Reddit Tests Ads in Search Results as AI Search Cuts Its Traffic

The new placements let advertisers reach users while they search Reddit for products, recommendations and other information. The company said the ads may appear based on several factors, "including contextual relevance to a user's search query." It described the launch as "an initial test with a select group of eligible advertisers" and said it will use the results to adjust the experience for users and advertisers.

Reddit gave examples. A search for "espresso station" could show ads for espresso machines, coffee or mugs, and a search for "home office setup" could bring up ads for monitors, desks and chairs.

The Traffic Problem

The test comes as Reddit deals with how AI is changing the way people reach websites. Its third-quarter revenue and earnings per share beat analyst estimates, but the stock fell after it forecast fourth-quarter sales of $1 billion to $1.03 billion, below the expected $1.05 billion. Reddit linked the weaker outlook to fewer search referrals after Google moved to AI-powered search. Features such as AI Mode answer queries directly on the results page, so fewer people click through to other sites.

User numbers have stalled. Global daily active users were flat from the previous quarter at 130.3 million in the third quarter. US daily active users fell from 53.2 million in the second quarter to 50.7 million, down 2% from a year earlier, according to TechCrunch.

Earning More From Fewer Visitors

With growth in new visitors harder to find, Reddit needs more revenue from the users it already has. Search ads target people who are actively looking for something, an audience advertisers usually value highly.

The ads may become more valuable once Reddit makes logged-in access the default, a change it announced alongside its earnings. It will roll that out gradually, starting outside the US. TechCrunch said the change does two things: it protects Reddit's content from unauthorised AI scraping, and it gives advertisers better data, because logged-in users give more signals about their interests and behaviour.

For marketers and publishers, Reddit's situation shows how AI answer engines are changing online traffic. Platforms that relied on search referrals are now trying to earn more from their own audiences and to keep their content away from the AI systems that are drawing visitors elsewhere.