S16 E7: How Brands Are Winning on Reddit Right Now

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0:38Right now, you can get 50 % off your first 60 days at instant.1 slash Sharma. All right, everybody, welcome back to Limited Supply. I'm Nick Sharma. And today we're going to do something that I've been wanting to do for a while. You know, almost every product search I've run in the last year ends with the word Reddit at the end of it. And I'm not alone. About 20 % of Google results pull a Reddit thread. All the AI tools that you use, whether it's chat or Proplexity or Gemini, when you ask them what to buy, they're usually citing Reddit threads back to you. And the most consequential commerce surface on the internet is what a lot of D2C brands still think is just memes and karma.

1:15So today I'm sitting down with Vinay from Reddit and we're going to figure out exactly what changed and what's working for brands on the platform and how you can take advantage of Reddit right now. Not someday, but today. So, Fene, welcome. Really happy to have you on. Happy to be here, Nick. Thanks for having me. Of course. I think today's going to be just a really cool episode because not only are we going to talk about Reddit, which is a channel that everybody has kind of heard of and known is a channel that has a lot of growth, but you're actually at Reddit and you're in it pretty deep. So I'm excited to hear from your perspective.

1:51But as we get started, could you just give our listeners a quick overview and introduction to yourself? Maybe as if your mom was bragging about you at a party. How would she introduce you? Sure, sure, sure. So my name is Vinay. I live in New York. I've been at R.I. for four years. For the last two years, I've been leading our shopping and commerce product area, which used to be primarily ads. And now we're building a range of additional commerce experiences, which we'll talk about. Before that, I was chief of staff to a COO up until the IPO, which was an exciting, exciting time for Reddit. And before that, most of my career was in consulting, both in India and the US.

2:29I love culture, communities and tech. And Reddit feels like the perfect spot to find all of those things in my day to day job. Yeah, it feels like that is the intersection. Reddit is the intersection of culture. You said culture, community and tech, right? Yeah. Yeah, that is totally the pinnacle of Reddit. So, you know, Reddit has become now the kind of the internet's product research layer. And, you know, it feels obvious to me, but it still feels like it's also underpriced by most people. Reddit as a channel, you know, it's where people go for basically a review of anything that matters to them.

3:09So whether it's running shoes or a humidifier for their child or a new mattress they're about to, you know, go and make a purchase on. You know, no one is now reading the brand's website because that's just copy. And now it's more and more AI copy. But, you know, they're going back and trying to find a Reddit thread from three years ago from someone who is completely unnamed and not an affiliate, not a real, you know, big profile or like a loud name. But they just want to hear that kind of like review. And that review is often, almost always, just trusted way more than the brand. So I'm curious, like, when did this shift click internally?

3:45Like, was there a moment where you guys were looking at the data and you thought, oh, wait, this is not just a community platform anymore. This is actually becoming a buying platform or a research layer. Yeah, so it's interesting. I think we've always believed this to be true at Reddit. Like so much of all the work that happens at Reddit is from people who believe in the value of communities. And we see that users come to Reddit because of the value of communities and what real humans have to say. And this predates AI by many years, right? Where it is now 20-ish years old. What AI has done, I think, has accelerated a lot of the behaviors on the internet and just made it much more central, meaning the utility of like human content, authentic content, has just become much more important when the marginal cost to create content goes to zero.

4:34You can have an LLM write a take and so on. But if you're in the market for, as you said, a humidifier for a baby, what you want to hear from is from other parents. You want to hear what people bought and their experience and so on. You don't want to read a take from an AI, from an LLM that is summarizing a set of humans and so on. So our thesis has always been that Reddit is the most human place on the internet. Our CEO, Steve Huffman, often uses the language of Reddit as the town square. It's like, this is where people come to have conversations. This shows up in our numbers. We have a range of stacks that show this.

5:08nine in 10 Redditors verify product recommendations from AI on Reddit before they buy. This is literally my, and I'm sure it's your workflow as well. If I'm in the market for something, I usually start with a Google search, perhaps figure out the lay of the land. And then before I make the purchase, I always like start with this product Reddit appended. And then I enter the Reddit universe and decide what to buy. And it shows up in scale, right? So we have north of 100 million daily users, a large fraction of them are commercial. So all of that is, I think, just testament to the fact that what people actually want is to hear from other humans, right?

