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Inside Reddit's Plan to Become the Next Giant Ad Platform
00:26:42
Next in Media spoke with Mike Romoff, Reddit's newly installed Chief Revenue Officer, about how the company has thrived amidst so many changes in consumer's social and digital habits, and why he thinks the company is 'having a moment' that brands are looking to capitalize.
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- [00:01]
Mike Shields
Stop wasting your retail media budget on the wrong audience. Epsilon Retail Media offers the first platform to unite AI with person first identity, delivering better outcomes for advertisers and higher returns for retailers. It's the most intelligent retail media platform out there. Learn more@epsilon.com retail media that's epsilon.com retail media. This week on Next to Media, I had a really fun conversation with Mike Romoff. He's an ex Google executive who recently became Chief Revenue Officer at Reddit. Mike and I talked about how Reddit has gone from something brands were wary of, something that started brand saved and vital for product recommendations in niche communities. Mike also gave his take on where Reddit fits as AI search becomes more prominent and whether it even wants to play in the post cookie ID wars. Let's get started. Hi, everybody. Welcome to Next to Media. I'm Mike Shields and my guest this week is Mike Romoff. He's the Chief Revenue Officer at Reddit. Hey, Mike, thanks for being here.
- [01:03]
Mike Romoff
Hey, thanks for having me.
- [01:04]
Mike Shields
Excited to talk to you because you just got there and Reddit's such an interesting place. And it's funny, I was thinking about this, right, right before the call. I had a buddy a couple years ago who was looking for a sales job and he was, he asked me, like, do you think I should talk to Reddit? And I was, and I remember saying, like, I don't know, man, it's like so big, but it's got that, it's, you know, that whole category has got that weird association and so unfiltered. What's. What a brand's going to think. That seems to have really changed in the last couple of years. So how did that happen? I know you just got there. What are you seeing? What was your, what was your consideration when you thought about, yeah, well, look.
- [01:37]
Mike Romoff
I'll give you my view from two months in, right? Like, Reddit is having a cultural moment right now. Like, I think that's one of the reasons I'm on the show with you. You know, I got announced two months ago. Pretty much everyone I knew came out of the woodwork, you know, to say, oh, I'm like a dedicated Reddit user. I'm there every day. You know, I got a pin from one of my, you know, CEOs of one of the other platforms who I know well is like, yeah, I'm one of your DA use. But a lot of people are saying, you know, I keep finding myself on Reddit, like, I'm growing a figure way.
- [02:07]
Mike Shields
More mainstream than it once was.
- [02:08]
Mike Romoff
I think yeah, like, and, you know, it starts out maybe unintentionally, and then I think what's happening is people are realizing that the answers to what they're looking for, you know, are on Reddit. And so, you know, I think from a brand perspective, like, our platform is a place where all brands are really appropriate. Like, there's so many topics, there's users who have interests across pretty much any interest and actively engaged. So yeah, I think we're having a moment right now and I think people are really taking notice.
- [02:38]
Mike Shields
So you hinted at this, but the idea that people are ending up there a lot more, I don't know if you can quantify this, but there are people that I think just go to their favorite Reddits on particular subjects every day, like you said, and the people that get there through search, a lot. You've had a recent big Google deal. Can you talk about that and its importance and how it's changed, maybe traffic pattern?
- [02:56]
Mike Romoff
If you think about what Reddit is, right. Reddit is a community of communities at its core. There are people who are so passionate, right, about individual topics, you know, some that are super esoteric that they devote their time, you know, to curating and really nurturing these communities of users. And so, you know, Reddit has been around for a while, like almost going on two decades. So we've got this incredible corpus of, you know, human thought with all the metadata around it of upvotes and downvotes, what people engage with. Like, it's an incredible data asset. On top of that, like every day people on Reddit are talking about, you know, brand new things like what's happening in the news, things that are breaking. So you've got this, you know, historical corpus and you've got real time, like, perspective on pretty much every topic. That is just an incredible asset. So, you know, strategic partners like Google and others recognize how important that asset is. But if you think about it, even from Reddit's perspective, it's how we can leverage that data and information for our users, for our customers. When we think about how AI actually helps our advertisers drive performance, like, we're sitting on just a goldmine of real human information. And I think the market really is taking notice of that.
