Reddit search users will now see ads: How did Google’s AI lead to a drop in traffic? Find out where these ads will appear..
When people want to find genuine opinions about a product, they often turn to Reddit. The company is now looking to capitalize on this by opening up space for advertisers. On Tuesday, Reddit announced that it is testing the display of advertisements on its search result pages, with a select group of advertisers currently participating.
How will the ads appear?
According to the company, users will see advertisements when they search for products or recommendations. The specific ads displayed will depend on several factors, the most important being their relevance to the search query. For instance, a search for "gym gear" might trigger ads for running shoes, dumbbells, or protein shakes, while a search for "healthy diet plans" could lead to advertisements for organic food, oats, or nutritional products.
Previous initiatives
This is not the company’s first foray into commerce-related efforts. In February 2024, Reddit began testing an AI-driven feature that connects community recommendations with products from partner companies. Notably, a few years ago, CEO Steve Huffman had stated to investors that Reddit did not display ads within its search results.
What do the figures show?
In the third quarter, the company’s revenue grew by 53% year-over-year, reaching $895 million. However, the revenue forecast for the fourth quarter—ranging from $1.00 billion to $1.03 billion—fell short of analysts' expectations of approximately $1.05 billion. Additionally, the number of daily active users in the United States declined by 2% compared to the previous year, settling at 50.7 million.
Why has Google’s AI become a challenge?
Huffman informed shareholders that traffic originating from search engines dropped significantly during the third quarter, with the decline accelerating toward the end of the period. The impact was most pronounced among visitors accessing the site via the web without logging in—a trend driven by Google’s shift toward AI-generated search responses. Features like AI modes provide answers directly on the search results page, meaning users often don’t click through to the original websites from which the information was sourced. Since Reddit threads frequently appear at the top of search results—especially for queries related to products or advice—the impact on the platform is significant. According to Huffman, if this trend continues, there could be a double-digit percentage decline in daily unique users by the fourth quarter. Currently, this figure stands at approximately 130 million.
Moving Toward Mandatory Logins
Search ads are just one part of this shift. Reddit is moving toward an experience where most users will be required to log in to use the platform. This will be tested in select markets outside the United States during the fourth quarter. The company claims this will improve the user experience, strengthen its advertising business, and enhance data security. While logged-in users will have the option to disable personalization, Huffman noted that the product does not perform as effectively without it.
The rationale behind this is clear: the company reports that the vast majority of user engagement—and over 80% of its revenue—comes from users who are logged in or using the app. Furthermore, a "login wall" will make it more difficult for AI companies to scrape Reddit’s data without authorization.
Questions Remain
Reddit has not disclosed the names of the advertisers participating in the tests, nor has it specified how many ads will appear in search results. For users, the most pressing question is how the platform will strike a balance between paid advertisements and authentic, organic threads. It also remains unclear whether search ads will be sufficient to compensate for the traffic lost due to changes in Google search results. Until the actual results are in, the company’s claims should be viewed as its own perspective rather than fact.
Disclaimer: This content has been sourced and edited from Amar Ujala. While we modified it for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
