Are Reddit Ads Effective and Worth It for Lead Generation?

The internet is a battleground, and one of the biggest wars being waged is the war between advertisers and users.

As a business owner, ads are kind of a necessary evil. They're still useful and an important channel for building awareness, generating leads, and seeking conversions.

As an internet user, ads are horrendously disruptive, a vector for malware and scams, and – despite decades of information harvesting to tune algorithms – still more often wildly untargeted than not.

Of course, talking about "ads" as if they're one monolithic thing isn't really accurate or useful. Ads take all kinds of different forms and range from highly targeted, barely noticeable recommendations to the digital equivalent of an air horn going off in your face.

Where do Reddit ads fall on this scale?

How Reddit Ads Work

To discuss the potential effectiveness and value of Reddit ads, it's worth going over how they work first.

Reddit ads are all basically different forms of organic posts on Reddit. They show up just like normal posts, in Reddit's feed, or as a sort of unrelated top comment on posts. They come in formats like free-form, image, video, and carousel, which are all just different forms of posts with different kinds of media (or no media, in the first one) attached. Reddit is also rolling out product recommendation ads, as well as promoted AMAs and high-cost, high-value "takeover" campaigns.

For the most part, I'm going to focus on the basic text/image/video post-style ads. Things like takeovers are very expensive and are a whole different beast, and I'm going to go out on a limb here and assume that the brands with millions to spend on Reddit-wide takeovers are probably not reading my blog for advice on whether or not they're any good. Though, hey, if you are? My contact info's in the nav bar; drop me a line.

Reddit ads have a few targeting options, but since Reddit isn't the kind of social network that scrapes every last iota of personal information from a person the way something like Facebook is, some of that information is limited. Targeting options include:

• Location, for geographic targeting primarily based on the IP address of the user.
• Interest, which is largely reflective of the kinds of communities the user browses and participates in.
• Subreddit, which puts your ads in specific subs.
• Demographics, which are your basic age, gender, and other characteristics, though these may not be wholly accurate.
• Keyword, which is typical for ads.
• Contextual, which is like a keyword target but potentially more flexible but maybe less relevant.

Reddit offers ads for CPC, CPM, and CPV (for video) models. Generally speaking, CPC is going to be the most reliable, so that's largely what I'll focus on.

The Ad Blocker Issue

Something that it's worth discussing is the ad blocker issue.

Ad blockers are growing more and more prominent, whether it's network-level, device-level, or browser-level. Google made a change to Chrome that broke the biggest ad blocker, and a new version that worked was available within 24 hours. Tech-savvy people are very much on top of blocking ads as much as they can.

Since Reddit is more skewed towards tech-savvy millennial-and-younger sorts, wouldn't most of them be blocking ads? Therefore, running ads on the platform would be less useful than running ads on another platform where less savvy users are found.

The truth is, a lot of what I just said are assumptions that aren't actually correct. Reddit definitely started as a much more tech-savvy population, but now that it has nearly a billion monthly users, it's dramatically less so. Same with other demographic assumptions. While 44% of Reddit users are under the age of 30, that's less than half. Also, a ton of Reddit users are using the app, where ad blocking is much, much harder.

Ad blocking is also maybe less prevalent than some of us would hope/fear. It has about 25% global penetration, but only around 400 million desktop users using it.

In short, while ad blocking definitely hinders your ability to reach certain groups of people and certain demographics, it's not an insurmountable problem.

The Benefits of Using Reddit Ads for Lead Generation

Using Reddit ads for lead generation has some benefits, particularly over a lot of other social networks.

You can target very niche communities.

Reddit, being divided into subreddits centered around interests, locations, topics, and even individuals, allows you to be surprisingly precise in how you target your ads. With ads on something like Google or Meta, you would have to layer six or seven different targeting options to target a niche community you can reach entirely just by targeting one subreddit.

Some people only think of Reddit as the front page, r/all. You'll see a lot of the biggest subreddits there, things like r/cute and r/technology and r/news and r/business, but that's just the largest buckets.

But say, maybe, you sell strange denim apparel. You could advertise on r/sweetjeans, which has 300-odd members. Or maybe you have an ironic line of dog apparel and think reaching the 60,000 people at r/dogshowerthoughts would be great. Or maybe you're in security (physical or digital) and want to hook the people who use the CH751 key to explore the world around them by advertising on r/ch751.

The point is that there are a lot of niche communities about very specific topics, and if you can figure out a compelling way that you're relevant to that topic, the alignment can be very good for your conversion rates.

The ads are generally pretty cheap.

For a site with as many users as it has, Reddit is surprisingly cheap.

For comparison:

• Google Ads CPC averages around $2.69 for search ads and $0.63 for display ads.
• Facebook Ads CPC averages around $3.77.
• Reddit Ads CPC averages somewhere between $0.50 and $4.00.