- [04:19]
Mike Shields
It's funny you say that, like, by a lot of social media logic, you shouldn't be around, like, Reddit is old, which is not always good in social media. It's not, it's text based. It's not, you know, it's not social video. It's Not. And it was once purchased by Condon. Ass. That should have ruined it. Like, it's just, it's a crazy survivor tale and to be thriving now.
- [04:39]
Mike Romoff
I think, I think in many ways Reddit's been doing its thing for a long time and the world is like moved closer to Reddit, you know, as everything is AI or paid influencer or you're not sure about the source. Like Reddit has, you know, all over the platform, authentic users talking about things authentically. I'll give you an example. Like, I'm a musician. I play lots of instruments, but I love electronic music. And more than playing electronic music, I love buying equipment for electronic music. Like, that's really my hobby. And so, you know, I find myself on the synthesizer subreddit, digging through these esoteric topics and it turns out there's like tons of people who are just like me. And so if I pose a question, you know, I'm like, I'm looking at this, you know, synthesizer versus that one. There are experts within minutes who you.
- [05:27]
Mike Shields
Can hear from somebody like it's a, it's alive.
- [05:29]
Mike Romoff
They're like, I have that one. You know, I'm the guy who worked this factory and I'll tell you, like, they changed the production. Like it's people who are really passionate about these subjects. And I think as there's more and more sort of AI generated content or made for advertising website, and I think that comes up more and more, we're kind of the antidote to that. And so I think it's not coincidental that, you know, we're having this moment right now.
- [05:53]
Mike Shields
I want to ask you, you mentioned there's a bunch of questions I want to ask you about the advertising business, but you mentioned AI. Anybody who's in, in like the text publishing world is nervous, right? Anybody who relies upon search is nervous. You're having this moment when, when theoretically everything is changing or might be changing in terms of the way people navigate the web. Is that going to be a big challenge for you? You see anything yet? I mean, you just got there, but like, is the company having to adjust or is it good? Could it be a win for you, this conversational search?
- [06:22]
Mike Romoff
Yeah, it's an opportunity for us, right? Like we've got the assets that I think people are hoping for, right? Like really large scaled organic engagement across pretty much any topic stretching back longitudinally, but also in real time. I think the opportunity for us is from a discovery perspective. How do we make it easier for our members who come to our app or come to the site to express their intent, which they do, and not just go into individual conversations. But, you know, see the best of Reddit, sort of presented in a, in a way that's easier to find and you can kind of see how that draws a straight line to the advertising side of the business. I mean, people come to Reddit to help make decisions on like, things they want to buy, get recommendations. A lot of it is like post purchase validation. Like that was a surprise to me in that, hey, I've just bought this car, now I'm going to go and just, you know, validate the fact that I didn't make a stupid decision by buying it and be with people who love the things I love. Like that is such an interesting use case, both from an organic, like member, you know, interaction perspective, but also as an advertiser. Like if you're that car brand, like you want to be in the place where someone is trying to feel good about the big purchase that they just made.
- [07:38]
Mike Shields
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- [08:43]
Mike Romoff
Yeah, no, no, it's, it's. I mean look at our core, we have highly engaged users who are, you know, expressing intent on things that they really care about. Like that is a huge asset. How we monetize that. Like we can think about it contextually. So if you're like a GM and you're launching a car brand and you want to get big reach. You take over the automotive category and you're reaching millions of people who are expressing an interest in that category. And so we get lots of budget in that awareness stage. At the same time, like T2C, thinking about lower funnel performance, you're in certain categories where you're like, oh yeah, I'm looking for a specific solution to a problem. Oh, here's the brand I'm going to click and buy. Right. So increasingly, you know, an SMB and mid market dtc, we get lower performance. I think the real, you know, sweet spot for us is that middle. You know, if you think about consideration, how do you go from, yeah, I'm looking, I'm in the market for an electric car. I kind of know Tesla, I kind of know some other brands. How do I go from that to all right, I'm going to go to.
