Reddit is increasingly using the conversations going down across its communities as signals for ad targeting, campaign optimisation, creative development, and commerce promoting. Its promoting systems use user-interest modelling, content understanding, and real-time behavioural signals to determine which ads are relevant in numerous contexts.
The company generated $762 million in promoting revenue throughout the second quarter of 2026, up 64% from a yr earlier. Total revenue reached $805 million, a rise of 61%.
Reddit also reported that its variety of energetic advertisers increased about 70% yr over yr. Chief operating officer Jen Wong told Reuters that growth was particularly strong amongst mid-market businesses, small and medium-sized businesses, and advertisers outside the US.
Reuters reported that Reddit’s AI promoting tools include features for generating Reddit-specific ad copy and targeting users based on communities inside subreddit discussions. It also reported in April that performance promoting accounted for greater than 60% of Reddit’s promoting revenue.
Turning conversations into ad signals
Reddit’s promoting strategy is increasingly tied to the conversations going down inside its communities. Discussions can include product questions, comparisons, recommendations, complaints, and first-hand accounts from individuals who have used particular services or products.
Reddit reported a 40% year-over-year increase in what it classifies as high-intent shopping conversations in March 2026, based on its Community Intelligence data covering activity in 2024 and 2025. The company is using that activity alongside conventional signals similar to previous clicks, product views, and interactions with advertisers.
Its Dynamic Product Ads can retarget people based on products they previously viewed or interacted with on an advertiser’s website. Prospecting campaigns may also use activity on Reddit and advertiser web sites when choosing products.
Reddit said in June that its promoting platform uses deep-learning architectures, user-interest modelling, content-understanding techniques, and real-time behavioural sequences when choosing ads. These systems consider each user interests and the context of the content being viewed.
Shopping Listing Ads provide one example of how Reddit is applying conversation context to promoting. The format, currently in alpha, matches products from participating advertisers with the context of individual Reddit conversations and presents relevant products in a carousel.
Multiple advertisers can appear inside the same placement, with product selection based partly with reference to the discussion.
AI moves deeper into campaign execution
Reddit can be using community information within the creative side of promoting campaigns. Its Tailored Creative Assets feature uses AI to discover relevant Reddit communities and audience personas before proposing headline and image variations.
The feature is on the market inside Reddit’s Max campaigns and is designed to adapt existing advertiser assets to different audiences and community contexts. A separate Free-form ad generator, currently in beta, combines information from an advertiser’s website with related Reddit content when creating advertisements.
Redditor Highlights, which became generally available this yr, lets eligible advertisers embed summaries of relevant Reddit discussions and organic posts into advertisements. The format can include a summary of what users are saying a couple of product or brand alongside a carousel of related posts.
Reddit said awareness campaigns using Redditor Highlights recorded a mean 10.7% increase in click-through rate. The performance figure comes from Reddit’s own campaign data somewhat than an independent study.
The company can be automating more campaign decisions through Reddit Max. Max campaigns use AI to adjust campaign settings for individual impressions, including automated targeting and inventive asset rotation.
Reddit said 16 split tests conducted between January and April 2026 found that Max app campaigns produced a mean 15% reduction in cost per acquisition and a 28% increase in result volume compared with advertisers’ existing campaigns using similar targeting and inventive.
The variety of advertisers using Max grew greater than 60% sequentially throughout the second quarter, while revenue generated through Max increased greater than 150%, according to Reddit.
The company is extending machine-learning optimisation beyond campaign setup and ad selection. Its App Event Optimization product uses in-app event signals to optimise campaigns for actions beyond an initial installation, including account registrations, trial starts, and purchases.
Reddit said the system recorded a mean 22% improvement in cost per acquisition during its beta phase. It uses post-install conversion events as additional inputs for campaign optimisation somewhat than focusing only on app installs.
Reddit began beta testing Dual Attribution for app advertisers in May. The system places Reddit’s first-party attribution data alongside reporting from mobile measurement partners and Apple’s SKAdNetwork inside Ads Manager.
“With dual attribution, we mix our first-party attribution signals with existing mobile measurement partner signals to improve our ML models, campaign optimisation, and advertiser outcomes,” Wong said throughout the company’s earnings call.
Reddit said the combined signals are used for advertiser reporting, machine-learning models, and campaign optimisation.
The company can be applying community data to product discovery. In February, Reddit began testing a shopping experience within the US that identifies products being discussed inside chosen conversations.
Tapping a highlighted product opens an AI-generated summary of Reddit discussions alongside direct quotes about that product. When a participating business has supplied product catalogue data, the interface may also display a picture, price, and link to purchase from the brand or retailer.
The initial test covers categories including electronics, video games, and health and wonder products. The feature links products mentioned in Reddit conversations with AI-generated discussion summaries and merchant catalogue information.
Reddit has also expanded its commerce infrastructure through Shopify. Its integration allows participating merchants to connect product catalogues and promoting measurement with Reddit.
The company made its Shopify integration generally available in May after initially introducing it in alpha in March. The connection automates catalogue and pixel setup for merchants using Reddit’s Dynamic Product Ads.
Reddit’s March data showed high-intent shopping conversations had increased 40% yr over yr. Its newer promoting products use community context at different stages of the campaign process, from product selection and inventive development to targeting and campaign optimisation.
Shopping Listing Ads use discussion context to select products, while Tailored Creative Assets use community information during creative development. Redditor Highlights incorporate community posts into ads, and Max automates campaign decisions.
Conversion volume across Reddit promoting increased greater than 100% yr over yr throughout the second quarter, while click volume rose greater than 30%. Video promoting revenue, which Reddit classifies as an upper-funnel objective, greater than doubled over the identical period.
The platform accommodates billions of posts and comments spanning communities organised around products, hobbies, industries, locations, and other interests. CEO Steve Huffman has tied that content to Reddit’s strategy as generative AI produces more material across the broader web.
“As the web becomes more automated, the worth of authentic human conversation continues to rise,” Huffman said.
(Photo by Brett Jordan)
See also: ChatGPT ads test a brand new model for conversational promoting
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