Streaming reshuffling, Omnicom-IPGs's second green light + inside Reddit's bet on becoming a search engine

Summary

The Digiday Podcast: Streaming Reshuffling, Omnicom-IPG’s Second Green Light & Inside Reddit’s Bet on Becoming a Search Engine

Release Date: August 12, 2025

In the August 12, 2025 episode of The Digiday Podcast, hosts Kum McCoy and Tim Peterson delve into significant shifts in the digital landscape, focusing on the evolving streaming industry, the regulatory green light for the Omnicom-IPG merger, and Reddit's strategic pivot towards becoming a search engine. The episode features an insightful conversation with Jen Wang, Chief Operating Officer at Reddit, providing listeners with a comprehensive analysis of current trends and future implications.

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1. The Streaming Reshuffle: Disney’s Consolidation and the Bundling Era

The episode opens with a heated discussion on the recent consolidation within the streaming industry. Jen Wang highlights Disney's strategic decision to fold Hulu into its flagship Disney streaming service following its acquisition of Comcast’s stake. This move signals a broader trend towards bundling, as Disney also announces standalone streaming services for ESPN and Fox.

Notable Quote:

Jen Wang [04:23]: “Netflix has Cocomelon right alongside all the serial killer shows. So as much as this is definitely a change, ... we're very much in the bundling era.”

Key Points:

• Disney's Strategy: Integration of Hulu into Disney+, positioning Hulu as part of the expansive Disney ecosystem which includes family-friendly content alongside more mature programming like "Only Murders in the Building."

• Emergence of Bundles: Introduction of bundled packages such as Disney’s ESPN and Fox One, priced competitively at $40 per month, compared to their standalone prices of $30 and $20 respectively.

• Market Implications: The shift mirrors traditional cable models, potentially simplifying consumer choices but also raising concerns about brand identity clashes and increased subscription costs.

Consumer Reactions: Kum McCoy expresses skepticism about how Disney will maintain distinct brand identities within a unified platform, remarking on the incongruity of hosting diverse content like "The Golden Girls" and "Bob's Burgers" under a "family-friendly" banner.

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2. Omnicom-IPG Merger Receives Regulatory Approval

Transitioning from streaming, the hosts discuss the recent regulatory approvals for the Omnicom-IPG merger. Both the UK’s Competition Markets Authority and the US Federal Trade Commission have given the green light, contingent upon certain conditions.

Notable Quote:

Jen Wang [12:52]: “... Omnicom and IPG not let politics affect how its clients spend. AKA don't be taking money away from X or Fox News because you're worried about brand safety concerns.”

Key Points:

• Regulatory Conditions: The merger approval includes stipulations that prohibit political interference in client spending decisions, ensuring that agencies maintain unbiased strategies regardless of political climates.

• Leadership Changes: Announcement of Cindy Rose as the new CEO of WPP, indicating a shift in leadership amidst the consolidation.

• Future of Agency Holding Companies: The merger signifies a transformative phase in the agency landscape, especially with the looming influence of Artificial Intelligence (AI) on compensation models and operational structures.

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3. AI’s Disruptive Role in Agency Compensation Models

A significant portion of the conversation centers on how AI technologies, particularly advanced models like GPT-5, are reshaping the traditional billable hours model prevalent in advertising agencies.

Notable Quote:

Jen Wang [16:40]: “... billing based on outcome, like paying for increased product sales or brand awareness, seems reasonable... but it feels hard to implement.”

Key Points:

• Shift to Outcome-Based Billing: Agencies may transition from time-based billing to payment structures tied to tangible outcomes such as sales lifts or brand engagement metrics.

• Challenges in Measurement: Determining the direct impact of advertising on sales or brand awareness is complex, necessitating robust measurement frameworks to ensure accountability.

• Economic Pressures: With rising operational costs and the potential for reduced margins due to AI efficiencies, agencies face financial strains that could lead to layoffs or a resurgence of independent, leaner agencies.

Future Outlook: The hosts speculate that the evolving landscape may foster increased competition and innovation, potentially benefiting the market through more diversified agency models and services.

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4. Inside Reddit’s Strategic Pivot to a Search Engine

The episode culminates with an in-depth interview with Jen Wang, COO at Reddit, exploring Reddit's ambitions to enhance its search capabilities and position itself as a key player in the search engine market.

Notable Quotes:

Jen Wang [27:51]: “We want search to be a navigation for you to find all the communities and find all the posts and all the perspectives that exist on Reddit.”

Tim Peterson [33:38]: “Reddit is in line with that. And you see our strategy is full funnel.”

Key Points:

• Reddit Answers: Introduction of Reddit Answers, a prototype feature leveraging AI to provide summarized responses from Reddit’s vast conversation corpus, aiming to enhance user search experiences.

• Unified Search Experience: Plans to integrate Reddit Answers into the core search functionality, offering users comprehensive navigation through multiple relevant posts and communities rather than a single thread.

• Monetization Strategies: While still in development, Reddit explores advertising models within its search features, focusing on contextual relevance and user intent to drive ad effectiveness.

• AI Integration: Utilization of large language models (LLMs) like GPT-5 to improve search accuracy, provide valuable insights, and enhance user engagement through tools like post guidance and community intelligence.

