Reddit earlier this week announced the launch of Upvoted, a new publication featuring original content from a team of staff editors and writers.
Reddit has more than 202 million monthly users. Its podcast have been downloaded more than 1.6 million times since January, and its newsletter has hundreds of thousands of subscribers, according to product manager Heath Black.
All Original Content
Upvoted will feature 10 to 40 stories a day, inspired by Redditors’ posts.
Content will be original, not aggregated and repackaged.
To monetize, Reddit will carry sponsored content that’s clearly labeled as such, but it will not feature banner ads — at least, not at launch.
All articles with an attributable source on Reddit will carry a link to the creator, the community, and the original post.
Photos run will be attributed.
Comment embeds will be used so readers’ actual comments will be published.
Reddit will send a personal message to subscribers if it publishes an article on Upvoted featuring content they uploaded to the site or a thread they created.
Upvoted is “a weird amalgam of an aggregator site like Drudge and a Facebook page,” remarked Mike Jude, a research manager at Frost & Sullivan.
“It’s a crowdsourced news site, and the fundamental assumption here is that social media is capable of effectively doing an adequate job of collecting and displaying the news,” he told the E-Commerce Times. “I’m not sure the basic premise is correct, though; essentially, it’s stepping away from the news requirement of objectivity.”
Money From Advertising
For sponsored content, the Reddit editorial team will pitch story ideas to brands and then own the entire editorial process. It’s not clear exactly what that means.
Reddit has created limited space for sponsored content on Upvoted.
“Reddit does need to monetize and make a profit, or at least show a solid path towards profits for its owners — most notably Conde Nast, but also later investors like Peter Thiel,” said Alan Pelz-Sharpe, a research director at 451 Research.
The site’s not alone in taking this approach to monetization, he told the E-Commerce Times.
This “is an issue that’s starting to hit a lot of Silicon Valley ventures,” Pelz-Sharpe said, “as the IPO environment isn’t improving, institutional investors are becoming more wary of successful firms that don’t make money, there are few buyers around prepared to come close to the market caps, and more speculative investors want their money back at some point.”
Further, Reddit faces a threat from ad blockers, which are “crossing the chasm into the mainstream” and depriving it of a revenue stream, he said.
Selling to a Tightly Targeted Audience?
One good thing about ads on Reddit is that they will be served up to a more tightly targeted audience than ads in publications going to a general audience.
Reddit “is basically managing the flow of content to interested parties,” Jude pointed out. “It’s the same thing as want ads — you pay for your pitch and categorize it by subject matter, and the newspaper charges you so much per word based on the number of subscribers you have.”
That already is being done in infomercials on TV, he said, and the value proposition to advertisers and Reddit is obvious, “but for a consumer — especially if the idea is that this is a news source — I wouldn’t trust it for poison.”
This approach to sponsored ads won’t impact the line between journalism and advertising as “advertorials do work and are not new,” Pelz-Sharpe suggested.
Other companies will follow suit, he predicted, because “the age of banner ads on websites is coming to an end, the lack of real estate on mobile devices makes ads particularly annoying in a mobile world, and it’s the next logical way of connecting with buyers.”