Comment by redditadvthrow | Hacker News Reader

Comment by redditadvthrow | Hacker News Reader

I work at a digital advertising agency as a media buyer. I buy ads for a living, and spend ~$5MM a year.

Reddit is merely stepping into the big leagues.

What reddit has done is switched from "Contextual Category" (cx cat) targeting to "Behavioral" (bt) targeting. Usuaully behavioral is much much better, which is likely why the change was made. But OP was doing contextual cat really well, so it was more successful than bt.

Reddit made this switch because it will benefit the majority of advertisers, but hurt the ones who really know what they are doing. Reddit will earn more from the 80% that see improvement, and therefore spend more. The 20% like OP will spend less, but it won't matter.

CX CAT = Companies like grapeshot and peer39 use NLP to identify keywords on a webpage and categorize it. Then advertisers can buy ads on any webpage that is in those categories. One of my favorite strategies is to buy ads on content that is predicted to go viral in a certain category (like fashion). These are ads that HN usually would like because the ad content is similair to the content of the website. They target a webpage, not a user.

BT = Ads that target a specific user, no matter what website they're on. So once a user has visited r/jerky, they're tagged as liking beef jerky and could possibly see beef jerky ads on any site they visit. This is partially how you get ads that seems very out of place - beef jerky ads on a r/technology.

If you spend time buying media, you know reddit's behavior isn't surprising. Facebook and Google both have default settings that will burn through your budget and provide shitty results. Only someone who intimately knows the platform will be successful. Reddit is merely stepping into the big leagues.

Fellow buyer here. This is spot on.

Reddit is going down a well-trod path. First you implement something basic and allow any advertisers in to generate cash. In Reddit's case, they started with the easiest and most tolerable form of targeting--contextual.

Now that Reddit has taken outside investment that aims to turn it into the next feed-based FB competitor, they are following the playbook pretty obviously. This typically means things like:

- Improve audience data (see efforts asking for email registration, new profile pages, new tracking, etc.)

- Clear out low-quality advertisers and content that scare away big brand advertisers (see past changes to user, post, and ad policies)

- Increase impressions and ad engagement by moving from static banners to ads inserted into the feed to continually create new impressions the more someone scrolls (see Reddit's mobile app)

- Increase RPM with more expensive ad formats like video ads (see their June video ad update, starting to host video, etc.)

Reddit has a somewhat significant disadvantage in all of this in that they are starting from a place of strong privacy and user-favorable policies. This has led users to feel that they are the reason Reddit exists and the content creators and sub owners vs. the reality, which is that they are the product.

This means Reddit has an uphill battle in rolling out these revenue-driving changes, and many of the more noticeable ones have been met with fairly significant and visible user pushback. This is why the announcements are almost always bundled with other positive changes.

I would anticipate further reduction of user privacy, a site-wide conversion tag to make it easier for them to build stronger user audience profiles for retargeting and facilitate conversion tracking setup, ads inserted into user uploaded videos, images and gifs and maybe even comments to increase impressions, and attempts at monetizing influencers who get paid outside of Reddit (read: money they don't get) via promoting posts.

As a Reddit user of 12+ years, I've disliked seeing many of these changes. As an advertiser, I understand why these changes are necessary for them to be successful in the existing Google/FB duopoly. My hope is that they continue to honor user wishes for privacy as Reddit would not be what it is today without users who felt it was a safe space to anonymously post certain things. My other hope is that they start dramatically improving their ad platform since pretty much every advertiser I've asked really dislikes it, citing poor UI, targeting issues, tracking limitations, and quality issues (it definitely won't perform for everyone).

>As an advertiser, I understand why these changes are necessary for them to be successful in the existing Google/FB duopoly.

Well then maybe you can help me understand. I see this going exactly as you describe, but I don't understand what's wrong about the old advertising model... just charge more. Direct advertising on reddit seems like it should be very lucrative. Couldn't they also sell trackers

You wrote

> This has led users to feel that they are the reason Reddit exists and the content creators and sub owners vs. the reality, which is that they are the product.

