Social commerce is in the cards for Reddit this year

The first role, which will sit within the ads marketplace shopping team at Reddit, is responsible for building the ads serving system and performance solutions for shopping ads on the platform. The second position will lead all business development and partnerships related to commerce, signal and measurement.

Reddit’s jobs board also features two Amsterdam-based engineering roles that focus on shopping ads. Both listings state that the positions will “build and scale [Reddit’s] Shopping Ads Delivery team”, as well as “help to launch [Reddit’s] dynamic product ad in 2023/2024”.

Catherine Chappell, head of biddable performance at Mediahub, said that her team hasn’t yet seen any big e-commerce sales from Reddit, but the subject is now an extended part of the conversation when applicable. And there’s certainly more talk about preparing for full funnel capability. 

Further confirmation came from a creds deck that was shared with Digiday, which stated that Reddit has plans to start testing social commerce in the fourth quarter of 2023.

While Reddit chose not to respond to a request for comment, four marketers that Digiday caught up with confirmed that Reddit is actively working on its e-commerce features, and that the platform has already been sharing the upcoming opportunities at both agency and client levels.

Gradual shift, not a pivot

Reddit’s social commerce push might seem ambitious, but the platform has been slowly paving the way for such capability since 2017, when it launched its first conversion pixel.

“It was initially available in the U.S., but the uptake of the product was relatively low in the U.K.,” said a marketer from a large agency who exchanged anonymity for candor.

In more recent months, Reddit launched “Maximize Conversions” — an automated bidding strategy that drives as many conversions as possible with a CPC cap in place. 

Not to mention, the platform has also launched its e-commerce product offering. It’s still very early days and Reddit has yet to build out a proper shopping ads team, but four updates are currently being tested with a select few communities.

“The updates include product ads (manually selected), dynamic ads (dynamically selected via pixel data), product metadata (via pixel update), as well as catalog sales, which is a new objective for the platform,” the marketer said.

But a more sustainable element to its business, such as commerce, might be just the thing to push Reddit’s revenue to the next level, which is exactly what’s needed to increase the platform’s valuation. After all, Reddit is still gearing itself up ahead of its long-awaited IPO, which the platform has now planned for the second half of 2023, according to The Information. Reddit initially filed papers to start the process back in December 2021, but lack of profitability at the time brought the listing to a halt.

Is Reddit the right platform for social commerce?

Being able to execute social commerce, and execute it well, hasn’t exactly panned out for anyone. Not even for tier one platforms, which is what led Facebook, Instagram and TikTok to step back from it last year — or at least left them rethinking how to make it work before giving it another go. And consumer behavior to support social commerce simply isn’t here yet in the West, in the same way as it is in Asia. 

“Reddit might not have the product-centric positioning like Pinterest, or the inspiration focus of an Instagram, but if brands can serve Reddit users and communities through great content and recommendations, it might just be successful in its social commerce push,” said Alex Hamilton, head of innovation at Dentsu Creative.

But Reddit is still a tier two platform, which is a challenge in itself. It’s already fighting to secure ad dollars away from the likes of Meta and TikTok. And since those larger platforms haven’t succeeded in the commerce space yet, Reddit likely has a big challenge ahead.

“The general evolution of the paid social landscape has led to a requirement for platforms to have an e-commerce functionality and Reddit is playing catch up,” said Chappell. “The platform knows there is a requirement and that other platforms [already] have dynamic product / feed capability that is driving business outcomes.”

That said, as Digiday reported back in January, Reddit has made strides to win over advertisers throughout the past year or so. And it’s been paying off. The platform has signed partnerships with the major holding companies, and more recently brought independent media agencies into the fold. And that’s likely due to its highly engaged community.

According to the creds deck shared with Digiday, Reddit has more than 500 million monthly active users and more than 100,000 active communities.

“If Reddit can leverage its highly engaged community to create a unique and compelling e-commerce experience, it could be successful,” said Lanie Shalek, director of growth at Jobi Capital. 

Chappell noted that there has already been interest in the platform’s e-commerce offering from clients that were capitalizing on Reddit from a brand perspective. They wanted the ecosystem to continue on the platform.

Which makes sense. Reddit’s ad platform has come a long way in the past year, with a number of upgrades and added features. The team’s effort of putting together what is considered a streamlined, easy-to-use and feature-rich ads offering hasn’t gone unnoticed.

Not to mention there are strong indicators that Reddit can drive consideration and intent through app installs and clicks to site, for example, Chappell said. 

“The platform isn’t ruthless about keeping you in the Reddit ecosystem for hours at a time, which does lend itself to social commerce,” she said. “It will be interesting to see how well it performs and what the adoption of brands using it is.”