5:45And this becomes even more true in a world where there's a lot of LLM-driven content floating around. Totally. And I'm curious too, like what do you think makes Reddit so special from a format perspective that, you know, like other platforms have honest reviews or chatter and conversation, but Reddit is where everybody goes for this type of content? And more so trying to think of this answer as like a way to help frame the rest of the conversation as to why Reddit is kind of this playground. Yeah, I think the concept I talk about is like communities, right? So reviews, in some sense, you could have a different review of a certain product depending on what community you're talking to or you're talking within, right?

6:27So for example, like the Cardinal example I use when testing any of our internal products is best headphones for swimming. you'll likely on Reddit have a swimmers community, you'll have a headphones community, you'll have a swimmers who listen to music community, and so on and so forth. And your review of a product is almost certainly going to be different depending on who you're talking to. Like so much of understanding Reddit, which I always find amusing is also, like it really helps to think about it as a party and you're talking to a group of people. And if everybody there says they're swimmers, the way you would describe a certain product is different from if you were talking to like an audiophiles group, right?

7:04You'd likely talk about the fact that the sound quality is good. It is or doesn't interrupt how you swim and so on. So all of this comes back to communities. And I think what Reddit has is just a way for humans to interact online. And for what this collection of humans decides is important to float to the top. And this comes because of moderators, this comes because of the community up or downward about interaction in terms of how the feed is organized. But if you're on a certain community, you can almost always trust that the content that you see is likely community vetted. And from within a certain post, the comments that float up to the top is community vetted.

7:45And that is a signal that's really hard to emulate if you didn't have humans, in fact, with all of our collections of interests, vetting content and giving it like a thumbs up that, hey, this is something that I found valuable. Yeah, that makes total sense. I think the, you know, like Reddit has kind of gone for from just being a fun place of the internet or a fun community on the internet to where so many decisions actually get made. There's even like, you know, we're talking about consumer and commerce, but there's so many B2B subreddits and communities and threads also, that are explosive, like, you know, there's SaaS founder communities on Reddit that have some of the best advice you'd ever get.

8:27find on the internet out there? A hundred percent. Like a friend of mine runs a fintech startup called Basic Capital, highly recommend. And I think they found their first users and this company, what they do is something related to 401ks and finding ways to invest your 401k dollars better. And they found the first set of customers and got like excellent product feedback on Reddit. I happen to focus on the commerce vertical. So I have a range of stats related to that. But anecdotally speaking, whether you're talking to a new parent or if you're talking to someone who's interested in vinyl records, or if you're talking to someone who likes bikepacking, there is almost always a subreddit where communities of these people get together to discuss their hobby, vocation, interest, so to speak.

9:13And of course, the purchasing decisions just fall as a consequence of that. To do stuff, you almost always need stuff. And hence, people talk about the stuff that they need. Yeah, so true. True. I think, you know, I'm curious to find out like what is what is now driving so much of the growth on the commerce side? Obviously, there's the growth of AI. But, you know, from the outside, the commerce business looks like it's grown a bunch in the last 18 months or so. There's a whole new, you know, community or mix of brands that have entered the platform. It's not just what you would have maybe thought were, you know, Reddit friendly brands from five, six years ago.

9:49And there's a bunch of D2C brands that are now starting to pay attention to Reddit also. And so I'm curious, like, what is behind this growth? Is it that brands are catching on? Are you guys building something to unlock that or building more tools for brands? Is it both? Yeah, I think it's both. So if we were to start at the first on the importance of Reddit as a platform itself, I think that has been something that's been true for many years now, accelerated by both external factors in terms of the value of authentic content going up in a AI slop world. And then the second, which is we're leaning into this trend.