The content creators aren't wrong, are they? Granted, to Reddit eveyone who views the page is the product that they sell to advertisers for money, but the content creators are the ones drawing in the page views, not reddit.com (or tumblr.com, etc), and they are selling that content to drive page views. Sure the dollar is king, but without content to generate pageviews reddit is nothing. I feel like this is indicative of a destructive and characteristically narcissistic attitude that pervades the Valley, namely that people who participate in the online information exchange--not as idle lurkers but as active participants--are essentially a resource to be extracted. This won't work long term, the effects are already pretty obvious on Reddit, a lot of the best content creators have already abandoned most of the site and if they continue down the road you outline it won just be the best memesters and the people who have interesting and nuanced personal philosophy (both of which have mostly vacated reddit in the last 1-3 years), but also anyone who has an interesting story to tell, which a huge draw for a lot of people. If Reddit continues to go down the road of "boiling the frog" it will just be Buzzfeed in a few years, and it's such a waste--I doubt that Reddit has a product (the product here being a BBS-like service) that can generate a user profile with comparable value to that of google and facebook, the data is not rich enough. That said, I'm curious as to why their aren't more trackers on reddit, it seems like google amazon and facebook would be keen to add their users' reddit browsing habits to their profile.

> "but I don't understand what's wrong about the old advertising model... just charge more. Direct advertising on reddit seems like it should be very lucrative. Couldn't they also sell trackers"

There have been complaints of reach being too low, so I could see the line of thought with making the broader targeting the default. Brand advertisers often don't care as much about the context (as long as it is brand safe) and care more about the person. It can lead to some issues, but allows targeting at much greater scale because of the inventory it opens up. I agree with other comments though that they should leave it as an advanced targeting option. Not every advertiser performs the same, and some do much better in a narrowly-configured contextual targeting setup.

> "The content creators aren't wrong, are they?"

I don't think they are. But it isn't that black and white in reality. Many would not be where they are today without Reddit existing as a platform for them to grow their audiences. I think they and Reddit are somewhat symbiotic and a better balance could be reached.

I'm not sure I agree with you here.

"User is visiting r/foo now" is arguably a behavior! So posting an ad to a specific subreddit is arguably behavioral.

"Once visited r/foo six months ago" is arguably not a behavior; it's not something the user is doing. If anything, that is contextual. Presenting the ad based on this amounts to targeting the user based on a pile of past context attached to their account, not based on their current behavior.

And since behavioral works better than contextual, there we go: it explains why OP has reduced ROI!

Taking away this laser targeting op is describing is definitely a step backwards

Could you explain a little why in your opinion BT is preferable to CX Cat? Is this only in the eyes of Reddit or also in the eyes of an advertisement buyer like yourself?

My opinion is probably skewed, I only do rtb and no direct buys, so my categorical targeting is somewhat different than what OP is doing. BT generally does better for me because data quality tends to be better (you can get really specific, like a user with HHI 100k+, owns a Ford, AND is in market for a new minivan.)

I'd usually rather get 100k of those really expensive impressions, than 1m of less targeted (cat) impressions.

Advertisers are trending towards behavioral, it is a lot more powerful and the available inventory is much much bigger. Rather than limited to only sites about bacon, the author get buy ads on any site and (in theory) get the same performance while spending less.

I'm very new to the publisher side of media buying - my feeling after reading OP's post was this was the case. We currently run AdX on our highly categorically sorted site (with no smarts to it) - are you saying then it would be better ROI for us to build out ad serving based on behaviour rather than category? (Category would be much easier for us, I imagine this is just a case of sending the category to Doubleclick.)

I'm op, forgot the password I used.

I have no publisher side experience, and I only do rtb - no direct buys. Traditionally BT generally does better for me. Data quality tends to be better (you can get really specific, like a user with HHI 100k+, owns a Ford, AND is in market for a new minivan).

Thank you for shedding light on this. I suspected this was what was happening. They are letting the big advertisers empty their wallets.

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