• Impact on Publishers and Advertisers: Enhanced search capabilities could increase referral traffic to publishers, while advertisers may benefit from more precise targeting based on Reddit’s unique conversational data.

Future Roadmap: Jen Wang emphasizes Reddit's commitment to refining the search experience, integrating AI-driven tools, and expanding internationally. The platform aims to balance user-driven conversations with emerging features that support both individual and entity-based interactions.

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Conclusion

This episode of The Digiday Podcast offers a nuanced exploration of the dynamic changes in the digital media and marketing sectors. From the consolidation and bundling trends in streaming services to the regulatory and operational shifts within major agency holding companies, and finally, Reddit's innovative strides towards enhancing its search functionalities, listeners gain a comprehensive understanding of the forces shaping the industry. The integration of AI emerges as a pivotal factor influencing these transformations, promising both challenges and opportunities for stakeholders across the board.

Final Thoughts: As the digital ecosystem continues to evolve, the interplay between traditional models and emerging technologies will be crucial. Consolidation in streaming and agency sectors suggests a move towards greater integration and efficiency, while platforms like Reddit are redefining user engagement and search experiences through advanced AI applications. The future landscape appears poised for significant innovation, driven by the relentless advancement of technology and shifting consumer behaviors.

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For more insights and discussions on the business of media and marketing in the digital age, subscribe to The Digiday Podcast and stay informed on the latest industry trends.

Transcript

[Kum McCoy]

Ready to shape the future of digital business? Then don't miss Demexico 2025, Europe's leading event for digital marketing and tech. On September 17th and 18th in Cologne, digital pioneers, innovators and decision makers come together to share ideas, network and shape the future of digital business. Expect top speakers like Carson Meschmeyer, Vanessa Stutzel, and Sir Martin Sorrell across 10 summits. Get inspired.

[Tim Peterson]

Be bold.

[Kum McCoy]

Move forward. [e-mail] hello. Hello and welcome to another episode of the Digiday Podcast, a show about the business of media and marketing. I'm Kum McCoy, senior marketing reporter here at Digiday.

[Jen Wang]

This is. And I'm Tim Peterson, executive editor of video and audio at Digiday Media. What's up, Kimiko?

[Kum McCoy]

It's going all right, Tim. It's going all right. Have you watched anything good as of late?

[Jen Wang]

We just finished the. This is on YouTube, Kimiko, which is a video platform that's an alternative to TV streaming. Although we're what, like a month out since we had Michelle Carre on the show and she kind of like had your company with YouTube. There is this YouTube creator, Ryan Trahan, who did a series where he and his wife went to all 50 states in 50 days. And so we finished that last night. So that was, that was a lot of watching. It. I think it actually, like ended two or three weeks ago, but we were, we're not watching day in, day out. So we finally got up on that. It was like, oh, this is what we used to watch on cable tv, which I may or may not be returning to, which we'll get to when we get to the new segment. But what about you? What have you been watching?

[Kum McCoy]

I was just about to say I am back on my Golden Girls tip because I can't find anything else to watch. Which takes us to Moore's News that we'll be talking about later, which people have been squabbling online about Hulu being folded into Disney. But before we get to this week's Juicy Scoops, I feel like I haven't said that in a while. Juicy Scoops.

[Jen Wang]

Maybe they haven't been juicy enough. They feel pretty juicy this week.

[Kum McCoy]

They do, they do. Before we get to that, we've got our guest for this week, which is Jen Wang, the chief operating officer over at Reddit, which is a super exciting conversation to talk about all of the changes that are happening in the search space right now and kind of how Reddit is capitalizing or trying to capitalize on that movement to build out their ads, business and whatnot.

[Jen Wang]

Yeah, I think I would describe the conversation as juicy and there actually may have even been a little juicy little scoop in there when it comes to the timeline for Reddit rolling out its unified search platform, which is something they talk about, talked about in their quarterly earnings call, but did not give much of a timeline for. But Jen talked a little bit about what the timeline is there.

[Kum McCoy]

Yeah, some, some big news coming out of there and then like they just released Reddit answers of their their own like search chat bot that like works in the platform. So we pelted her with a bunch of questions and she answered them for us about what the roadmap looks like for her. So super exciting conversation that we had with Jen. I'm excited to get to that after our juicy scoops.

[Jen Wang]

Yeah. And so let's get on with juicy scoops. This is not a scoop, but I am considering buying cable again because I think somehow we've reached a point where it feels like it's going to be cheaper for me to pay for traditional TV than all of these streaming services. Even though one of the streaming services that I am currently paying for, Hulu, will no longer be a standalone streaming service. So this past week, Disney, among a whole raft of announcements, it announced the SBN streaming services debut. The pricing is going to be for that. We'll get to that. But one thing it announced is Hulu is going to be folded into Disney. This comes after Disney bought out Comcast stake. So Disney now has full ownership of Hulu and Disney decided, cool, now that we own this thing, we're just going to bring it into the flagship Disney streaming service. You're a Hulu person.

[Kum McCoy]

Am a Hulu person through and through. Every time you turn that TV on, the last thing I watch is the Golden Girls or Bob's Burgers.

[Jen Wang]

So how are you feeling?

