On Reddit’s Inability to Monetize

by on September 6, 2011 | posted in Marketing

The question for reddit isn’t whether or not people enjoy it and want to spend time on it, but whether or not the owners can make money selling those people’s attention. The traffic to reddit – while admirably large – is relatively unattractive to most advertisers.”Reach” (impressions/eyeballs) are only important insofar as you’re talking to someone who might buy what you’re selling (see “relevancy”). The sub-reddit system could theoretically segment the audience in interesting ways, but other than r/gaming, there aren’t many natural industry fits amongst popular sub-reddits.

Anecdotally, the audience would also seem to be advertisement-averse. An advertiser should be willing to pay network prices for the audience (i.e. pennies CPM), which makes it a nice living for a small group of folks living off their passion, but pretty useless to a Condé Nast trying to run a media empire.

I think the business model in a reddit-like site could be selling curated content in other media, e.g. a meme-series of coffee table books. Think Harry Potter, not Oprah.

If you’re in the content game, your business’s value is in having the attention of a group of people. Your first attempt to monetize that asset needn’t be to sell your audience’s attention to someone else, in this case undermining your ability to keep their attention. Instead, you should focus on bringing things your audience wants – and would pay for – to them. Sometimes that means you need to make the things they want to buy instead of shilling them for someone else, because no one sells what your people want.

Condé Nast isn’t built to do this.

Hacker News user Josh Klein, in response to Reddit becoming Reddit Inc.

Previous post:

Next post: