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I've been thinking about this, too. If you have the right connections and can pull down a bunch of VC money year after year for your business it seems you could

I've been thinking about this, too. If you have the right connections and can pull down a bunch of VC money year after year for your business it seems you could go your entire career without having to generate profit!

jandrese 8y ago
It seems crazy to me that Reddit can't figure out a way to become profitable. Facebook is hilariously profitable on a fairly similar business model for example. It's not like Reddit is without ads, nor are they lacking in data they could sell (albeit not as high of quality as Facebook or Google). They even sell "Reddit gold" for real money. Maybe they have exceptionally high operating costs? Or are they just really bad at selling ad space? I get that there are some advertisers that don't want to go on there because they are afraid their ad will show up next to a picture of a naked lady (which is something Reddit could control pretty easily), but Reddit is so big that it seems pretty hard to ignore.
- cm2012 8y ago
  I can answer this as an advertiser. Most reddit users don't log in or subscribe to subreddits, and thus reddit has a very small targetable userbase. Like, if I want to serve an ad to business owners, I can serve it to subscribers to /r/smallbusiness but that audience exhausts very quickly. All of FB's users are logged in and can be targeted by interest.
- nopriorarrests 8y ago
  Consider a few cases. - you want to advertise B2B software to small/medium business owners. - you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT. Will you pick FB or reddit? And then yes, lack of brand safety for non-targeted ads.
  - YeahSureWhyNot 8y ago
    genuine question. is reddit good place to advertise a B2B software? my startup offers B2B warehousing/ecommerce solution and I never thought about reddit in that way even if I visit its front page daily.
    - taurath 8y ago
      You might get some brand awareness if you target specific subs (devops, etc), but I'd imagine the decisionmakers in companies that need what you're providing are not spending their time on subreddits, and the non-decisionmakers probably have adblocking on. Thats just my perception though - also that reddit as a whole is very lowest common denominator tech/business wise.
  - jandrese 8y ago
    Can you not pick specific subreddits to advertise in (or have your ad appear next to on the home page)? Seems like your userbase self-segments pretty quickly on Reddit, although it's no doubt a fulltime job for several engineers to keep up with the classifications on subreddits. I guess the biggest problem is that so many users don't log in and just browse the default, which is pretty generic. Reddit could track the not-logged-in users and what they click on like Google, but that's a fair bit more work.
    - nopriorarrests 8y ago
      How efficient are subrrddits compared to always logged-in audience which told you their age, interests a location, explicitly? Rethoric question.
    - stevekemp 8y ago
      Yes, you can target subreddits. I used to post my DNS-host (dns-api.com) on /r/sysadmin, for example.
  - toomuchtodo 8y ago
    > you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT Instagram, every day of the week.
- i_am_nomad 8y ago
  Reddit seems to have a huge but very fragile audience. Monetizing the site would introduce changes that might drive off the users much the way Digg did.
- sotojuan 8y ago
  reddit ads aren't very profitable as most of the userbase is probably logged out or just goes to /r/all. reddit also houses tons of NSFW and controversial content which probably scares some companies away, even if their ads won't show up there.
- milquetoastaf 8y ago
  Reddit's data isn't that valuable (as you cannot key it back to a real human), a huge swath of their users adblock, and it has tons and tons of pornographic content which - and i do not necessarily agree with - will lower ad values. The current path to monetization Reddit is trying is making their data more valuable via more detailed user profiles and chats, essentially creating a pseudonymous social network and hoping itll take off like FB. However, I think the real money would be for them to be more like Craigslist. Subreddits could pay to upgrade to become more feature-rich "Classified"-like pages whose posts could then be further boosted (re: upsell for ad team) across other subreddits. Users react with hostility to forced social media / redesigns geared to ad revenues. They like new features that are actually useful and enhance the experience.

jandrese 8y ago

It seems crazy to me that Reddit can't figure out a way to become profitable. Facebook is hilariously profitable on a fairly similar business model for example. It's not like Reddit is without ads, nor are they lacking in data they could sell (albeit not as high of quality as Facebook or Google). They even sell "Reddit gold" for real money. Maybe they have exceptionally high operating costs? Or are they just really bad at selling ad space? I get that there are some advertisers that don't want to go on there because they are afraid their ad will show up next to a picture of a naked lady (which is something Reddit could control pretty easily), but Reddit is so big that it seems pretty hard to ignore.

cm2012 8y ago
I can answer this as an advertiser. Most reddit users don't log in or subscribe to subreddits, and thus reddit has a very small targetable userbase. Like, if I want to serve an ad to business owners, I can serve it to subscribers to /r/smallbusiness but that audience exhausts very quickly. All of FB's users are logged in and can be targeted by interest.
nopriorarrests 8y ago
Consider a few cases. - you want to advertise B2B software to small/medium business owners. - you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT. Will you pick FB or reddit? And then yes, lack of brand safety for non-targeted ads.
- YeahSureWhyNot 8y ago
  genuine question. is reddit good place to advertise a B2B software? my startup offers B2B warehousing/ecommerce solution and I never thought about reddit in that way even if I visit its front page daily.
  - taurath 8y ago
    You might get some brand awareness if you target specific subs (devops, etc), but I'd imagine the decisionmakers in companies that need what you're providing are not spending their time on subreddits, and the non-decisionmakers probably have adblocking on. Thats just my perception though - also that reddit as a whole is very lowest common denominator tech/business wise.
- jandrese 8y ago
  Can you not pick specific subreddits to advertise in (or have your ad appear next to on the home page)? Seems like your userbase self-segments pretty quickly on Reddit, although it's no doubt a fulltime job for several engineers to keep up with the classifications on subreddits. I guess the biggest problem is that so many users don't log in and just browse the default, which is pretty generic. Reddit could track the not-logged-in users and what they click on like Google, but that's a fair bit more work.
  - nopriorarrests 8y ago
    How efficient are subrrddits compared to always logged-in audience which told you their age, interests a location, explicitly? Rethoric question.
  - stevekemp 8y ago
    Yes, you can target subreddits. I used to post my DNS-host (dns-api.com) on /r/sysadmin, for example.
- toomuchtodo 8y ago
  > you want to advertise expensive fashion items to 20-35 y.o. women in NY/CT Instagram, every day of the week.
i_am_nomad 8y ago
Reddit seems to have a huge but very fragile audience. Monetizing the site would introduce changes that might drive off the users much the way Digg did.
sotojuan 8y ago
reddit ads aren't very profitable as most of the userbase is probably logged out or just goes to /r/all. reddit also houses tons of NSFW and controversial content which probably scares some companies away, even if their ads won't show up there.
milquetoastaf 8y ago
Reddit's data isn't that valuable (as you cannot key it back to a real human), a huge swath of their users adblock, and it has tons and tons of pornographic content which - and i do not necessarily agree with - will lower ad values. The current path to monetization Reddit is trying is making their data more valuable via more detailed user profiles and chats, essentially creating a pseudonymous social network and hoping itll take off like FB. However, I think the real money would be for them to be more like Craigslist. Subreddits could pay to upgrade to become more feature-rich "Classified"-like pages whose posts could then be further boosted (re: upsell for ad team) across other subreddits. Users react with hostility to forced social media / redesigns geared to ad revenues. They like new features that are actually useful and enhance the experience.