- [09:51]
Mike Shields
Pretty serious, but I'm not pulling the trigger tomorrow.
- [09:53]
Mike Romoff
Kind of like that's like, that's where people come to Reddit. They're like, let me go on the Tesla subreddit. Let me really interrogate is self driving for real? What are people's experience? How does it compare? And so they're getting real recommendations. So if you think about it from an advertiser perspective, we get lots of budget from awareness and reach and we're scaled platform. I think people are surprised at how scaled we are when they see our daily active numbers. And we do lots in terms of lower funnel performance. But I think where you can take that general awareness and really drive it to a decision where like, oh yeah, I was kind of in the market. Oh no, that's the brand that I like. I'm going to go buy it. I think that's our sweet spot. We get money there. But two months in, I feel like that's some of my work to do. And how do we tell that story? How do we instrument it so it's easy to understand?
- [10:47]
Mike Shields
Yeah. So what is your, what is your mission or your first hundred days plan? Is it, is it education? Is it trying to talk to the different levels of the funnel and different agencies and brands, like, what's your plan?
- [10:57]
Mike Romoff
Yeah, like I'd say that it's actually telling the story. Like there's a reason I'm on this podcast with you to list into the role.
- [11:04]
Mike Shields
This will be taken care of once this podcast hits. You don't have to worry about it.
- [11:08]
Mike Romoff
Great. Is that the team here is awesome. You know, there was an analyst report that went around the first week I was here. One of the strengths for the business was that everyone loves our sales team. And I can tell you, like, that is not universally true in media sales teams. I believe that we've got a great team, we've got a great reputation, people want us to win. Like that also is not necessarily true of every platform and media operation. And so we've got a good foundation, I think just bringing more awareness to how scaled we are. Like the ways that you can engage with like our audience who are telling you what they want, like they want brands to kind of engage with their communities in a way that's additive, in a way that's organic and authentic. Like, that is a really unique and interesting story. And I think we've told it, but I don't think we've told it broadly enough and loudly enough. For me, it's getting out in market, you know, hearing from customers, their understanding of who we are and then even co creating. Right. What that positioning looks like.
- [12:10]
Mike Shields
Do you get the question? Anybody who's in any sort of user generated platform gets the brand safety question or the moderation question? I guess. So are you, are you hearing that from that concern from brands? And what do you tell them? What's the answer?
- [12:25]
Mike Romoff
For sure. I mean, it's top of mind for us and I think in a historical basis it had been more of a concern, I think in recent years. And I don't think we've announced it yet, but we've got some work with IAS that's about to come out where we are essentially at the top of the mark for brand safety for them. Wow. And again, that's part of me telling the story. Like it's not that we've actually like made progress. Like we had a clean bill of health and we're at the top of the class. And some of that is because at the platform level it's been a huge focus and we've got lots of tools and teams that are focused on.
- [13:00]
Mike Shields
So you did like the work, you do the cleanup work at some point for.
- [13:03]
Mike Romoff
I can't take credit to my friend. Right. You know, the team here, I mean it's, it's been a huge amount of effort. But the other side of it is that because Reddit is based on a community of communities, like each community has its own norms and codes of conduct. And so there's universal codes across Reddit as a platform that we enforce, but content that's not appropriate for certain forums gets banned and booted not by us as the arbiter, but by the communities themselves. And so there's a really strong self policing that goes on. They are dedicated to nurturing those communities and so they don't want things that are, that are not appropriate. Right. Or they're not up to the norms that they have. The other dynamic is upvoting and downvoting. And so, you know, if you've got content that's in a community that really isn't appropriate, it just doesn't see the light of day. So, you know, even things that may not run afoul of the norms that get banned just doesn't get the kind.
- [14:02]
Mike Shields
Of, they just kind of get buried.
