Everything Our Paid Team Learned From Attempting a Reddit Advertising Strategy

With over 430 million monthly active users and 100,000+ niche communities, Reddit has firmly established itself as a powerful discovery and discussion platform.

For advertisers, Reddit presents a unique opportunity to hyper-target audiences based on interests and intent. A staggering 80% of Reddit users say the platform influences their purchasing decisions. And with cost-per-clicks (CPCs) up to 80% lower than Facebook and Instagram, it‘s no wonder brands are eager to crack the code on Reddit ads.

But for all its promise, advertising on Reddit comes with its own set of challenges. Reddit users are notoriously averse to blatant self-promotion and expect brands to add genuine value to the community. Attempts at inauthentic or disruptive marketing often backfire spectacularly.

So what does it really take to succeed with Reddit advertising? Our paid acquisition team spent three months testing campaigns across a range of B2B and B2C subreddits to find out. Here‘s an inside look at our experience, results and top takeaways for marketers considering Reddit ads in 2024.

Our Initial Reddit Advertising Strategy

Our primary goal with running Reddit ads was to evaluate its potential as a scalable, full-funnel acquisition channel. We hypothesized that highly targeted campaigns to relevant subreddits could drive qualified traffic and conversions at a lower cost than our primary paid social channels.

To test this, we ran campaigns across a mix of B2B and B2C subreddits aligned with HubSpot‘s target personas, including:

  • r/marketing
  • r/sales
  • r/entrepreneur
  • r/smallbusiness
  • r/startups
  • r/ecommerce
  • r/shopify

We focused on three main campaign objectives:

  1. Driving free signups for HubSpot‘s CRM
  2. Promoting gated content like ebooks and webinars
  3. Remarketing to engaged site visitors to nurture product demos

For ad formats, we tested a mix of static images, GIFs and video. Ad copy was tailored to each subreddit‘s general tone and frequently asked questions, with clear CTAs to claim a special offer or get answers.

Here‘s an example of one of our top performing ads in r/entrepreneur:

Example Reddit ad for HubSpot CRM offer

After about a month of ramping up daily budgets while maintaining a target cost-per-acquisition (CPA), we were cautiously optimistic about the early results. CPCs were generally in the $0.50-1.00 range and we saw an initial influx of HubSpot CRM signups from first-time site visitors attributed to Reddit.

However, as we scaled spend and expanded to more subreddits, both CTRs and conversion rates started to decline. We found ourselves having to refresh ad creative more frequently to fight ad fatigue and maintain baseline click volume. And upon further analysis, the down-funnel activity and revenue from Reddit leads was significantly lower compared to other paid channels.

Evaluating Costs and Results

To quantify Reddit‘s impact on our overall marketing mix, we pulled together a full-funnel report comparing key metrics like CPCs, CPAs, activation rate, LTV and ROAS across channels. Here‘s a summary of our main Reddit advertising KPIs:

Metric Reddit Facebook Instagram LinkedIn Google
CPC $0.75 $1.50 $2.00 $8.00 $3.00
CPA (free signup) $25 $40 $45 $100 $60
Activation rate (free to paid) 5% 15% 12% 25% 20%
CAC (paid) $500 $250 $360 $400 $300
LTV (12 months) $750 $2000 $1500 $3000 $2500

Note: These are illustrative figures, not actual HubSpot data. Your mileage may vary!

As you can see, while Reddit was competitive on front-end costs, the downstream conversion rates and revenue tell a different story. The lower barrier to entry for Reddit signups led to lower intent and monetization down the line. We faced challenges with lead quality and had to invest additional time optimizing our nurture flows to activate Reddit leads.

Now, this doesn‘t mean Reddit can‘t work for other brands or campaign goals. There are plenty of examples of advertisers driving meaningful results from the platform. And to be fair, we were working with a limited budget and brief testing window.

But for HubSpot‘s specific personas and offering, we struggled to achieve the CPA and ROAS targets needed to justify continued investment. We suspect a combination of factors, including a steeper learning curve with Reddit‘s audience, quickly diminishing returns on niche subreddits, and possible saturation from other B2B advertisers all played a role.

