Mark Ritson: Marketers can no longer afford to laugh at Reddit

Final week, Reddit reported its Q1 numbers. Income of $663m, up 69% year-on-year. Promoting income of $625m, up 74%. Each day lively uniques of 126.8m, up 17%. The corporate has now strung collectively 5 consecutive quarters of promoting progress above 70%, towards a digital advert market that the key holding corporations describe, with the weary euphemisms of previous males in bogs, as “softening”.

Whereas the advertising world spent the final 12 months arguing about whether or not ChatGPT will eat its CPMs, whether or not Unilever’s Fernando Fernandez has reinvented the wheel by attaching a creator to it, and whether tariffs will or won’t depress consumer spending, essentially the most consequential platform shift in promoting has quietly compounded within the nook of the room. Reddit is now a $2.6bn-a-year advert enterprise, rising quicker than another significant platform within the western world. 

Nobody ought to be laughing any extra.

In February, the analytics agency Fospha revealed its State of Retail Commerce 2026 report, drawing on a 12 months’s price of marketing-mix-model knowledge from its retail commerce shoppers. The headline discovering, buried inside a perfectly overcomplicated report preoccupied with Efficiency Max, was a quiet bombshell. When Fospha attributed cross-channel gross sales correctly, that’s, when it accounted for the truth that somebody studying a Reddit thread about which espresso machine to purchase would possibly, two days later, full the acquisition on Amazon, Reddit’s ROAS jumped 82%. 

Eighty-two %. 

The platform that everybody was allocating crumbs to, on the idea that its stock was immeasurable and its viewers uncommercial, turned out to be a hidden engine of big retail demand.

Fospha’s modeling went additional. 

Income influenced by Reddit, throughout its retail shopper base, grew 257% year-on-year in 2025. The Occasions reported in March that its checks of Reddit’s new AI-based “Max” marketing campaign software confirmed conversion charges doubling in contrast with previous Reddit benchmarks. Reddit’s personal knowledge, which I deal with with the suitable skepticism reserved for all first-party tech disclosures, shows 11 of its top 15 industry verticals rising advert spend by greater than 50% year-on-year. Worldwide advert income grew 76%. The platform now reaches roughly 60% of the UK’s web inhabitants. Reddit is quickly changing into a fixture of the MOFU a part of the media plan.

The pure response, particularly in case you are a CMO who has spent 5 years not shopping for Reddit, is to imagine you have got been lacking one thing. You have got. However the causes are attention-grabbing, and barely much less apparent than they appear.

The primary purpose is structural and barely embarrassing for the remainder of us. Reddit was all the time going to be a superb intent platform. The location is, at its core, an unlimited community of category-specific communities, greater than 100,000 of them on the final public rely, during which individuals who care rather a lot about one thing discuss to different individuals who additionally care rather a lot about that factor. In media-planning phrases, a subreddit devoted to mechanical keyboards is what would occur if a press launch, an NPS report and a focus-group transcript had a child. The viewers is interest-led, self-selecting and disclosing its buy consideration in actual time. 

That’s no media downside; that’s a media planner’s moist dream. 

The rationale manufacturers ignored it for thus lengthy is that it didn’t appear to be the opposite locations the model purchased, and model consumers, as a category of human, are about as intellectually adventurous as a pigeon at a marriage.

The second purpose is more moderen and extra oblique. Reddit is now the connective tissue of the AI search period. All through 2024 and 2025, whereas everybody was debating whether or not ChatGPT would commoditize CPMs, OpenAI, Anthropic, Google’s Gemini, and Perplexity quietly turned a few of the largest shoppers of Reddit content material on the planet. 

Whenever you ask a chatbot which noise-cancelling headphones are finest for airplane journey, what essentially the most dependable used Toyota is, or whether or not a selected skincare model is overpriced, and these are precisely the questions shoppers are actually tapping into their AI instruments as a substitute of asking Google, the reply is derived, in important half, from Reddit threads. Reddit signed a significant content material licensing take care of Google in 2024 and an analogous association with OpenAI shortly afterward. The result’s that Reddit influences buy choices on each AI floor you and your prospects contact. And really continuously, it does it each methods, instantly and not directly, for a similar buy. 

Affect, in different phrases.

That is the place the image turns into genuinely uncomfortable for the orthodox media plan. For 20 years, entrepreneurs have organized their pondering round a Meta-Google duopoly, often tossed a number of quid at TikTok, and handled every part else as a rounding error. The unstated assumption was that scale beat specificity. You acquire attain the place it was least expensive, you measured what was measurable, the measurement was executed by your Large Digital Associate, and also you ignored the remaining. That heuristic labored, roughly, in a world the place client buy journeys have been initiated by typing a class key phrase into Google. It doesn’t work in a world during which a significant share of these journeys start with a long-form natural-language query to an AI software, the reply to which is partly drawn from a five-year-old Reddit thread posted by a person known as u/SkincareSarah.