[Kum McCoy]

I here's what's weird to me. Hulu and Disney are two very distinct brands, right? And so like you've got on one hand only murders in the building and then you've got that being folded into a supposedly like family friendly environment, which is Disney, which is, you know, your Lilo and Stitch and your Marvel movies and things like that. So I don't know how they're going to merge those two brands, in my opinion, but I don't know. I'm not happy.

[Jen Wang]

Yeah, that said, I mean you have Nickelodeon stuff within Paramount Plus, I think I don't use Paramount plus, but they're owned by the same company. So I would assume in There, Netflix has Cocomelon right alongside all the serial killer shows. So as much as this is definitely a change, and even then not a big change, because Hulu shows and movies already live inside of Disney, which never ceases to be weird. When I open up Disney and the bear is the first thing that I see, or I don't know, a serial killer show. But it is just like as someone who's covered streaming for more than a decade at this point, I'm not sad about Hulu going away because ultimately these are just capitalist endeavors. I'm not going to cry over at the end of a capitalist endeavor. But it does feel like the end of an era of streaming and that we are very much in the bundling era, which has been a burgeoning trend for the past year or two. But now it seems kind of confirmed of like we are officially two feet into this new era where all streaming services are just getting bundled, including a new streaming service that has two new streaming services that haven't even launched yet. So Disney is going to roll out this standalone ESPN streaming service on August 21st, which will let people who are cord cutters access all things ESPN for the first time ever within streaming. That same day, Fox is going to roll out Fox one, which likewise is going to give you all things Fox within one streaming service without having to have a traditional pay TV subscription. ESPN streaming service is going to cost $30 a month. Fox One is going to cost $20 a month. But just today as we were recording this on August 11th, Disney and Fox announced, oh, actually there's going to be a bundle subscription where you can get ESPN and Fox, the two streaming services together for $40 a month. But that's not going to launch until October 2nd. So if you want the two as a bundle, you're going to either have to wait and sit out the first month of football and college football season, or you're going to sign up for the standalone streaming services. Or like me, you're going to think maybe Charter wasn't so bad. Maybe maybe they get my money again.

[Kum McCoy]

No, you talk about like in the the the $40 bundle cost savings and whatnot. And then you've got $30 here and $19 here. And this is on top of Roku's new 299 Howdy. Which we also their ad free streaming service that is also launching, that plays old movies.

[Jen Wang]

But you just can I put an ask out to the audience if there's anyone out there who is not a Roku employee and signs up for howdy and is paying for that. 1. I would like to see their receipt. 2, please come on the show and talk with Kimiko and I about like why you're on Howdy.

[Kum McCoy]

You doing on Howdy. What a name. But at least we've moved past the era of everything just having plus tacked onto the end of it as the streaming services name BET plus Paramount plus and whatnot Hill. No, HBO Max didn't do that.

[Jen Wang]

Anyway, long story short, HBO Max went through a whole series of different identities and finally came back around HBO Max.

[Kum McCoy]

Come full circle which as we are with the, with the cable conversation now coming back around full circle. But you're just being nickeled and dime for all of these different subscriptions to the point where like you're looking at what essentially is a cable bill. So if these cable companies are already offering you like I think we looked at, even if you go talk about like Charter, they've got Vixx, they've got BET plus, Paramount plus and a handful of others. So I mean, does it just make.

[Jen Wang]

It Disney, ESPN is in there, Peacock, HBO Max is in there. A lot of those are the ad supported tiers. So that is one thing for me who gets a little impatient with having to sit through ads of like am I how valuable is my time really? Because historically I've just been like, my time is valuable. I'm not sitting through these ads. I can report on these ads without having to experience the ads. I may have to sit through the ads again. But yeah, I mean, to your point of having to sign up all these different streaming services, I mean we have a very clear example now where if you're a WWE fan, so Disney, espn, as part of this raft of news they put out last week, like taking ownership of NFL Network and NFL Reds Zone with the NFL taking 10% stake ownership stake in ESPN. Disney ESPN also announced a deal with WWE. So things like WrestleMania, SummerSlam, the big WWE tentpole events, you're going to have to have ESPN for those. But if you want to watch WWE Raw, which is a weekly live event, you have to have Netflix for that. But if you want to watch WWE sponsors SmackDown, which is another weekly live event, you have to have Peacock or USA Network through traditional TV for that. So you have to have three different streaming services if you're a WWE fan. It's even worse if you're an NFL fan because you need to have access to ABC or ESPN, Fox, Peacock or NBCUniversal and either CBS or Paramount plus for that. So that's four and that's that's the era we're in.

[Kum McCoy]

No, which takes us back. Like, that's just like a lot, a lot of slicing and dicing, especially when you're talking about, like, the hellscape that is our current economy, you know, and people wanting to tighten, or not even just tighten their budgets, but, like, close their pocketbooks. Right. And so I. I almost wonder if, like, in the end of this, the initial pit was streaming services against cable companies. And I almost wonder if in the end of this, cable companies win because streaming just becomes cable all over again.

