AI at a Crossroads: Corporate Take up Collides with Dipping Consumer Trust

Styling itself as an “alternative to social media”, Reddit’s ad revenue is growing 3x faster than the wider social media market, thanks to its range of highly engaged communities and its deployment of AI to help advertisers reach them.

 

 

Reddit is the subject of WARC’s latest Platform Insights report. Subscribers can read the report in full, but here’s a whistle-stop tour.

 

 

Reddit ad revenue to top $1.8bn this year and grow to $2.5bn next year

 

 

 

 

• • WARC Media forecasts show Reddit’s ad revenue growing at +49.6% this year and +39.0% in 2026 – an impressive trajectory but still only a sliver of total social media adspend.

 

 

• • Its mid- and lower funnel revenue accounts for 60% of its total revenue, with top of the funnel brand advertising revenue growing the fastest rate in over three years, according to its Q4 2024 earnings call.

 

 

• • To attract advertisers, the company has strategically leveraged AI across its business, from AI-aided content moderation and translation, to AI content licensing deals. Its AI search feature, Reddit Answers, has quickly gained traction with one million weekly users in Q1 2025.

 

 

 

 

Reddit’s global ad reach is 606 million, edging closer to rival Snap

 

 

 

 

• • Reddit reported a 31% year-on-year increase in daily active unique users (DAUs) to 108.1 million in Q1 2022. The platform’s advertising reach has grown to 606 million users, surpassing X (586 million) and approaching Snapchat (709 million).

 

 

• • Its user base skews towards males (59.8%) but it has diverse age demographics, assisting its self-proclaimed positioning as a “source for knowledge” for all. Most users in the US are aged between 18-34 (41%), while those 45+ account for a third (34%) of users.

 

 

• • Reddit was one of Google’s top 20 search terms in 2024, and sixth in the last 90 days, according to CEO Steven Huffman. Users are often found to arrive via Google with a question in the hope of discovering an answer on Reddit.

 

 

 

 

Reddit advertisers benefit from highly organic and trusting engagement 

 

 

 

 

• • Reddit’s own data indicates that a quarter (25%) of posts are recommendation-related, where trusted users come to discover new products and inform purchase decisions; 43% of recommendation conversations involve users seeking new product options or alternatives.

 

 

• • Authentic brand participation on Reddit yields tangible results, with one weekly organic brand post increasing positive user mentions by 3.5%, while three meaningful comments under user posts can boost positive brand mentions by 2.2%.

 

 

• • Reddit’s AI investments are enhancing targeting and lower-funnel capabilities, with advertisers using both Dynamic Product Ads and standard conversion campaigns to achieve 2x higher return on ad spend (ROAS) in Q1 2025.

 

 

 

 

Why Reddit matters

 

 

Reddit’s latest MMM meta-analysis found that advertising on the platform delivers significant gains across full media plans. Reddit was found to be among the top two paid social platforms in efficiency, with 11% of impact from boosting other channels.