- [14:04]
Mike Romoff
Yeah. On other platforms, things that are polarizing get engagement.
- [14:08]
Mike Shields
Yeah, we've all seen that's actually the secret to some of those engagements sometimes in those platforms.
- [14:12]
Mike Romoff
Right. We've seen that story in Reddit. Those things kind of get neutralized. Right. Because even if people upvote, the same number of people downvote, you end up kind of not going anywhere. So lots of focus on it. I'd say, you know, that's a strength for us. You know, after a lot of hard work.
- [14:26]
Mike Shields
This is a weird question, but you made me think about the communal nature of Reddit and how some of these members come all the time and almost like a regulars. If you are, is there a, like, is there a creator play for advertisers? Like, are there leaders of these communities that could become part of an ad campaign? Or is that not really the nature of the product?
- [14:46]
Mike Romoff
It's not. And part of the credibility of the platform is that the moderators that are nurturing these communities don't have commercial interest. Right. Where, where it starts to be like, are you saying that because you're getting.
- [14:58]
Mike Shields
Paid or like they're not the star of the show and they're not trying to totally.
- [15:02]
Mike Romoff
Your Reddit is all anonymous. It's not about individuals getting followership. It's like all the dynamics that you see that kind of lead to bad behavior. On other platforms, those are absent. And so in its place, you've got people who just really care about the topics that they're passionate about, but they're welcoming to brands, like brands coming in and participating in Ask Me Anything where they come in and actually engage with the community in a real two way conversation. The stats around that the brand lift, like the favorability ratings, like all of the benefits that go to advertisers who approach those communities with authenticity are huge. And I think again, compared to like, you know, more paid influencers or where you're not sure is this like paid or not like this is kind of the opposite. They're like, hey, I'm, you know, a brand, I'm super interested, you know, in your community. Let me in and let's have a conversation about it.
- [15:55]
Mike Shields
On that note, what are some good examples of brands doing it the right way? Because I'm sure there's examples of brands just pushing out promotions and hitting the high intent audiences, which is great. But what are some good examples maybe of brands kind of embracing the nature of the profit?
- [16:11]
Mike Romoff
I'd look at something like Samsung, who's one of our big strategic partners. They've got every part of our funnel covered. They're doing broad reach on big announcements and so they're leveraging video creatives and rich media. They've actually created original content to run on Reddit. And so not just taking like, yeah, here's the thing, we ran somewhere else. We're just going to run it with you guys, like taking the time to understand the nuances of what really works on the platform. We have a team called the Karma Lab that's sort of like our internal creative works, you know, who works with our bigger brands to really help them understand, you know, what are the insights, like how do you actually find, you know, the nuggets that you can use to create a campaign around? And so they've done a really great example of that. I mean there's, there's tons of examples from the biggest advertisers down to SMB, which is frankly more of a focus for us now. You know, self serve small businesses. How do we, you know, get them, you know, really short time to value with our self serve platform and that's going to give us, you know, even more advertiser diversification. Yeah, it's a virtuous circle.
- [17:23]
Mike Shields
That's the secret to the, you know, the big platforms really is the breadth of their ad base. Right. And so many. How do you get small businesses to start? You can't. Other than you running around the country like, how do you get those folks to think about it?
- [17:35]
Mike Romoff
Yeah, just before joining I was at Google for the last four years. I ran the small business sales in the US and what's counterintuitive is that a $10,000 budget for a small business is more precious to them than $10 million budget for.
- [17:52]
Mike Shields
Right, right. They got a lot weighing on that budget. You can't screw it up.
- [17:57]
Mike Romoff
It's livelihood. And so they really care about is that investment working for me and how quickly does it work for me. And if we can solve that problem and We've got lots of really good signal on site. Right. They know what they're trying to do. It's mostly sales. You know, in some cases it's leads. If it's, you know, more of a service, this kind of business, we have products that are tailored for those specific outcomes. And so can we make it easy for them? What are you trying to do? What's your budget? You know, what are sort of the parameters around how you need the economics to work? And then how easy can we make it for them to engage with through machine learning, through AI, through our tools and automation, you know, get to the outcomes they want in terms of how do we reach them? Nothing succeeds like success. And those guys all talk. So we're seeing a lot of success, not just in the US but in some of our international markets in actually driving product adoption, getting real results for small businesses. And that just starts to drive the curve up.
