Reddit is in a standoff with some of its users. The platform announced plans to limit access to its API for third-party developers, charging for access to data.
The decision to charge is an effort to increase profitability for the platform, which is preparing for a potential IPO. However, the change could further derail the company’s ability to go public.
According to some volunteer moderators (who are critical to Reddit’s operating model), the change will price out third-party applications that help them facilitate conversations on the platform. In response, over 8k subreddits have become private since June 12, essentially going dark and causing a 6.6% traffic dip for the online forum.
A number of moderators planned to shutter their subreddits for two days, however, thousands of Reddit pages remain offline. Reddit’s CEO has continued to stand firm in the company’s decision to limit access to its API, leaving the end of the strike in limbo.
The events have already impacted Reddit’s reputation, the credibility of content on its forums, and trust with its user base. The company’s relationship with advertisers could be next.
How Advertisers Are Approaching the Reddit Blackout
Advertising is currently the primary revenue driver for Reddit, and if marketers move dollars away from the platform en masse, it could cause problems for the company’s bottom line.
Nearly 49% of Reddit’s traffic comes from organic search, and having a sizeable portion of content down can limit the reach of ads running on the site. With so many unknowns about the future of Reddit, and whether ads on the platform can produce a meaningful ROI, naturally, advertisers are raising concerns over running campaigns on the platform.
According to Digiday, some agencies have already begun shifting dollars away from Reddit in favor of platforms like TikTok, Instagram, Facebook, LinkedIn, and Quora. If the standoff continues, Reddit isn’t the only company that could lose ad dollars — the third-party apps that rely on its API could lose out on advertising revenue as well.
Marketers running advertising campaigns on these platforms should be closely monitoring performance, and the status of subreddits that are relevant to their core audience noting how campaign goals may be impacted.
It’s also worth mentioning that the dip in organic traffic to Reddit can impact organic traffic to other sites. For those who rely on subreddits to drive traffic and awareness to their sites and general campaigns, web traffic should be closely watched to account for any dips that could be attributed to the strike.
Ultimately, the events surrounding Reddit highlight the importance of having a diversified portfolio of advertising platforms and traffic sources to account for ongoing events beyond the control of marketers.