[Jen Wang]

Which in some respects, then it's. Well, it's not the streaming services that kind of win by extension, but the companies that own traditional TV networks and streaming services. Because the one thing that they've struggled with is in the traditional pay TV world, they were getting not only money from selling ads, but then also money from the pay TV providers. Because Comcast Charter would be paying to carry an espn. Well, no, Fox is a broadcast network, an espn, a USA network, all these different cable networks with streaming, they had to make up that difference by subscriptions and ads. But if there are so many subscriptions and people are having to choose which of these am I going to want to pay for and am I going to want to pay for this next month, or do I cycle out and pay for something else instead? You get back into a bundle that's a lot safer, more of a secure revenue stream for these TV streaming companies. A company like Netflix is a different situation altogether, but at the same time, Netflix is huge and doing very well. So it's a different situation altogether anyway.

[Kum McCoy]

Yeah, very have and have not situation there. So I guess, long story short, I'll be looking under Disney to find my Golden Girls content from here on out.

[Tim Peterson]

So.

[Kum McCoy]

So that's one merger. And on the other, we've got a major merger that's been sitting on the table that has been approved now not only in the US or given the green light, not only in the US but also over in the uk. And that's Omnicom and ipg.

[Jen Wang]

Yep, yep. So the UK regulator, the Competition Markets Authority, said last week, all right, whatever, go through with this, it's fine. We're not going to, like, recommend it for further review or anything like that. Just, like, do your thing. We got other fish to fry. And so this follows, about a month ago, the US Federal Trade Commission also clearing this deal with the provision that Omnicom and IPG not let politics affect how its clients spend. AKA don't be taking money away from X or Fox News because you're worried about brand safety concerns. That's a political decision and we're not going to have you have doing that anymore. So now it seems kind of like how we're firmly in this streaming bundle era on the streaming side of things. We're not quite in the new like agency holding company landscape, but we're definitely knocking on the door at this point once this merger officially goes through. And then also, you know, less than a month from now, September 1st, Cindy Rose is going to start a WPP as the new WPP CEO. And then as big a deal as those two things are, WPP getting a new CEO, Omnicom and IPG coming together, it still feels like the biggest change is not yet happened, which is what's going to happen to agency holding companies, compensation models as AI is doing more and more of the work, which is something that our senior media buying editor Michael Berge wrote about in his most recent media buying briefing.

[Kum McCoy]

Yeah, okay, that's the thing here, right, because you've got ChatGPT. OpenAI was just released.

[Jen Wang]

ChatGPT 5 GPT 5, not ChatGPT.

[Kum McCoy]

GPT 5, excuse me. And it's, it's more, I think it's sending us closer to the uncanny valley each day. We get a little closer to it, to the uncanny valley. But it's got personalities and it can, it's essentially it building on top of itself and you know, kind of delivering or attempting to deliver on the promise of like bigger, better, faster essentially. Right. And now that kind of calls into question. Like again, you've got agencies that are building on top of these models and if that is the, the, the work that's being done now you call into question the compensation model, how teams are set up, billable hours and things like that. If AI is like expediting how quickly work can happen and then you've got GPT5 on top of that, which expedites an already expedited process.

[Jen Wang]

Yep. Yeah, because I mean, historically, agencies, it's been the billable hours model. Okay. We're going to create this campaign and this media plan for you client, you know, Advertiser. We had eight people work on this. They worked 80 hour weeks a pop. We're going to do the math. Here's your bill. Maybe, maybe we throw in a little bit extra, you know, some sum just to protect our profits. But you know, this is the formula for how we're going to charge you now if it's just like. Well, actually we just kind of threw you know some words into chatgpt and it spat out this media plan in a matter of minutes. Client's going to think, okay, cool. So the billable hours are coming down, which means I'm paying you less. Which for the agencies is just like, oh crap. No, we need that money because we have a lot of employees that we have to pay for office space. All down the rest. So yeah, a new compensation model feels.

[Kum McCoy]

I'm in does and maybe a Holdco like WPP can use it because they've been, I think beleaguered is probably the best way to put it nicely.

[Jen Wang]

What do you think the new compensation models would be like? What would make sense if not billable hours?

[Kum McCoy]

I guess outcome based, you know, the deliverables would be your next best bet and how to predict, you know, how to, how to carve out how an agency is paid. You know, like here's the work that I've done, whether that be a flat rate or something like that, probably your, your next best bet in my opinion. What about you?

[Jen Wang]

Yeah, I mean it seems like based on Bergey's reporting, that's where a lot of the early money would be on is outcome based billing of. Okay, well why are you paying us to do this work? It's to drive product sales or foot traffic or increases in brand awareness. So you know what, like just pay us for however much we increase.

[Kum McCoy]

Yeah.

[Jen Wang]

Brand awareness or how much, you know, we increase product sales. Which sounds reasonable and if anything like, well, yeah, why shouldn't that be the model? The trick with it is like how's an agency or how's an advertiser to know if there's an increase in product sales, that's because of the ad. If there's an increase in brand awareness, that's because of the ad. Also from an agency perspective, what if there isn't an increase in product sales because tariffs come in and that affects supply chain issues or just people at the retailers put the product on the wrong shelf or in the wrong aisle.

[Kum McCoy]

Yeah. And then also who's great in the homework here? Right. To be able to determine like, yes, this is how far my product sales have, have lifted. Because if the brand itself is, you know, these are the product sales, who's to say, you know what I mean, if there's a checks and balances system there.