10:25So if you were to talk about the first, we see this in a range of stats. So high intent shopping conversations are growing 40 % year on year. That is faster than how the platform is growing overall. We just released earnings a few days ago and DAU grew 17 % year on year. So the rate of growth of commercial content, of shopping content, is growing faster than the rate of the growth of the platform itself. This is true across subcategories within shopping, whether you take consumer electronics, whether you take gaming and travel and so on. I think all of this comes down to like an individual user or a human, where there's a large number of shoppers who say that they feel more confident about a purchase after researching on Reddit.

11:07I think of it as just a digital analog to a couple of friends told me this was a great product to buy. And then I bought it. So I feel more confident that the product is good. It just so happens that these people are in friends and there are other humans you're interacting with on this platform called Reddit. So all of that is about just the secular role of like human content and Reddit in particular. But if you were to take in terms of the types of things that we're building, one of the products I work on is dynamic product tags. And we'll talk about this later in the conversation. It's a standard product.

11:36Anybody who's been in marketing, I think understands this product, but we're trying to build this in a way that is unique to Reddit, right? Where you have context and you have behavior, right? You have communities, but you can still track the user. if you're spent like half an hour evaluating mattresses, but now you're looking at news on Reddit, we still know that you were the same user that was looking at mattresses 30 minutes ago. So that's the behavioral side. And I'm happy to talk more about the types of things that were built to enable brands to show up to users who are in market or interested in a certain product.

12:10Yeah, totally. I guess before we get into that, is there like, I'm curious, what surprised you in the last 12 months as more brands have also started to make their way to Reddit. Because I remember when I first started talking about Reddit marketing, it was probably 2015, 2016. And it was right around when Dude Wipes actually, I think was starting to get big on Reddit. And there was this guy that I knew from LA, his name's Greg Barrett. And he was kind of known as like the Reddit guy that brands go to because he could pull off, he could find like influencers or talent and do some sort of a viral thing inside subreddit communities.

12:48which would get everybody talking about it and get it to trend to the top. But that obviously is so different from the type of stuff we're talking about here and how Reddit advertising has shifted in general. But I'm curious, what has shocked you in the last 12 months or so? Yeah, I'd say a couple of things. One is just how niche the world is, and just rather how many niches the world has. The more I talk to brands, the more I talk to retailers, Because products and categories that I never would have expected have a home on Reddit, turns out have vibrant communities on Reddit. A friend has a daughter with a certain genetic condition, and turns out there are a community of parents who talk about managing that condition.

13:34Whether it's the pharmaceuticals part of it, or whether it's the lifestyle part of it, and all the products that are associated with doing that and managing that condition. I think I continue to be surprised. And it's really fun because I've been at this company now for four years, and I'm still discovering facets to what Reddit can mean to people in ways that I didn't know before. So that's a little bit about the platform. But in terms of what has surprised me about the product, it is remarkable how fast you can improve a product when you have a small group of people who are passionate, who have done this before, who are trying to then shape a product in Reddit's image, so to speak.

14:12but also with like the power of LLMs and modern AI tools. Things like having a product knowledge graph, things like post-understanding, things like product understanding. Simply having access to LLMs allows us to do things at scale that maybe 10 years ago, we would have needed armies of labelers and people to do that we now can do in a couple of weeks. And that I think is like the underspoken about backdrop to all of the product improvements that we've been spending time on. Yeah, it's so cool to hear that because like, so behind me, I have four Mac minis all set up as open claws. So you're the person who's like leading to all of the stockouts on Apple.

14:52Exactly, it's people like me. But you know, I've used it to completely change my life from whether it's small side projects I have going on where each agent is like a GM of a brand and knows everything about it, is listening to all those call recordings, those emails, etc. Learning separate skills specifically for that. And I know it's starting to happen, like Brex, for example, has announced on Twitter a few weeks ago that they use every, I think employee is paired with an open claw so they can get a ton more stuff done, for example. But it's so cool to hear that even a company like Reddit is starting to take advantage of this.

15:30And it's allowing people to just ship way faster. No, 100%. Like so much of my time goes into both using it myself and figuring out things that would have taken me twice as long that I can now do in half the time. And both like things that in a world where I'd have to do it myself, now there are like almost new use cases being unlocked. This shows up in our product building. So for example, something we'll talk about later is deciding what subreddits a brand needs to know about, right? And the thing about subreddit nomenclature, it's like it's really hard to figure out for a lay user. The best news and like pop culture subreddit that I follow is called Fa4moi.

