sprinklr to give brands listening and publishing access on the site, as well as benefits like customer care, engagement metrics, product development insights based on discussions, crisis communications and personalized marketing powered by data for stronger analytics.