From the $100 million counterattack of reddit, look at the era of mobile and PC products

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From reddit's $100 million counterattack, look at the era of Mobile and PC products

Header Source: Oriental IC

What do you think of reddit, known as the "Internet front page"?

Think of this site in endlessly funny stalks or meme diagrams? Or are the interesting little inventions that programmers often make? It doesn't seem surprising that anything happens in a forum that is huge, inclusive and constantly creating new hotspots on the Internet.

But today we want to talk about the reddit in recent years by leaps and bounds in advertising revenue. Reddit's net advertising revenue reached more than $70 million in 2018, while reddit's advertising revenue is expected to reach $119 million this year, according to eMarketer, a marketing research firm. By 2021, the figure is expected to reach $260 million, or 0.2 per cent of the advertising market in the United States.

Compared with Facebook,Twitter, reddit's advertising revenue is almost insignificant. But reddit advertising revenue growth rate is very amazing, has reached 54%. For a platform that has always been a difficult place in advertising, it may provide a lot of experience to refer to.

330 million users contribute less than 10 million revenue, and traffic is now out of order.

As a forum very similar to Baidu Tieba's concept, reddit has made far more achievements in traffic and user volume than people think. As of June, reddit had 330 million users, 93 per cent of whom were young users under the age of 50. At the same time, everyone spends an average of 16 minutes a day on reddit, surpassing Facebook and Twitter, the fourth-largest traffic sites in the United States.

In this way, isn't this the brand's favorite platform with high stickiness and rejuvenation? But in 2015, reddit's advertising revenue for the whole year was just 8.3 million, according to the data.

So why is a platform with a huge traffic rate not even receiving advertising fees?

First of all, reddit is extremely open, and the result of excessive freedom is the creation of inappropriate content.

In reddit, you can open sections according to different topics. However, due to the lack of supervision on the platform, reddit has many sections such as hate speech, piracy support, extreme left wing, etc., and a lot of "politically incorrect" comments are produced every day. For the brand side, this is not a "safe" communication environment.

Secondly, the community atmosphere and mechanism of reddit is very unfriendly to advertising content.

Reddit's content sorting mechanism is to determine post sorting through the user's "top" and "step". Compared with the more common intelligent recommendation Feed stream, this mechanism is not only quite backward, but also users usually see the advertising content "step", and soon the advertising content is squeezed under other content. In the end, reddit users and traffic are not small, but can not guide commercial content.

The last point is that the average revenue of users on reddit is very low.

The New York Times once surveyed the average income of social networking site users, while reddit users earned an average of just $0.3 an hour, ranking bottom among Twitter,Facebook,Pinterest and Snap platforms, with even Snap users known as young users earning an average of $2.09 an hour. This proves that many of reddit users have no revenue, which greatly reduces the commercial attractiveness of brands.

What did Reddit do when it was a neutral attack from chaos to a polar community?

In this way, the content of the reddit platform is in favor of "chaos", traffic is huge but the net value of users is low, "primary school chicken" and "loser spray" are the majority. Seeing this definition, I am afraid you can find many similar control products in China: Baidu Tieba, Douban Group, Jinjiang Rabbit District.

So what exactly did reddit do to counterattack revenue from 8 million to 100 million?

The first step that reddit made after being determined to "just rot money" was that the strong man broke his wrist and banned the inappropriate content on the platform, giving different treatment methods according to different degrees. For example, in conjunction with the NBA, the section on the pirated basketball game was banned, and some sections dealing with extreme political and religious propositions were shut down. As for some of the sections that are on the red line, such as pro Trump with a lot of political hate speech, it is isolated. Before the user enters, reddit will remind the user that this section contains a lot of inappropriate content. At the same time, the content of this section will not appear in the search and recommendation of other non-subscribers.

After refining the platform content, reddit also issued a series of service policies for advertisers. Reddit has opened a series of ad slots, such as banners listed on the top page, side billboards, and even 24-hour posts.

At the same time, reddit also set up an advertising service team to help advertisers optimize their content, making the content of the advertisement more biochemical and more acceptable to reddit users. At the same time, reddit is constantly showing some of the different features on its platform. For example, reddit has a large number of coin investors and programmers. This is very attractive for some specific types of advertisers.

Of course, reddit did not limit its revenue to advertising, and reddit recently opened a reward mechanism from which to charge a commission.

Can you fill the era between PC and mobile with content cleaning and flow alienation?

To put it simply, reddit's "counterattack" is based on two facts: the first is the transformation from anti-commercialization to commercialization; the second is the combing and extraction of the value of traffic.

From a commercial point of view, the initial reddit must be very "anti-commercial". There is no advertising space, lack of content management mechanisms, and a violent community atmosphere... In this case, a community will only be farther and farther away from the business world, and form a strange logical self-consistent situation, such as not commercialization. In order to ensure the user experience, have geek feelings, guarantee freedom of speech and so on.

From the point of view of traffic mechanism, reddit is actually more aggregated and segmented than other platforms. This way of aggregating traffic according to one topic can actually provide more subdivision and vertical traffic pool than Twitter. But reddit has not been able to show this feature, but let emojis, no jokes, political speech has become their own label.

In the face of these situations, reddit chose the way of fine operation. First, the original open forums are separated one by one, the negative sectors are isolated, and the advertisers are encouraged to recommend the sectors with higher traffic value. At the same time, the advertising service continues to climb upwards, providing a more comprehensive service to help advertisers adapt to the community atmosphere. In the end, I reversed the indulgence of the past few years and began to gradually get the eye of the advertiser.

In this process, we can find a problem, and in the course of the "reverse attack", reddit still has a strong PC-era color _ the same problem, actually can be solved by the AI algorithm. The value of the user is identified and separated by the AI algorithm, and then the content of the advertisement is matched. As a result, a relative inclusiveness of the platform can be ensured, and a business entry point can be found accurately.

Weibo, Zhihu and other platforms we see today are all doing so.

Unfortunately, reddit not only applies anonymity, but also has limited access to user interests and habits, and it took a very late time to move, and it was not until 2015 that the app version was launched. As a result, it is difficult for reddit to make use of efficient AI method and can only increase investment in operation.

The end result is still low commercial efficiency – although reddit is expected to receive $100 million in revenue this year, Twitter, the same volume of traffic, earned $655 million in the first quarter of this year alone. In fact, the forums we mentioned earlier, Douban Group, Tianya, etc., have all flourished in the PC era and failed to catch up in the mobile era. The same problems have led to commercial inefficiency.

When the mobile Internet became a wormhole through AI, the watershed between the two eras of mobile and PC became more and more obvious.

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