What do advertisers need to know about the Reddit protest blackout?
Almost half of subreddits have gone dark in protest at API changes at Reddit. How should advertisers consider the move?
The protest has taken a number of the biggest subreddits dark for 48 hours / reddit
Over 40% of all Reddit’s boards – or subreddits – have undergone a self-imposed blackout in response to the social platform’s changes to API pricing. The self-organized and moderated subreddits chose to conduct a site-wide platform upon learning that the proposed changes would price out third-party apps that many used to navigate the site.
The developer of one of the most popular apps – Apollo – has estimated that it would need to charge users around £4 per month to keep the service alive.
Some of the biggest and most well-known subreddits, including r/todayilearned and r/gaming, have chosen to go private for 48 hours. Other tech-focused subreddits including r/apple – which has over one million members – went dark earlier as the scale of the changes became apparent.
For the users, the changes appear motivated solely by a desire for revenue, in line with similar changes imposed by Elon Musk’s Twitter. That perception was inflamed by an AMA (‘ask me anything’, a popular Q&A format on the platform) with Reddit CEO and co-founder Steve Huffman. He accused Apollo’s founder Christian Selig of “operating inefficiently and not being a good API user” in addition to stating “Reddit needs to be a self-sustaining business and to do that, we can no longer subsidize commercial entities that require large-scale data use”.
Over the past few years, Reddit has been making significant overtures to brands and advertisers. It has signed partnerships with brands including ITV and other huge entities, in addition to undertaking a campaign to ensure that the site is brand-safe in a way that it once was not.
This protest has the potential to demonstrate that its place in users’ hearts is conditional, and perhaps more importantly to demonstrate to advertisers that users do not consume its content in the context of the official Reddit app.
Callum Murphy is founder of specialist agency Make Us Care. He explains: “Finding the balance and strategy for keeping everyone happy is always going to be challenging, especially when the API costs are a new cost for developers who may not have the ability or business model to support the latest fees.
“From an advertiser’s perspective, the next few weeks will be very telling. As customers of Reddit, advertisers need a dependable platform that will do what it says it will do. Advertisers need to keep getting their message out there and if they heavily rely on Reddit as a channel, then they are going to feel this hard.”
The Drum has asked Reddit if advertisers will receive any refunds or discounts for the duration of the blackout. It had not responded at the time of writing.
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Analyst Alex DeGroote suggests that this is only the first example of Reddit working out its relationship between users, advertisers and revenue that we will see.
“The operating environment and monetization for most media and tech companies right now are challenging. In 2021, Reddit generated [around] $350m in revenue, primarily from advertising,” he said. “This will be under pressure. Ultimately, this is the start of a commercial negotiation process between Reddit and app developers".
He notes that one factor in the decision from Reddit’s point of view is the rise of AI. As LLMs are increasingly trained on data publicly available through APIs like Reddit’w, this is potentially driven by a desire to reestablish ownership of that data with an eye on future revenue.