[Jen Wang]

So yeah. Although I mean there are measurement companies who do that kind of thing. Like EDO will measure like lift and search intent. Nielsen has, I don't know if I think it's just called NCS now. But it's like that's the shopper measurement arm. So like these measurements are being taken and can be used. It's just how reliable are they? Like they can be helpful signals. But is that what you want to get paid on?

[Kum McCoy]

Correct. Is that the end all be all of how you know you get paid as an, as an agency?

[Jen Wang]

Yeah, but it feels hard like to go the other way of like, okay, so then if an agency is using GPT5 to do a lot of the work, the agency is then having to pay tokens or pay for the tokens that are expended by GPT5 to figure out like, here's your AI generated media plan. So should an agency just like send that bill to the client and include some sort of markup to help cover its employees? Would that be enough even? It just feels like agency margins are going to get eaten away at. And obviously there's going to be layoffs, which sucks, but just seems par for the course. I guess the hope then would be that agency employees who are laid off maybe can start their own agencies with a leaner business model because of the change in compensation and also the technical infrastructure and capabilities that are on offer these days. And maybe we see a resurgence of independent agencies who maybe are better able to compete with agency holding companies. Kind of the innovators dilemma, which if there's a silver lining to all this, seems like it could be the most silver, the shiniest silver.

[Kum McCoy]

Yeah. That would actually bring us full circle and I think that'd be something not for the hold coast, but it would be hopeful for others, especially if you're looking for more competition, because we're in this age of consolidation and major hold coast kind of snapping up smaller businesses, especially in ad tech, influencer marketing, the creator economy and things like that. So we could find ourselves in a more even landscape. If that is the silver lining that.

[Jen Wang]

Happens here until they start to emerge and one of them calls itself Howdy. And now we're just in the same back in Squirrel one on the adity front and the agency front.

[Kum McCoy]

Yeah, exactly. Exactly. Well, those are this week's juicy scoops. I don't have a good transition to bring us back to Jen, but I.

[Jen Wang]

Don'T know that we need one. It was a really great conversation. I got a lot out of it. It felt very juicy to each other. Absolutely.

[Kum McCoy]

Well, I won't hold a sip any longer. Super excited to have Jen on the pod. This.

[Jen Wang]

Foreign. Hey Jen, welcome to the Digiti podcast. Thanks for joining us.

[Tim Peterson]

Thanks for having me.

[Jen Wang]

Oh, we're excited to have you, Kimika. I feel like you and I, we've been talking about Reddit a pretty good amount in the past year on the show, right?

[Kum McCoy]

Yeah, I would absolutely say that from a perspective of how publishers are leveraging it, how it's shaping up in the search landscape, and a skew of other things. So excited to have Jen on the show.

[Jen Wang]

Yeah, yeah. Jen. At our Digiti publishing summit last September and then again this past March. And I'm expecting this to also be the conversation when we have our publishing summit this coming September. Reddit was one of the platforms that probably got talked about the most because of the referral traffic that Reddit is throwing off to publishers. And obviously we're having this conversation shortly after you all reported second quarter earnings. Earnings. And there was a lot of conversation in that earnings call about Reddit as a search platform. Reddit CEO Steve Huffman said that you all want to be making Reddit the go to place for search. I feel like historically I considered Reddit more of a social platform. At what point did Reddit's priority become more about a search platform?

[Tim Peterson]

Yeah, it's a good question. I say search is one of our priorities and it's one of the ones that's newer. So Reddit turned 20 this summer and the original use case is still communities, it's still coming, and finding a community of interests, sports, skiing, gardening, whatever it is that you love, and finding like minded people who enjoy that and joining that conversation. And that's sort of the front door use case of Reddit that's been around for 20 years. And I think the TAM on that or the addressable market I think is still truly everyone in the world because I think most humans have passions, interests and a need for conversation that's based on real human experience. What happened is that as our corpus has gotten bigger over time, that corpus.

[Jen Wang]

That'S like all the posts that everyone's.

[Tim Peterson]

Putting up with, all the conversations, the votes, the comments, well ranked, well organized, and because we've been open, we're believers of the open web and we've been beneficiaries of that. So all of that information has been accessible in search. What happened probably in the last more like 8 to 10 years is that that corpus of human conversation, intelligence has become increasingly appreciated by search because it's so helpful to people, because it's real, authentic experience. And so what's happened is that we then started getting more traffic from search. And you know, fast forward to the last couple of years over the last let's call it 12 to 18 months, where Reddit became the sixth most searched term, you know, in Google in the US in, you know, last year. And that's people intentionally, you know, asking a query like, what are the best running shoes in a pending Reddit? Because they're just trying to search Reddit. And there are a couple of reasons for that, I think one, the corpus is incredible. I think two, the search experience on Reddit was not meeting their needs yet. And so search became elevated as a priority for us because we believe that we should be the best at searching Reddit. When you come to Reddit, that should be the best place to find and navigate Reddit. Because today when you come in through a third party search, it, it picks a post to match you with the query. But the thing is, what you don't realize is that there's actually 50 to 100 other posts against that query on Reddit in other communities that could probably be very helpful to you. And so we want to reveal that to you. We want search to be a navigation for you to find all the communities and find all the posts and all the perspectives that exist on Reddit, not just the one conversation thread. And that's why search has become much more of a priority for us. Also, look, we're in a moment where people are changing their search behavior. I don't know about you, but I search in a lot of different places with these LLMs, different flavors, different things I'm looking for. And I think that's a window of also opportunity for, for Reddit.

