“Sociable” is the newest commentary on vital social media developments and trends from industry expert Andrew Hutchinson of Social Media Today.
Reddit has shared its latest performance update, covering Q4 and the complete 12 months for 2024.
And the numbers are looking good for the app, with its enhanced business focus driving higher revenue, while its energetic user count also continued to climb within the last section of the 12 months.
First off, on users, Reddit is now as much as 101.7 million every day energetic users, up 3.5 million on its Q3 result.
That, comparatively, continues to be a much smaller overall audience than the opposite major social apps. But Reddit’s strength stays in contextual discussion, and focused relevance, with Reddit noting that 40% of web users consider recommendations on Reddit to be essentially the most influential consider their purchasing decisions, surpassing expert reviews.
Which seems high, but the purpose is Reddit provides real, human, knowledgeable insight into a variety of topics, including products, and that could make it a useful outreach tool for brands, when used right. And with more ad options aligning with this, together with improved targeting, there might be value in Reddit ads.
The only negative here is that every one of Reddit’s growth is coming from outside the U.S., where it actually lost users within the quarter. Which is a priority because Reddit makes most of its money from U.S. ads.
Though, at the identical time, Reddit is rationalizing and capitalizing on its U.S. audience, so it’s still making quite a bit extra money over time. But it’ll have to focus on constructing its business outside the U.S. to maximise is opportunities.
In terms of revenue, Reddit brought in $428 million for the quarter, up 71% year-over-year.
Most of that was driven by the gradual expansion of Reddit’s ads business, which continues to deliver results for a growing range of ad partners.
Growth has been helped by latest analytics and insights tools, like Reddit’s latest “Reddit Pro” dashboard, which enables marketers to explore trending topics within the app.
Reddit Pro provides data in your post and comment performance, while also supplying you with easy accessibility to trend insights, so you may tap into the newest, most relevant discussions within the app.
And that’s driving more advertiser interest, with Reddit reporting that brands using the app have created 12% more content based on those insights.
Reddit also highlights its “Ask Me Anything” ads as one other key development, while its automation and AI options are also driving more value.
Reddit also says that its efforts to extend accessibility, through improved language translation tools, have also helped to drive platform growth.
“We made meaningful progress improving our ML models to make the house feed and search results more relevant and translating content for global audiences with Machine Translation (‘MT’) MT drove between 40-50% of international user growth in Q4 and our international playbook is driving community engagement in our focus countries.”
Which, again, is where Reddit is seeing more usage, and it’ll be interesting to see the way it looks to construct on that with an expanded international ad push. Because that costs money, and Reddit’s costs are already rising, because it continues to take a position in its own AI and machine learning models to lean into trending and improved experiences.
Reddit also notes that it saw some impacts on its Search referrals in Q4, though they’ve been mostly corrected:
“Later in Q4, we experienced some volatility with Google Search triggered by a periodic algorithm change, but traffic from search has recovered to this point in Q1, and we’ve regained momentum. What happened wasn’t unusual – referrals from search fluctuate once in a while, and so they primarily affect logged-out users. Our teams have navigated quite a few algorithm updates and did a wonderful job adapting to those latest changes effectively. This particular swing was interesting, though, because we saw a corresponding increase within the query term ‘reddit,’ which suggests users are searching with the precise intent of reaching Reddit, and this propensity continues to rise.”
That sort of seems to suggest that Google is restricting searches that include the term “reddit,” and it’s value noting that Google does have a deal in place to include Reddit data into its Search and AI results. That could mean that Google’s now surfacing more Reddit insights direct within the SERP, via its latest AI overviews.
And if that’s the case, I’m wondering how Reddit will reply to Google corralling its traffic via this method.
Overall, it’s a superb report for Reddit, showing regular progress and development of its various elements. Though it is going to be difficult for Reddit to take care of its AI momentum, given rising costs, and it’ll be interesting to see the way it plans to contend with Google using its insights in its own products, especially given how significant Google Search traffic has been for its growth.
Essentially, Reddit’s putting loads of reliance on that trendline continuing to rise, and if it slows, because it did in December, that’ll put a dent within the platform’s broader growth story, and potentially, the market’s optimism for its future.
Which signifies that it must be certain that that it’s getting cash where it could possibly, and as such, expect to see Reddit making a much bigger push on ad sales in international markets in 2025.
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