As Reddit grows in popularity and recognition throughout the English-speaking world and beyond, more people are looking to explore the potential of advertising on the site, its front page, and various subreddits.
With a reputation as one of the modern internet’s nerve centers, and as a center of gravity for online culture, Reddit had more than 1.5 billion unique visits from mobile and desktop users in September 2017 alone. Just under half or 43% of visitors came from the United States alone. So roughly 750 million unique visits are being made to Reddit every month.
Those are a lot of eyeballs and there is a lot of potential to draw their attention to Reddit ads for your product or service, or whatever else you want to promote.
But how much does it cost? To answer that, we should go over the basics of how the Reddit advertising system works. It’s simple enough, although it has recently undergone fundamental targeting changes, with the result being that overall costs will go up. In any case, your campaign is one promotion and its respective targeting.
You can target specific subreddits, locations (at the country level and, within the US, at the city level) and best times of day, platforms (desktop, mobile, or both) and interests. You also set your campaign schedule and your budget. In regards to the former, you can set it to run continuously until you end it, or set start and end dates.
Reddit CPM & Your Reddit Advertising Budget
Your budget setup consists of your CPM bid – anywhere from $0.20 to $100 are accepted values. That bid is the maximum amount you are willing to spend on your ad to receive 1000 views.
Usually, you’ll pay less, since if you win the bidding for the “inventory” – the ad space on the subreddits you’re targeting – you’ll pay whatever the second-highest bidder pledged, plus one cent. So if you bid $30, but your competitor bid $25, the amount you’ll pay for 1000 views – your CPM – will be 25 dollars and 1 cent.
You can also set the amount you are ready to spend daily or the lifetime budget of your campaign. You can either choose to spend a maximum of $40 daily (although in the past you might not ever have hit that cap due to insufficient visitors to your targeted subreddits, recent changes make reaching a daily cap much more likely) or $40 over the course of your whole campaign.
The minimum amount for a campaign is $5 per day, but the real spend can be up to 20% higher, so take that into consideration when planning your budget.
And that’s it. The rest – how much you spend – is really up to you.
The New Ad Targeting System
Except – it would be it, if the old targeting system of Reddit – that is, what is called a “contextual” targeting system – was still in place. But since September of 2017, the Reddit targeting system has changed.
It is now behavioral, and the distinction is making a big difference in how fast those views are reaching those eyeballs and what kind of eyeballs they are reaching. And on the bottom line, it determines how fast your ad budget spends itself and what kind of returns it produces. What would you say if your CPA – your cost per acquisition – went from $10 to $100?
That’s what happened to a small business owner who sold a small food product with decent, but not extravagant, margins – jerky. Whereas previously the Reddit advertising targeting system had been “contextual category”-based, it was now being changed into a “behavioral” one. Contextual category systems target advertising at websites and pages themselves. In Reddit’s case – the subreddits.
You could set your ad to target only the r/jerky subreddit, and the only people who would see it would be the people who were visiting the actual subreddit when they were visiting the subreddit. So your ad would appear to people interested in jerky when they were visiting a discussion board about jerky.
This could result in high interest and good click-through rates. Marketers who understood how to target in this way could get very good returns on their investment.
But Reddit changed. Now the advertising system targets users, and not the pages (subreddits.) It’s behavioral. What that means is that now, the same jerky ad will appear to people who have visited the r/jerky subreddit in the past.
See the difference? Your ad will appear to someone browsing, for example, r/physics because they have visited the r/jerky subreddit at some point in the past. You’ll reach 1000 views in a heartbeat, but jerky might not be relevant or interesting to those people at all at that time.
Professionals consider behavioral targeting systems to be much better, overall than contextual category systems. That is due to the detailed, granular targeting options it provides. Being based on the dynamic data and search histories of individual users, instead of relatively static web pages, is what makes this possible.
However, Reddit’s targeting system isn’t very well developed at the moment.
The Changes to the Bottom Line
That above-mentioned jerky seller found that his cost-per-acquisition went up tenfold. And if you’re considering getting into Reddit advertising, or are already working in that field, be sure to take this into account. Reddit ad campaigns have become more expensive.
They might provide you with better targeting options in the future, too, but the only thing that is certain is that the “old way” of advertising on Reddit is gone, along with the old prices. If you want to read another article about how to advertise on Reddit, click here to find out more.
Despite the changes made to the way Reddit’s ad targeting system works that has led to many marketers experiencing higher costs per acquisition, you shouldn’t give up on the site. Reddit is still a unique place and can truly be called “the front page of the internet.”
It’s a tough nut to crack, but if you manage it, the rewards can be and usually are great. Good luck!