[Kum McCoy]

What do the next steps look like here for you guys? I know last year we introduced Reddit Answers and we struck a couple of deals with the likes of some of these LLMs and machine learning programs. But curious, kind of like, how do we kind of stake our claim in the search space? What does that look like going forward?

[Tim Peterson]

Yeah, thanks for mentoring, mentioning Reddit answers. I think Reddit Answers, think of it as a prototype of what Reddit on site Reddit search looks like, which is, could look like, which is, you know, this idea of using summaries from an LLM to help navigate you to post. So if you see that experience, you know, if you say, you know, what's the best running shoe? It'll give you links to different posts and different conversations around Reddit. And that experience is being integrated into the search bar. Right. Today the search bar is just a navigation to posts and to communities. We want to bring those two things together so that becomes the primary search experience. And we did Say on our call, look, you know, Reddit answers are prototype. It's 6 million weekly actives. The search activity in the search bar across Reddit is 70 million weekly. So I think bringing those experiences together is the first port of call, just having it be cohesive and then the second is taking that experience and threading it throughout Reddit and having search be part of your core community use case of how you navigate and learn more and navigate through Reddit. So that's the second thing you'll see is us weaving that throughout our own product. So I think what we've got excited about is the products that we can build around this trove of conversation that we have. And so that's what you're seeing in search, becoming a bigger part of our roadmap.

[Jen Wang]

Yeah, Reddit answers kind of reminds me of Google's AI mode. But you guys got it out before Google got it out with AI mode, with the unified core search experience, or unifying core search and Reddit answers into a single search experience. When are you expecting to roll that.

[Tim Peterson]

Up sooner rather than later? We are working very hard on that.

[Jen Wang]

Do you think this year.

[Tim Peterson]

We'Re trying? Yes. I mean I think there's a good, there's a good chance, yes.

[Kum McCoy]

Are there any roadmap plans for like how to monetize the search business of this? What does the road ahead look like for that? Has that something we started thinking about yet?

[Tim Peterson]

The way I think about search monetization is it's just about intent. Right. Like it's highly con. It's traditionally been highly contextual to what you're mindset is and what you're looking for. And typically there are different kinds of queries. Some are, you know, upper funnel queries where you're still doing research and some are very lower funnel where you're down into like do I like product A or product B and. And so often that results in more product level shopping type experiences. I don't know what ultimately the ad experience will be. I think it's too early. We want the product to settle and grow and then we will integrate that advertising experience. But what I do know is that what we're building today in our core ads platform, those capabilities will be helpful to that. Right. We launched DPA in Q2. DPA is dynamic product ads. It's effectively the root of shopping ads. That capability will be helpful contextually. All of the work we've done in contextual relevance for our ads, particularly in the conversation placements and the ads and comments that will be a helpful capability in search. So I think it's sort of. I don't know what it'll ultimately look like and it will take time because we want the product to settle, but I think our capabilities are well aligned with where that would go.

[Jen Wang]

Yeah. Because it feels like ads within something like Reddit Answers gets tricky because, like, traditionally search ads have been, I guess, like one of the original digital native ad formats. It made a lot of sense for the ads within search results page to look like the links in there, just hopefully tagged as such that people understand what they're clicking on. But within something like Reddit Answers, where it's just a block of text and oftentimes like, oh, hey, you might want to check out this post and this subreddit, things like that. As I was playing with it, I was trying to think, how do you even put ads in here that don't feel like they stick out, like putting a banner ad inside of a search results page?

[Tim Peterson]

Yeah. I think format will matter and we'll fine tune that experience to what makes sense. I don't know. I mean, I want the experience to breathe and land with users first and then we can figure out the format. But the intelligence behind it, I think, is a capability that we have, and I think that's, you know, almost more important to have. That's the, in some ways the harder part.

[Jen Wang]

Do you think it would be something like advertisers boosting a post that someone had that like mentions their campaign? It seems like there's a lot of hop skips and jumps to that end, but that feels like it could be a native opportunity.

[Tim Peterson]

I don't know. I mean, I think, I think leveraging the contextual relevance is most important. Right. Being in line with the user's intent. If, if, if they're in a lower funnel mindset, they're literally choosing between A and B, product A and B? I think that, I think that makes a lot of sense and to, to get down to a product level kind of creative, you know, for them. So I, I think, I, I don't know, it's too early to speculate. It's just really far out. We're really working on the core consumer experience.

[Kum McCoy]

This is fair. And then also going back, you know, in a lot of my own reporting, when I reported on like platforms and things like that, you would also. You always see Reddit historically as kind of like a tertiary platform kind of gunning its way into like being one of the main align items on a marketing strategy media spend. Right. Do you think Search could kind of be a way to continue that momentum, something for advertisers kind of latch onto, if that makes sense.

