The site’s AI-powered ad tools and other tweaks to the platform have boosted the company’s business.
- Reddit will drop r/popular as the default for new users and also for other users who don’t use it.
- That’s the latest among several platform tweaks and product rollouts this year, including AI-powered ad tools, that are boosting Reddit’s business.
- RDDT is the best-performing social media stock this year.
Reddit, Inc. is making some interesting changes under the hood to make the forum site more appealing to users and advertisers.
In a year-ender letter, CEO Steve Huffman said Reddit would become more personalized for users. That note caps a year packed with AI-powered ad product launches, a new content licensing partnership with OpenAI, and even a lawsuit against Perplexity.
Huffman recalled Reddit’s beginnings 20 years ago, intending to “create a space where people could talk about interesting things they found on the internet.”
“What began as an alternative to traditional media came into its own as an alternative to social media, and now that AI is everywhere, our aim is to keep Reddit the most human place on the internet.”
Dropping r/popular
Reddit is “moving away” from r/popular, the default feed for new users, and plans to replace it with “better, more relevant and personalized feeds,” Huffman, a.k.a Spez, said in a Reddit post on Wednesday. Reddit would stop showing r/popular to new users and in the core group of feeds in the app.
“For a long while, we were known as the ‘front page of the internet,’ but we’ve outgrown a singular front page for everyone. You have different interests than I do, and your Reddit should look different from mine,” Huffman said.
R/popular, which is meant to show trending content, actually shows what is liked by the most active users on Reddit — which is not the same thing. That gives the false impression of a singular Reddit culture, he said.
Reddit is also in the process of curbing “powermods,” or forum moderators with strong influence. Announced in September and scheduled for implementation in March next year, the switch would ensure that users can moderate only five communities with over 100,000 weekly visitors. Reddit has also replaced the ‘subscriber count’ on the community pages with ‘weekly visitor count,’ which it says more accurately reflects activity.
The changes make “Reddit more conducive to how people actually use it today.”
AI Adoption
In the middle of the year, a bunch of key company initiatives set Reddit up for a strong sailing. It signed a deal with OpenAI to license Reddit content, which would show up in ChatGPT responses to users.
It then rolled out a suite of AI-driven ad tools — from trend-spotting insights and campaign-testing features to a new format that lets brands showcase “positive” user comments directly under their ads. In an August shareholder letter, Huffman said Reddit will expand its search functionality and add AI-generated summaries.
The AI strategy is paying off, with its recent results showing that active advertisers grew an impressive 75% over the year-ago quarter. Morgan Stanley said in an October note that the company’s advancements in automation, ad formats, and recommendation models are expected to drive “durable growth.”
MS analysts noted that Reddit has plenty of room to go deeper with active and new advertisers, and expect Q4 users to rise by 5 million to 121 million daily active users as retention efforts improve.
Notably, Reddit has been the best-performing social media stock this year. On Stocktwits, the retail watchers for RDDT have increased by 80% over the past year.
Now, with talks of a second content licensing partnership with Google reportedly in the works, Reddit is having its time in the sun.
Bonus…
Huffman stressed that humor and entertainment are Reddit’s biggest draws. Members come to Reddit “to laugh, ask questions, judge, and generally be entertained,” he said, and shared the top 20 subreddits. Here they are:
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