16:10So F-A-U-X-M-O-I. Zero chance that if you didn't know what you were looking for, that you would like find the subreddit. But the thing is like for a model to know this, for an agent to figure out that, hey, this user is into this type of content and this subreddit has the type of content that is useful to them. That is much easier than for a human to look at like the text and figure it out. So things like that were able to solve a lot of problems that have been much harder to solve. with agents. So despite Reddit being what, 2000 people strong, we're able to accelerate our roadmap much more than I would have expected 18 months ago or 24 months ago.

16:46Totally. Amazing. And so I want to hear a little bit more about product stuff. So walk me through some of the new stuff. So you have catalog ads, you've got the Shopify integration, there's community overlays, contextual targeting now, you know, for a brand that's listening and thinking, I took a look at Reddit, I, you know, maybe even brought an agency on to take a look at it, or I wanted to take a look at it. You know, what are the things they should know about what is different now? Yeah, I think from my conversations with brands, everybody has attempted to participate in the Reddit conversation, whether it's paid or organic or some point.

17:23Usually, I can predict their opinion based on asking them at what point they attempted this first. I say this to say that this platform is developing and adapting rapidly, like Reddit ads today versus Reddit ads 12 months ago or 48 months ago is like dramatically different. The types of things the product I lead is dynamic product ads. The types of things that exactly is our performance stack is getting dramatically better. In the last one year, we've shipped launches that increased to was 91%, so close to double. And we still feel like we're scratching at the top of the surface, like there is so much left to do and I can talk through the types of things we're thinking about.

18:02In terms of formats, for the longest time, the only format we had was like a standard vanilla product carousel. Someone we both know, so Dan Patello at Marpipe, someone we're working with to make these formats more attractive, more engaging, and so on. We're building stuff first party. So for example, we know that, let's take the Bose QC35 is a product that is disproportionately purchased by Redditors. It is now possible for us to add a sticker on top of that product image to say that, hey, this is popular with Redditors, for example. I know you said as an example, but the same sentiment is true across many other products in many other categories.

18:45Collection ads and the theme of making things that are Reddit unique, I think, is what that keeps us up at night. DPA has existed for a while. Meta has had DPA for a while. Google's had DPA for a while. So if we're coming into this conversation a couple of years after, what does it mean to create dynamic product ads in a way that feels native to Reddit and the fact that there are these distinct communities and humans talking about products? So those are the types of products that I'm excited by. If you were to look into the next year and so on, the broad themes, if I were to stay far from the specifics, but the themes are contextual relevance and behavioral relevance.

19:24How do you get an ad to be relevant to Nick when Nick is on this community at this point in time? And that ad should be different from Nick on this other community two days later, right? So the intersection of like behavioral, like what Nick is interested in and contextual in terms of like what subreddit Nick is on, I think that's a little bit like the art of the technical problems that we're doing as well. I guess these are all tools, right? Like the community overlays, the Shopify integration, but are there a set of tools on top that allow a Reddit marketer to use these together or individually at a higher capacity?

20:03Yeah, so a couple of things. One is dynamic product ads is heavily automated. Like so much of the automation is driven by the perspective that It is easier for us as Reddit Inc. to understand the plethora of communities that are available and ensure that impressions show up at the right community to the right user at the right time. So as a consequence, DPA on Reddit is as simple as you plug in your catalog, you give a signal, so that's PixlrCAPI. And now with the Shopify integration, that becomes much easier and close to one click. And then we will find the most valuable impressions for you. So that's the automation part of it versus a marketer trying to figure out, hey, what are the top five subreddits or interests that they want to target?

20:47All of that is possible as well on Reddit. You could do that. But the spirit of automation with some of our recent launches on Reddit, Max and DPA, the spirit is to take some of that, the judgment and the burden of thinking from the marketer onto the platform and do hopefully a better job. That said, insights is a big, big thing that I keep thinking about. Like a lot of it is also translating these millions of conversations that are happening every day into actionable insights for marketers. So right now we have this product called Reddit Pro. So if you're a brand, if you're a DTC brand, and you're trying to figure out, hey, I want to know conversations.