[Tim Peterson]

I guess what we're trying to do on Reddit is convert the incredible engagement and intent to great outcomes for businesses.

[Kum McCoy]

Right.

[Tim Peterson]

And search has incredible intent, slightly different intent than people coming in and checking in with their communities every day, which is also high intent in a different way. And that's fine. But I think it's very cohesive with, I think the raw materials that Reddit has that has made it, I think, a successful advertising business to date, which is the idea of incredible intent and engagement that can be converted to outcomes. So I think search is in line with that. And you see our strategy is full funnel. Over the last 18, 24 months, we've really worked hard on developing those hard marketing outcomes that make every impression work harder, especially at the mid and lower funnel. And I think search is in line with that. There are parts of search that search goes up and down the funnel too, but again, it's very, very intent driven, which is, I think, in line with our capability and proposition.

[Jen Wang]

So for publishers, like I mentioned, they've been seeing Reddit really come up the ranks when it comes to a referral traffic platform for them with Reddit Answers. What have you observed in terms of like the extent to which people are going through Reddit Answers and then clicking through to the links they come across? Compared to core search Reddit users.

[Tim Peterson]

I don't have the stats, but they're a little different. The topography is a little bit different just because the, what you're, you know, core navigation versus answers queries, it's just a little bit different mindset. So I'm not sure that I would compare them exactly apples to apples.

[Jen Wang]

That's kind of what I'm curious about.

[Tim Peterson]

Is we want to satisfy both. We want to satisfy both use cases.

[Jen Wang]

Yeah, yeah. Because I guess what I'm curious about is how the behavior is different and then like how indirectly what that would mean for publishers if they're seeing a good amount of traffic coming from Reddit. But as Reddit Answers gains in popularity and usage, just to what extent that Reddit Answers cohort is clicking through versus staying within the platform.

[Tim Peterson]

Well, Reddit Answers we view as a way to navigate through Reddit. Right. It's sending you to the, to post and relevant comments in posts. So it's a way to navigate through Reddit. I think, you know, Reddit started as third party links, but really about the conversation around those links, like our relationship with third party Links was less about referrals and has always been less about referrals and more about the conversation and engagement which then begets interest in either what a writer or a publisher is producing and saying. But we are the meta conversation of things happening on the Internet. So and that conversation happens on Reddit because it's organized and well moderated. And so I'm sure we do send significant referrals, but that's less of what we are trying to do. What we're trying to do is be the meta conversation. And that conversation really happens on Reddit now. So that's a little bit different. And so that's what Reddit answers.

[Jen Wang]

Is that stuff for publishers?

[Tim Peterson]

Well, I mean, look, a lot of the content on Reddit, it's a mix, right? I mean, we started out as a place that really had mainly third party links. But most of what stimulates the conversation on Reddit today is actually individual questions, comments, et cetera. It's mostly UGC begetting other ugc. So it's really changed in terms of what sparks the conversation. But I think both are really valuable and I do think there's an opportunity. We want publishers and creators and people to have a home on Reddit. That is something that is more and more a part of our roadmap is sort of Reddit. At the beginning, every U was an individual human and that was true for a very long time, just an individual anonymous human. And I think we recognize that entities and brands and, you know, leagues and organizations have different structures and slightly different needs, but it can be very additive to our communities because often our communities are talking about them, are, you know, wanting to get customer service advice from them, et cetera. And so we are creating through Reddit Pro the profile capability to have those entities on our platform give them specific tools that I think they want to to engage in the conversation on Reddit and give them their own space that works a little bit differently. So that is something that we're working on, but that's newer for us. A lot of people started with that as a sort of primitive and for us that's been an effort more over the last 18 months.

[Jen Wang]

Yeah, and I could see how that could be beneficial to brands or to publishers or creators who are kind of like trying to grow an audience, grow their profiles. But what does that mean for publishers from like how Reddit can impact their revenues directly or indirectly, or creators? Because one thing Steve Huffman said during the earnings call or in his opening to the earnings call was to stay focused on what matters most, we're shifting resources away from a few areas, such as work on the user economy.

[Tim Peterson]

Yeah, I mean, I think we have a lot of exciting roadmap in the areas that I talked about. Right. So core communities, product search, growing internationally, so i18N and ADS. And then I'll add that one I just mentioned, which is around entities and profiles, et cetera. That's a very robust roadmap right there. And so that's when he says we're shifting to focus. That's sort of the core. It doesn't mean that. I mean the user economy. I think we still believe in. We still believe in the idea that users create value between each other and can exchange value between each other. It just means we're going to build that at a slower rate. But you already see contributions happening and you see this through our developer platform, which has, I think, 1,000 developers on it, creating games and experiences on Reddit. So I think it's a matter of priority and timing. But I do think, you know, we believe that between users there can be a value exchange.

[Kum McCoy]

Curious how we get more for. For all of the roadmaps, excuse me, that we're planning here, how do we continue to get users to the platform? Because, like, one of the things that I've noticed is like, even in my own daily habits, right, if I'm searching something, the start is at Google, and then I will tack Reddit onto the end to get me there. Right. So are there any kind of steps forward to make sure that Reddit is the first step as opposed to the next step?