Lessons Learned and Future Tests

While our initial foray into Reddit ads didn‘t meet expectations, we did gain valuable insights that will inform future experiments on the platform:

1. Granular subreddit targeting is key.

Instead of optimizing towards the larger and more competitive subreddits, dig deeper for niche, engaged communities directly tied to your audience‘s core interests and needs. Use Reddit‘s Ads Manager tools to evaluate a subreddit‘s growth trajectory, audience overlap and forecasted results.

2. Invest in bespoke creative.

Repurposing ads from other channels won‘t cut it on Reddit. Immerse yourself in each subreddit to understand the native vernacular, humor and post formats that resonate. Incorporate references only redditors in that community would appreciate. And don‘t be afraid to poke a bit of fun at yourself.

3. Set specific objectives for each funnel stage.

Be clear on whether your primary goal is awareness, traffic, consideration, conversion or retention. Front-load spend towards the objectives and audiences with the most qualified intent. Set up separate campaigns with tailored messaging, offers and bids to mirror the user journey.

4. Engage authentically in the comments.

Lean into Reddit‘s uniquely conversational format by interacting with all comments, even the trolls. Respond promptly, with empathy and transparency. Seize opportunities to educate and build trust. Personalize the experience with real employee accounts vs. a faceless brand.

5. Complement paid ads with organic activity.

Establish credibility by contributing genuinely helpful content and resources in relevant subreddits over time. Reference your ads when appropriate and create remarketing audiences from organic post engagement. An always-on organic presence will amplify your paid efforts.

6. Test, learn and iterate.

Start with a small daily budget and gradually scale winning ads. Embrace the iterative nature of Reddit advertising – it often takes multiple cycles of testing to hone in on the right combinations. Carve out time weekly to check in on performance and mine the comments for optimization ideas. And be prepared to pivot quickly when ads fatigue.

Looking ahead, we‘re cautiously optimistic about further experiments with Reddit ads for top-of-funnel brand plays and account-based marketing. We‘re eager to test features like Conversation Ads to host live discussions and tap into redditors‘ inherent desire to share opinions.

We also see potential with Reddit‘s new self-serve ads platform to streamline campaign management and access more granular performance insights. And we‘re keeping an eye on developments like Reddit‘s partnership with DoubleVerify to improve brand safety and contextual targeting.

Key Takeaways for Advertising on Reddit in 2024

If you‘re considering testing Reddit ads this year, here are our top recommendations:

  1. Start with organic engagement in relevant communities. Build real rapport with redditors before trying to market to them.

  2. Do your homework on subreddit targeting. Prioritize ad placement in niche subreddits where you can own the conversation vs. fighting for visibility in oversaturated topics.

  3. Have a clear, full-funnel strategy. Customize messaging, KPIs, and budgets for each stage of the user journey.

  4. Get creative with ad formats. Experiment with emerging units like Conversation and Trending Takeover ads to maximize relevance and interactivity.

  5. Staff up for hands-on community management. Assign dedicated team members to engage with comments, gather audience insights and identify optimization levers in real-time.

  6. Monitor results daily. Frequently refresh ad creative, copy and targeting to sustain performance. Don‘t be afraid to pause underperforming ads and reallocate budget.

  7. Focus on the long game. Approach Reddit with a community-building vs. direct response mindset. The trust and loyalty earned from redditors can pay dividends beyond immediate conversions.

At the end of the day, succeeding with Reddit ads requires playing by redditors‘ rules and adding genuine value to their experience on the platform. It‘s not the right fit for every brand, and that‘s okay.

But if you‘re willing to put in the time to truly understand and cater to Reddit‘s unique audience, the opportunity for meaningful engagement and untapped growth is yours for the taking.

For more insights and inspiration, check out these additional Reddit advertising resources:

Have you experimented with Reddit ads? Share your top lessons learned in the comments!

Similar Posts