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The question for reddit isn't whether or not people enjoy it and want to spend time on it, but whether or not the owners can make money selling those people's a
by joshklein 15y ago
The question for reddit isn't whether or not people enjoy it and want to spend time on it, but whether or not the owners can make money selling those people's attention. The traffic to reddit - while admirably large - is relatively unattractive to most advertisers.
"Reach" (impressions/eyeballs) are only important insofar as you're talking to someone who might buy what you're selling (see "relevancy"). The sub-reddit system could theoretically segment the audience in interesting ways, but other than r/gaming, there aren't many natural industry fits amongst popular sub-reddits.
Anecdotally, the audience would also seem to be advertisement-averse. An advertiser should be willing to pay network prices for the audience (i.e. pennies CPM), which makes it a nice living for a small group of folks living off their passion, but pretty useless to a Condé Nast trying to run a media empire.
I think the business model in a reddit-like site could be selling curated content in other media, e.g. a meme-series of coffee table books. Think Harry Potter, not Oprah.
If you're in the content game, your business's value is in having the attention of a group of people. Your first attempt to monetize that asset needn't be to sell your audience's attention to someone else, in this case undermining your ability to keep their attention. Instead, you should focus on bringing things your audience wants - and would pay for - to them. Sometimes that means you need to make the things they want to buy instead of shilling them for someone else, because no one sells what your people want.
Condé Nast isn't built to do this.
- kn0thing 15y agoNailed it, joshklein. In fact, publishing xkcd and SMBC (along with the other breadpig products) has taught me a few things about that world. I'm hoping reddit makes good use of them.
- smokinn 15y agoCheezburger Network seems to be scooping up the business model you're mentioning, bringing the 4chan and reddit memes that are likely to have a broad audience into the mainstream and monetizing them.
- weinzierl 15y ago"The sub-reddit system could theoretically segment the audience in interesting ways, but other than r/gaming, there aren't many natural industry fits amongst popular sub-reddits." In my opinion this is only true for a few (admittedly most popular) subreddits like r/funny and r/wtf and everything nsfw . Nearly every subreddit that I read has an industry that fits, r/photography -> photo gear, r/parenting -> baby stuff, r/science -> journals and books, r/somethingimade -> etsy, etc. I'm also sure that reddit knows a lot more about my interests than google and facebook together. But maybe that's just me...
- eli 15y agoGaming isn't even an especially lucrative market in terms of ads. Now, if they had a /r/PharmaExecutives...
- rmc 15y agoExactly, Some more examples: r/motorcycles r/programming r/$PROGRAMMING_LANGUAGE r/linux etc. The NSFW ones are tricky. On one hand there's a lot of money in porn. But most of the content there is either stuff from porn companies (that would be paying for ads), or amateur stuff, and would an amateur audience like porn company ads?
- joshklein 15y agoYou're not wrong by any means, but it's also a question of scale and purchasing power. There's no doubt that r/parenting is filled with people worth talking to about, say, baby products. But then look at the advertising sales minisite for Babycenter.com[1]; a company like Johnson & Johnson isn't going to bother with r/parenting. Smaller companies might be interested, but small companies don't spend much money on ads. When they do, they mostly spend it on Adwords. Of course the joke here is that J&J bought Babycenter. If I were a category-specific CPG company, I'd cut out the publisher middleman, too. Ad networks & exchanges lead us to think there's a perfectly efficient & liquid market for ad space, but there's a real scaling problem for big advertisers that leads them to stick with big publishers. Quality control on r/parenting would be a concern. [1] http://www.babycentersolutions.com/ http://www.babycentersolutions.com/
- fabiandesimone 15y agoSome time ago, the Reddit community expressed their interest to have an @reddit email account (they were willing to pay for POP access, etc.). I tried to contact the Reddit admins by Reddit messages, email, Facebook, etc, because we can provide them with @reddit mail accounts in no time and scalability is not an issue (we have installations in some of the biggest ISPs in the world) and it would cost them nothing as we were wanting to do a rev-share deal. Sadly I never heard back. There's an opportunity to monetize Reddit users, even if they seem somewhat far from the core product.
- rmc 15y agoHow much have people said they'd pay? I doubt it'll be that much. How can you do it for free? The email market seems to free now, can you really make money by selling email?
- fabiandesimone 15y agoI can't seem to find the original Reddit discussion. It does not have to be much. Is a numbers game and Reddit has a lot of users. I remember our initial calculations were interesting to everyone involved.
- oditogre 15y agoPeople pay for Reddit Gold. I don't see why they wouldn't pay for an @reddit.com email address, too.
