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Reddit has started testing advertisements in its search results as the social media platform faces declining search traffic and concerns over future growth. The company announced the initial trial on Tuesday, November 3. The move will allow a selected group of advertisers to display promotions when users search for products, recommendations and other information on Reddit.
The new format could help Reddit earn more from its existing audience. The company is looking for additional advertising opportunities as referrals from Google search continue to weaken.
Reddit said advertisements may appear according to several factors, including how closely they match a user's search. The current trial involves a limited group of eligible advertisers.
“Ads in search may appear based on a range of factors, including contextual relevance to a user’s search query,” Reddit said in its announcement.
The company also explained that it would study user responses before making changes to the advertising format. For example, someone searching for an espresso station could see advertisements for coffee machines, mugs and coffee products. A search for a home office setup could display promotions for desks, monitors and office chairs.
The trial comes as Reddit faces changes in how people discover online content. Google's AI-powered search features now provide more answers directly on its results pages. This reduces the need for users to visit external websites, affecting traffic referrals to platforms such as Reddit.
Reddit's latest financial results also highlighted challenges in its business outlook. The company reported third-quarter revenue and earnings above Wall Street estimates. However, its shares fell after it issued a weaker-than-expected forecast for the fourth quarter.
Reddit expects revenue between USD 1 billion and USD 1.03 billion, below analysts' expectations of USD 1.05 billion. The company also reported 130.3 million global daily active users in the third quarter. This figure was unchanged from the previous quarter. Daily active users in the US fell to 50.7 million from 53.2 million in the second quarter.
Reddit has also announced plans to gradually shift towards a logged-in user experience, starting with markets outside the US. The move could help protect content from unauthorized AI scraping and provide advertisers with better information about user interests.
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