There are certainly cheaper ways to advertise and also much, much more expensive ways to advertise. If you're looking to reach a social and engaged audience, though, Reddit is a fairly cheap way to go about it, especially for the kind of placements you get.

Reddit ads are extremely native.

The distinction between non-native advertising and native advertising is important. Ads that just slap a banner on the header or in the sidebar of a site are easily ignored. Ads that look more or less just like normal posts are much more attractive. People don't ignore them out of hand, and banner blindness doesn't affect them.

Reddit's ads stand out a lot of the time because the big names like Adobe or Hims/Hers or whichever other brand do broad-spectrum, untargeted ads and come across as disruptive. A lot of other ads appear much more subdued, and the only indication that they're even ads is the small "promoted" next to them.

I consider myself very savvy about ads online, but just scrolling through Reddit without an ad blocker, a lot of ads don't register as ads right away. It's only when an ad stands out as unrelated to the subreddit that it triggers the dissonance that flags it as an ad.

To use an example, as I write this post, I scrolled through r/gifs for a bit. Ads stand out there because – get this – they aren't gifs. A carousel ad for a car detailer doesn't fit. If they had put in a gif of their process, it might have fit right in, and I never would have clocked it. Similarly, scrolling down r/cute, the posts about cute cats and dogs are interrupted by an ad for Gatorade or Mountain Dew, using very much not cute pictures.

You can tell the big brands don't do narrow targeting, but if they did, maybe they'd fit in better and get more attention.

All of that sounds great, so what's the catch?

The Downsides of Using Reddit Ads

I figure there are some pretty strong downsides to Reddit ads. I also figure they're avoidable, but a lot of the big brands don't avoid them, and it makes ads look worse for everyone.

You really need to understand Reddit culture.

Reddit is one of the most deeply engaged online communities still around out there. It hasn't been algorithmed or gamified to within an inch of its life, and while there are definitely signs of the impending enshittification of the platform, it's kind of been that way for a decade.

The biggest example is what I've already pointed out: brands advertising in subreddits where their posts stand out as very clearly not what the sub is about. People scrolling through a feed of cute puppies being slammed in the face with a sexual wellness pill ad are understandably going to react poorly.

Reddit users are also generally very sensitive to outsider intrusion. Anyone breaking the norms of a sub – and those norms can be inscrutable if you haven't spent time there – can be ostracized well beyond the impact of a failed ad. Running a bad ad can damage your brand in ways that go beyond the borders of Reddit.

It's hard to scale up ads on Reddit.

For much the same reason, there's only so much value you can get out of Reddit ads before they backfire.

Normally, on a social network or an ad channel like Google, you can rely on algorithms to help you promote to a certain saturation point and get cut off when the response starts to drop. On Reddit, when you reach that tipping point, there's nothing to cut you off; it just starts to backfire.

You also can't just dump more money into ads to get more results if you're targeting niche communities. If you go to advertise on that subreddit with 300 members, you aren't going to magically pull out 1,000 impressions because you put more money into it.

This is why you get Mountain Dew ads in r/cute; they want to dump money into impressions and not care about where they come from. It doesn't work.

"Not bad" doesn't mean good

A lot of what I've talked about so far is just the barrier to entry. Getting ads to match the place they're displayed and not immediately trigger backlash is the starting point. You still have to put in the work to come up with ad copy that hooks people and brings them in as leads, and that can be a tall order when you're working on a relatively micro scale.

I think Reddit is a lot better for small and mid-sized businesses than it is for large brands since they can wield smaller budgets with more precision and are already expecting to be doing the micro-optimizations Reddit asks of you.

Tips to Use Reddit Ads Effectively

Are Reddit ads useful for lead generation? They can be. It all depends on how well you use them and how willing you are to do the work to make them work.

Figure out your audience.

The biggest benefit of Reddit by far is how deeply you can target specific communities, interests, and groups.

Be very precise with your targeting and find communities that match, and you can get a huge return on your ads. Get the targeting wrong, and you'll have nothing to show for your expense.

Be authentic and conversational with your ads.

Since Reddit ads are basically promoted posts, you need those posts to come across as much like an organic post in the place it's shown as possible. Conversational language that fits in with the community is an absolute must.

I also highly recommend you be careful with your format. The example above of the carousel ad in r/gifs stands out in a bad way.

Don't expect one massive campaign.

The biggest advice I can give is to think about Reddit ads as a lot of small campaigns, not one big one. The more you can break up and narrowly target your ads, the better off you'll be. Don't expect to pour one big bucket of money on one ad and have it work. Yes, it's more work to target the ads individually, but the returns will be worth it.

All of this is my experience and my impressions. Do you have a different point of view? I'd love to talk about it, so let me know in the comments or drop me a line.