- bostonvaulter2 15y agoOr perhaps the email address could come with Reddit Gold
- fabiandesimone 15y agoWe had that in mind :)
- philwelch 15y agoEven something like coffee table books would be a nightmare to get all the rights lined up. Having users post content on an open website allows you to shrug off a lot of these problems compared to actually publishing it yourself. A lot of the content on Reddit consists in writing from people using throwaway accounts they'll never check again (i.e. /r/IAmA, /r/AskReddit, etc.) or in "borrowing" images from pop culture or random strangers where it may be impossible to ever track down or secure the rights for (i.e. /r/vertical and /r/adviceanimals). And there's nothing stopping someone other than Reddit from monetizing all that content the same way. If I wanted to, I could send private messages to hundreds of Redditors and get permission to include their comments in a self-help book gleaned from AskReddit comments, and Reddit would have absolutely no advantage over me in doing this, nor any way to stop me. As far as any content on Reddit goes, the story is the same way. Just as Hacker Weekly operates independent of YC and the people who run HN. I think if you want to monetize Reddit, monetizing the audience isn't the only way. There's no reason Reddit can't, aside from having subreddits, sell paid hosting for completely separate, possibly private reddits that don't connect to Reddit itself.
- whatusername 15y agoWasn't that their original business model. I don't think it went very far (although it got them to a ramen level profitability). They also have things like /r/dragonage taht was setup by EA (possibly with a fee?) to promote the game
- kn0thing 15y agoIndeed. Merch definitely hasn't reached its full potential. And that /r/dragonage sponsorship was indeed paid; I wish more advertisers saw the value of a branded subreddit. That's something for us to do a better job explaining.
- shoham 15y agoHi, As a small business advertiser on Reddit, I feel as if this would be a good idea, especially for big businesses; however as I wrote before (http://news.ycombinator.com/threads?id=shoham http://news.ycombinator.com/threads?id=shoham), there are a couple of little things that I think you guys could be doing to be more business friendly with self serve ads for small businesses like my own: http://www.feed-forward.net http://www.feed-forward.net The three main ideas are: (1) lower the cost per day for ads (for a small business, with less than 100K a year in revenue, Reddit ads don't scale well). Facebook, and Google have a $1/day minimum. (2) Let the OPss of self serve ads moderate their post. It defeats the purpose of spending money on an ad, and having such an awesome idea such as the SSA program if the comments section is hounded by trolls, and moderated by no one. I've been told by admins that Reddit has a long history of free speech adherence, which is great, but posts are removed from subreddits all the time for not complying with the subreddits' rules, at the mods discretion. My proposition is that you guys extend this courtesy to buyers of SSAs. Third, allow advertisers who have been advertising for a while to focus their impressions on people who have already clicked on their ads. Again, this is a small business-friendly idea -- I've focused most of my ad buys on r/music , a huge subreddit of 150K people. If after a month or two I could focus my buys on those users I've already engaged with in that r/, that would help bolster two objectives: keep the ad conversational, and help advertisers create a community around their submission/business. Once a few thousand people have seen my ad every day for two or three months, I can maybe even invite them to a sponsored r/... -Shoham
- bane 15y agor/gaming, there aren't many natural industry fits I wonder if then that speaks to interesting business opportunities? There appears then to be a misalignment between traditional industries and what people are actually interested in.
- philwelch 15y agoWell, r/trees suggests an interesting business opportunity, but that's illegal. Lots of other subreddits (/r/mensrights, /r/politics, /r/worldnews, /r/atheism) are hotbeds of demagoguery and outrage, which may be good for political fundraising but little else. (It's possible to sell demagoguery and outrage--Rupert Murdoch and Arianna Huffington have taught us that much--but I don't know about selling it people who are already getting it for free.) And then of course, pictures of cats and formulaic jokes are another thing.
- PostOnce 15y ago/r/forhire could compete with craigslist if it was managed right, I think. they could do a /r/forRent, etc. also. Reddit has a lot of opportunities. Let's hope the CEO can figure out how to captialize on some of them.
- shoham 15y agoBuyer of Reddit self-serve ads here, and I think that their approach is interesting, even exciting, and in the long-term potentially very profitable. Some of the issues come down to the ad averse culture (as you pointed out), not just of the community at large but even of the staff on the back-end. There are great little ideas that are not being managed effectively in my opinion. For instance, it costs more to target a particular subreddit than the whole website, which is not particularly good for the kinds of small businesses that could really benefit from the service (there's also a daily minimum -- $20/day for site-wide, and $30/day for subreddit buys -- compared to Google, and Facebook's $1/day minimum). Secondly, the true genius of the Reddit ad system is that your ad looks a lot like a regular submission. Think about the power of Adwords -- your ad looks just like the content your potential buyers came to consume anyway. Thirdly, and here is the double-edged sword -- in the comments, a conversation (actually, a long-term, multiparty conversation) can build around your company. The power of this is truly great; however the implementation has been spotty. Every post on Reddit is submitted via a community with rules, and moderators. The one exception to this is self serve ads. What you end up with is a lot of spam and trolling in your self-serve ad, which defeats the whole purpose of having the comments in the first place. Unfortunately, in my experience, the admins aren't sure what to say and fallback on free speech adherence, etc. although many posts and comments are taken down in various subreddits due to a lack of observance on the part of the commentor or OP to that sub's rules. TL;DR: Reddit's self-serve ad system is a billion dollar idea in the making, but only if the culture of the community and more importantly the admins allow it to be so.