- [18:54]
Mike Shields
I do want to ask you about international, but first, I should have started this, asked you a while ago. You've hinted at this a little bit about the kind of targeting that's available. You know, we're at this, we're at this moment where there is, there's sort of like an addiction to performance advertising or between retail media growth and then this, this thinking that you have to have identity for everybody or you're in trouble. I don't think you're playing that in that game. But you tell me, like, where, where do you see yourselves going there and what makes sense?
- [19:19]
Mike Romoff
It's a great question. We're specifically not plaguing that game. You know, like part of the commitment to our, our users is that, you know, we're not creating dossiers like they're anonymous when they're on Reddit and they're participating.
- [19:31]
Mike Shields
That's part of the appeal. The appeal?
- [19:33]
Mike Romoff
Yeah, that's just part of the DNA of who we are. But on the flip side, we get a ton of really strong signal, right? So we know the communities that people are active in. We have keywords based on posts and the conversations that they're in. And so it's a combination of all those signals, like contextual, keyword. And then especially for users who have know history, you can think about how that translates into advertiser performance. What we're not doing is, you know, looking at other behaviors around the web, like we're not, you know, trying to build those kinds of cookie profiles, like all the things that a graph of.
- [20:13]
Mike Shields
Someone going all the place. That's not your job.
- [20:14]
Mike Romoff
No, we're seeing what our user base is expressing on site and that's a strong enough signal for us to really be able to drive, drive performance. So like, as these debates rage, you know what's going to happen? Cookie deprecation, you know, all that kind of stuff. You know, we're actually really well placed for that because that's not core to our business and we're so scaled on platform, you know, we're not really thinking about an off platform business. We're thinking about how, you know, that's.
- [20:40]
Mike Shields
Not a problem for you. Running out of real estate.
- [20:43]
Mike Romoff
That's right.
- [20:43]
Mike Shields
Do you talk to the programmatic teams and they're like, no, I, I need to match up my, my first party data. I can't really. This doesn't make any sense for me or you. Is it coming from those same channels?
- [20:53]
Mike Romoff
It's, it's coming from the same channels. It's, it's. I would say the objectives are all the same. Right. The way that we, the tactics that we use may be slightly different. Right. So in the end, like if you're, if you have a big product launch or you know, we get a lot of budget from entertainment around movies, right? Cause we have a big general audience, a lot of conversation around, you know, specific movies and all of that. And so, you know, they're like, hey, we want to reach people who are expressing certain characteristics based on their interest and intent. Maybe they're participating in, you know, the Moana one, you know, conversation. And now Moana two is coming out and you know, we want to make sure that we're engaged with them. Like and sort of a simplistic example. But you can, you can see how we just take the contextual information keywords that we have and use that against just standard marketing objectives. Like, I don't think there's a contextual budget that we're going after. It's just the standard, you know, awareness or performance and that we've got our tools in the toolkit to make that happen for customers.
- [21:58]
Mike Shields
You know, it's very sad my, my kids because Moana 1 came out a while ago. They've aged out. They don't want to go. And I'm like, well, someone, they don't.
- [22:06]
Mike Romoff
Want to go with you is that I'm not sure.
- [22:08]
Mike Shields
I might go into Reddit and try and find somebody to go with me at some point. It's, it's because I want to know what's happened. You mentioned international. I don't, I don't know historically how us centric, Reddit was or wasn't. But where are things headed today? Catch us up there.
