Ripples Through Reddit as Advertisers Weather Moderators Strike

Over the past two days, more than 8,000 Reddit communities have restricted user access, making it harder for people to view or contribute content to a particular community, while more are encouraging a boycott of the platform.

These actions are in protest of a new policy that will charge third-party apps for the use of Reddit’s previously free API.

And advertisers, who are paying to reach these eyeballs, have felt knock-on effects, leading to holding campaigns, redirected impressions, softer metrics and more scrutiny of the benefits of the platform.

“After the blackout, we will be closely monitoring user behavior on Reddit and guide clients when we can unpause,” said Freddy Dabaghi, managing director at Stagwell-backed Crispin Porter Bogusky, which has asked clients to stop campaigns, depending on their client goals.

Dabaghi notes this pause will be shorter than more prolonged advertiser boycotts on Twitter and Meta. Still, Reddit has been working on its relationships with advertisers, and any accumulated goodwill could be diminished if the precarious situation continues.

Redirection and soft metrics

Moderators are protesting a new Reddit policy, starting July 1, charging third-party apps to use its API. Some of these apps, which help moderators manage and grow their communities, have said they will have to shut down because these charges make running their businesses prohibitively expensive. Currently, these protests are impacting a small percentage of Reddit’s more than 100,000 active communities.

On Monday, Reddit’s ad manager encountered a brief outage, during which buyers were unable to look at reporting statistics, even while impressions were still delivering, though the impact was fairly minimal, per four sources. (The Verge reported the moderator blackout crashed the site, although it’s unclear whether the crashes are related).

Reddit told advertisers that it was redirecting impressions lost from these blacked-out subreddits to the home page, as there has been an overall spike in traffic to the platform, according to a media buyer who was not authorized to speak on the communication.

“By directing ads that would have gone to the blacked-out [moderated] pages to the homepage is kind of defeating the point,” said Liam Johnson, senior account director at Brainlabs, who hadn’t seen that particular note from Reddit. “The ads would then just be shown to the masses and outside of any of the contextually relevant locations that advertisers are trying to achieve with Reddit.”

Advertisers can still target users according to interests and other contexts when they’re accessing the home page.

Campaigns have notched slightly lower impression delivery and consequently, slightly higher CPMs, over the days of the blackout, Johnson said. If the performance weakness continues for a week or two, the agency would start recommending decreasing spend with Reddit or directing it to other platforms. The moderator blackout is supposed to end Wednesday.

Effective CPMs were up about 1%-2% in the past two days, equivalent to a high-traffic day on the platform, said Darren D’Altorio, vp of paid social at Wpromote. Several other buyers told Adweek that they had not noticed a change in their Reddit CPMs.

Reddit’s CEO said the charge is partly to ensure large language models from firms like OpenAI and Google can’t access Reddit data without paying for it.

Notably, the policy would open up another revenue stream for Reddit, which has been exploring an IPO. Reddit has also been on a campaign to woo more advertisers to the platform, nabbing an exec from Meta to deepen ties with small businesses and international advertisers. It recently announced layoffs of 5% of its employees. Reddit did not immediately respond to a request for comment.

Brands go quiet

The moderator boycott is not only affecting auction dynamics but media strategy, as advertisers don’t want to appear tone-deaf during a contentious period for the platform.

Two Wpromote clients canceled two premium, takeover-style campaigns that were supposed to launch this week, and received make-goods for the impressions that had already been delivered, D’Altorio said.

[Advertisers] didn’t want to become the subject of users’ opinions about Reddit’s decisions.

—Anonymous media buyer

The campaigns will relaunch next week, while other standard campaigns remain unaffected, he said.

D’Altorio asked several clients to reschedule Ask Me Anything activations—where brands chat directly with their customers—as “we shouldn’t muddy the waters with our brand,” he said.

 The anonymous media buyer source said one campaign turned off comments on their ads today.

“They didn’t want to become the subject of users’ opinions about Reddit’s decisions,” the buyer said.

Accumulated goodwill

For years, brands have been wary of the platform due to Redditers’ hostility toward advertisers. But the platform’s recent outreach has helped shift that narrative, with several sources telling Adweek they’ve increased their investment with Reddit in the past few years.

“Where they are in their ads journey is really exciting for brands,” D’Altorio said. “It’s a way you can maintain your overall brand identity but take some cool, calculated risk.”

But if the blackout continues, Reddit’s recently accumulated goodwill with advertisers could quickly dissipate.

“It’s going to be a big turning point,” Johnson said. “They’re hoping for the easy option where everyone quiets down.”