I’m not arguing that Reddit replaces Meta. Nothing replaces Meta. Its Benefit+ campaigns, on the identical Fospha knowledge, outperformed handbook setups by 41% on ROAS and 17% on price per buy. Meta remains to be essentially the most environment friendly efficiency machine ever constructed. Most entrepreneurs, all issues being equal, ought to nonetheless spend the lion’s share of their lower-funnel funds there.

What I’m arguing is one thing extra particular. The manufacturers which have began reallocating 5%, 10% or 15% of their paid social funds towards Reddit, and there are actually loads of them, together with a number of of my consulting shoppers, are seeing the type of incremental ROAS carry that you simply solely ever see when a complete class of purchaser is mispricing stock. That’s the textbook definition of a media arbitrage alternative. It is not going to final. Reddit’s CPMs are already up sharply year-on-year. That “progress in pricing” the corporate retains boasting about in its earnings calls just isn’t magical pondering; it’s the predictable results of a stronger media platform getting extra advertisers to understand its efficiency. However the window during which Reddit is materially underpriced relative to its incremental contribution is narrowing.

So why hasn’t each CMO already moved? 

Three causes, all of them miserable.

1: Calcified media planning

Most massive advertisers run annual planning cycles during which final 12 months’s allocation is the start line for this 12 months’s. Not simply the full funds, which is dumb, however the allocation of it too, which is simply as dumb. A platform that wasn’t on the spreadsheet final 12 months doesn’t get on the spreadsheet this 12 months, it doesn’t matter what the info says. There’s a purpose most efficiency groups will let you know, with a straight face, that “Reddit doesn’t scale” whereas their opponents are quietly scaling on it: it didn’t used to. However now it does. They usually haven’t been checking.

2: Inventive cowardice

Reddit is among the solely advert environments left the place the viewers can and can publicly let you know, in appreciable element, that your artistic is garbage and what’s improper along with your product. The platform punishes inauthenticity at a stage Meta hasn’t imposed in a decade. That terrifies model groups who’ve spent 10 years optimizing six-second loops of somebody holding a yogurt towards an ideal pastel background. It shouldn’t terrify them. It ought to excite them. A media atmosphere that calls for precise editorial judgment is the closest factor this era of entrepreneurs has needed to a artistic problem in a decade. However most model managers commerce salience, synergy and affect for management. They shouldn’t, however they do.

3. Shopper snobbery

Most CMOs is not going to admit to this, even in non-public. Reddit’s viewers is youthful, extra male, extra technical and extra skeptical than the viewers entrepreneurs are inclined to think about after they think about “shoppers”. Whenever you search photos for “millennials,” you get this blissful, linked, multicultural, polygendered assortment of blissful, vibing youngsters with piercings and an incredible perspective. A part of the attraction of influencers and creators is which you can vogue them within the picture of your required market. Curate them to be cool.

That’s not Reddit. 

It doesn’t appear to be the focus-group composite the model group has been focusing on of their marketing campaign decks. It seems, as a substitute, just like the individuals who really purchase your product. And it feels like them too. Reddit is, amongst different issues, an unlimited ongoing transcript of shoppers being themselves. That’s wealthy, granular, category-specific qualitative knowledge that you’d, in a sane universe, pay a analysis company a six-figure annual retainer to assemble for you. It’s sitting on Reddit, free, for anybody prepared to learn it.

There may be one last twist price mentioning, as a result of I believe it’ll turn into the headline of another person’s column in 12 months and I’d like to say the territory first. 

Reddit’s Q1 2026 EPS missed analyst forecasts. 

The inventory obtained hammered. There’s a college of thought, in style among the many type of analyst who has by no means learn a advertising textbook, that that is the start of the top, that Reddit’s progress is decelerating, that the AI partnerships have been priced in, that the simple cash is gone.

It could be. 

However right here is the factor about media companies. The platforms that finally matter to advertisers should not those that develop quickest or earn most. They’re those that command sturdy, particular client consideration in moments of buy consideration. Reddit, in its barely chaotic, barely hostile, unmistakably genuine method, has constructed that. It now sits on the heart of each natural search substitute, through AI, and post-search consideration, through communities. That could be a structurally vital place, and one which no different platform occupies. Take into consideration that.

In case you are nonetheless treating Reddit as a side-of-plate take a look at funds, a $50,000 experiment you ran in Q3 that “didn’t actually scale”, you’re about 18 months behind. The excellent news is that 18 months is recoverable. You may repair it on Monday. The even higher information is that everybody studying this column will learn it, nod sagely, and never repair it on Monday, which is, depressingly, why the arbitrage alternative exists within the first place.

Mark Ritson is a former advertising professor, model guide and award-winning columnist. He is the founder of the MiniMBA.

Get in touch with Mark on LinkedIn.

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