- [22:22]
Mike Romoff
Yeah, I mean, we're pretty US Centric and English language centric in our history and machine learning and language translation has reached a point where we're actually in the process of translating the content on Reddit into multiple languages, which will help us open up more markets. So we're big in English language speaking world, so the US uk, Australia, Canada, know a few other countries where we've got traction, but really once we're, you know, in Spanish and you know, sort of the bigger languages spoken around the world, you know, that will open up organic engagement on the platform in those countries and then we'll have monetization and sort of the whole market development that comes from that. So it's pretty exciting. Like, it's fairly nascent. We've got some tests that are showing positive results in terms of translating into multiple languages and then users engaging in that language. I just think it's cool, like you can have a single conversation where users who speak different languages are all contributing to one thread and it's all being translated in their own respective language. I don't know another place that that's really happening.
- [23:32]
Mike Shields
No. Where you can actually have like, quote unquote, digital friendships all over the world. That, that, that's pretty wild.
- [23:37]
Mike Romoff
Yeah. So, you know, I mean, look, part of our, the mission and the purpose of the company is to bring community and empowerment to the world. I think that's like a clear embodiment of us, you know, realizing that, that mission.
- [23:48]
Mike Shields
Last couple of questions for me, like you mentioned a few times, the power of the recommendation that are coming out there. How do you, why is that so valuable? And how do you like, maybe turn, do you turn that into a product almost for brands to try and touch themselves?
- [24:00]
Mike Romoff
I think those are our ad products. Right? Like, I think, you know, you're exactly right. Like, our ad products are about, you know, the conversations that are happening on Reddit that are specific around recommendations around like, specific products. You know, there's, there's some research that more product conversations are happening on Reddit than any other platform. Right. And we can, we can show that through research. And so if you're a marketer, like, you want to be in that conversation, right. You either want to have awareness because, hey, you're a challenger brand. People don't even know to consider you. So let's make sure that you're there. Really, you may be, you know, one of the brands in consideration. How do you translate that loose Awareness to conviction that, you know, that's a product that I want to buy. That's what's happening on Reddit. Our products are tailored to, you know, be that conduit to your question. Like, that's what the team is focused on. And as we keep developing, you know, with AI, with more signal, the way that we're, you know, continue to refine, that's, that's the use case.
- [25:05]
Mike Shields
And then lastly, you know, anything that surprised you since you've gotten there, are there any. Are there any situations where, like, I didn't know there was a passionate community about X? Like, anything, anything, any fun to share.
- [25:15]
Mike Romoff
From a community standpoint? I've become obsessed with Photoshop requests as a subreddit.
- [25:22]
Mike Shields
Interesting.
- [25:22]
Mike Romoff
It's like, you know, and like, you discover these things. It's a place where if you have a picture, you submit it and you say, I was at, you know, my wedding and there's this beautiful picture, but this guy in a golf cart, like, driving behind you take him out. Or like, my brother broke up with his girlfriend, can you take her out.
- [25:40]
Mike Shields
Of all these pictures?
- [25:41]
Mike Romoff
And then people do it and then there's like a tip jar.
- [25:43]
Mike Shields
So that's hilarious.
- [25:44]
Mike Romoff
They pay for, and it is hilarious. Just like the range of stuff, some of them are super poignant. You know, they were like, you know, my grandma passed away and we don't have a great picture. Can you use something for obituary? You know, and they do these like, amazingly creative things, you know, and then some are just super funny. They're like, you know, I'm kind of prank my friend, can you make it look like his car is in a lake? You know, and so just like, the range of creativity, I mean, I think, like, if you think about Reddit, it's kind of, you know, the broad scope of humanity. You get to see, like, super creative, passionate people in almost every subject. And for me, that's been super exciting.
- [26:22]
Mike Shields
All right, that's a perfect place to end my awesome conversation. Thanks for doing this and let's talk again soon.
- [26:26]
Mike Romoff
Sounds great. Thanks for having me.
- [26:29]
Mike Shields
Thanks again to my guest this week, Reddit's Mike Romoff, and my partners at Epsilon. If you like this week's episode, please take a moment to rate and leave a review. We have lots more to bring you, so please hit that subscribe button. We'll see you next time for tomorrow with nextin Media. Thanks for listening.