[Tim Peterson]

Yeah, I think the first step is unifying search and having a place where you can get that experience consistently in the product. I think that's important and that it has to be global, so work in different languages, et cetera. So I think that's also important. And then I think we want people to actually use it. So there's a combination of, frankly, marketing and showing people that that's an opportunity and teaching to use that function once we have it.

[Jen Wang]

What are the marketing plans for promoting search?

[Tim Peterson]

Well, we want to get the product done first.

[Jen Wang]

Sure, that makes sense.

[Tim Peterson]

Well, I mean, I think it's an opportunity, frankly, to say there's something really differentiated here. So it's very different today. Think of the summarization in answers. Think of answers as a capability. Okay. Is kind of how I think about it versus like a standalone product because it'll be integrated, but it's basically a different way to navigate to your answer to the perspectives on Reddit. Right. So what's different about Answers? It gives you different perspectives, might give you pros and cons. It might give you structure, different angles on something. Think about these three attributes of your, you know, running shoe that you're interested in, and it's going to give you anchor text directly to a conversation, verbatim, not summarized verbatim, with full context of, you know, the valuable comment that, that somebody shared is very, very different than, I think any search out there. And I think it does a really good job in being helpful. Specifically on Reddit, we want people to know that. So that is what we will be focused on, educating people about that specific opportunity. I will tell you, you know, it's been. Reddit Answers was a prototype. It's not been marketed. We've gotten. We're very pleased with the feedback we've gotten on, on Reddit Answers as an experience.

[Jen Wang]

Has Reddit secured any super bowl space for next year? Because if the unified search experience gets out by the end of this year or early next year, seems like the timing could work out for you.

[Tim Peterson]

I don't have anything to share on that front.

[Jen Wang]

Fair enough.

[Kum McCoy]

We'll just have to keep our eyes peeled.

[Tim Peterson]

I'm sure you'll be watching the super bowl, the AD super bowl too.

[Kum McCoy]

The last thing. I mean, we can't let this conversation go without talking about AI, because we can't have any conversation with the. Without talking about AI.

[Tim Peterson]

Time to have a drink.

[Kum McCoy]

Yeah, exactly. So where does. In. In these. In these products and in these search developments and things like that as we're moving forward, where does AI kind of fit into this roadmap?

[Tim Peterson]

Well, I mean, AI is for, you know, every company an incredible tool. It makes our products better. Right. You think about Reddit Answers, like that capability, there's AI embedded there. Our ADS platform. Really excited about AI being interwoven into our ADS platform in terms of, I mean, look at what we launched in Q2. A can with this idea of community intelligence, which is the trove of conversation on Reddit. And then on top of that, the Reddit Insights tool, which sits on top of that trove of community intelligence. So that is using an LLM where strategists, planners can really start to ask about, okay, what does Reddit think about my products? What are the segments that are talking about my product? What do they think? What do they think about competitors? You know, that's unleashed, I think a trove of insights. Because, look, Reddit is structured, but it's also kind of messy, the conversation. So an LLM on top of Reddit I think is incredibly valuable for insights and for businesses. So I think we've seen that. The other thing is you look at our community add on product which sits on top of that community intelligence trove, really excited about that. That helps surface conversations about a certain brand. And when there's, you know, enough credible volume and positive sentiment about certain attributes about a product like that can go into an ad and be a companion to the creative of the brand. And that drives a higher response rate, it increases the click through rate. So things like that I think become much more possible with AI on top of this trove of community intelligence, both insights and products that I think help us help businesses be even more successful on Reddit. And then finally, I think what I get really excited about is a lot of applying AI to help our users have a better experience in terms of contribution, helping them have more successful posts, navigate the rules on Reddit in order to post successfully and get a response. That's been a tough process because there are all these rules that are different for every community. But with our tool of post guidance, you can use AI to help somebody be successful in navigating that. So I think it really is such a helpful tool in making our products better.

[Jen Wang]

What's the large language model you all are using to power answers?

[Tim Peterson]

We use a combination of all different models.

[Jen Wang]

Any plans to develop your own LLM?

[Tim Peterson]

If you think about post guidance, that's a very specific LLM and we created that capability ourselves. Yes.

[Jen Wang]

Okay. Yeah, because it seems like Reddit, as Kimiko was saying, is really rising into this position of being one of the most major platforms out there. And it seems like looking at Google, looking at Meta, looking at Amazon, they all have LLMs. It seems like part of the playbook would be for Reddit to have its own LLM too, I would think.

[Tim Peterson]

I think we want to be the best at searching Reddit and we want to be the best at delivering fresh, helpful information, human conversation. There's no question that the capability of AI and LLMs makes that experience better. And I think that drives every decision about what we build.

[Jen Wang]

And you're building a lot. You all are very busy these days, so we won't keep you anymore. But Jen, thanks so much for coming on. Really enjoyed this conversation.

[Tim Peterson]

Thanks for having me.

[Kum McCoy]

Well, that brings us to the end of this episode of the Digiday podcast. Thank you to everyone for listening and please don't forget to share this episode with someone who you think would enjoy it. You can even rate us and leave us a comment on Apple podcasts. We'll be back next week with another episode of the Digiday Podcast. Thank you so much for joining us.