21:24Let's say you're a DTC brand on like a certain kind of seasoning for cooking. What are people talking about in terms of seasoning on Reddit? Let's say you make a certain kind of vegan seasonal. What is the vegan community talking about on Reddit? What are the top brands that they're talking about on Reddit? Reddit Pro is a product which is intended to be a free product. Think of it as a home for a brand on Reddit, right? So you create a u slash brand and you get access to insights about your product category and so on. The advantage of this is that the same u slash ends up being your username that is used to push ads on Reddit, right?

22:03So it's all coming from the same home. But I see all of this as like the first of a long journey in terms of insights, like actionable insights. The types of things that I like to enable for brands is, hey, vegan seasoning is trending this month on credit on these five communities. Like start a campaign to target these users, right? Like something actionable like that. We're probably a few quarters out, but that's the directionally the types of things we're thinking about. Amazing. And well, first of all, Reddit Pro is so cool. I've never heard of that being a available tool, but I think that's sick because it sounds like it's a little bit like trends in a way, but a much more deeper understanding because Reddit holds all that conversation and all the upvote, downvote, sentiment, et cetera.

22:51A hundred percent. I'm happy to send you a couple of Reddit Pro links so you can add it to the show notes. But Reddit Pro is a really cool product and I think really valuable. The mental model is so much of the internet and large companies usually started with an organic presence for brands first, and then kicked off a paid business, right? So on Google Maps, you had businesses show up, and then a way for them to get more distribution is via Google Ads on Maps. For Reddit, it was a little bit the inverse. Like we built out this sophisticated ads platform, but there were pockets of businesses using Reddit, either in their own communities or to participate in larger communities.

23:29And Reddit Pro is a product to make that easier. So publishers are using this, brands are using this, and it's still in its early days. So there's a lot that needs to be built. But I think it's like a great product for brands to use to access conversations and humans on Reddit. Yeah, fully agreed. Time for the retention tip of the week brought to you by Instant. Here's a benchmark I use when I audit brands. What percentage of your total email revenue comes from triggered flows versus campaigns? If you're below 50 % on flows, you're over-relying on batch sends and promotions. If you're at 70 % or above from flows you're in a great position.

24:06Now why does this matter? Campaigns go out when you send them not when the shopper is ready and they're one to many and they train your list to wait for discounts. Triggered flows on the other hand are one to one. They fire based on behavior. Someone abandons the cart. They browse a new category. They hit the purchase anniversary. They become inactive. They're more relevant and they convert higher as a result and they don't require you to constantly produce new content. The brands I see winning at retention have deep flow architecture, not just a welcome and an abandoned cart. I'm talking browse abandonment by category, post-purchase by product type, win-back sequences by purchase frequency, VIP milestone triggers, price drop alerts, back-and-stock notifications, layered flows that cover the full customer lifecycle.

24:50If building all that sounds overwhelming, Instance AI does that for you. They generate hyper-personalized flows that trigger in real-time behavior, and they're live within minutes, not months. And if you want to make campaigns as dynamic as your flows, Instant can do that too. Head to instant.one slash Sharma. Okay, I'd love to move to the creative piece. So, you know, creative is, I think, a piece that so many brands get completely wrong. It won in general across most platforms. You know, they try to show up way too polished and very produced. but Reddit is actually a place where it polished and produced does not land at all.

25:26And, you know, as a result, they'll say, oh, Reddit doesn't work for us. Our audience is not on Reddit, which is so false. But the issue isn't here that really the platform, it's the polish, it's kind of like the wrong language or the wrong accent to speak in on the Reddit platform. So, you know, I'm curious, like, why does polish die on Reddit? And what is it about the platform that punishes that style? It's also very similar to some of the short form platforms where if you run polished ads, you almost get scrutiny for it. Yeah, no, I think that's exactly right. And I love your metaphor for it, like it's the wrong accent.