Reddit makes a bold move that users may not like
The forum social media platform is making a change ahead of its upcoming IPO debut.
Reddit, a forum social media platform, is switching up its advertising by making it even harder for users to tell the difference between a user post and an ad ahead of its plan to go public as a company.
Reddit recently announced that it will start to implement a new form of native advertising on its platform called “free-form ads” where advertisers will have access to new templates that will allow them to craft posts that will blend in more with regular user posts that are embedded in users’ feeds.
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“Free-form ads are our latest ad format that empower advertisers to easily engage on the platform in the same way as our users,” said Reddit in a March 14 press release. “Its ‘free form’ layout allows advertisers to share in-depth information with Reddit by combining multiple media types, including image, video and text using ready-made templates. As our most native ad format yet, free-form ads are designed to look and feel similar to the type of content redditors share with each other, inviting maximum engagement from the community.”
The posts will be labeled as promoted and are expected to boost community engagement as users will have the ability to comment on them. During Reddit’s testing on how the ads perform, the company claims in the press release that “free-form ads outperform all other ad types in average click through rate (CTR) by 28%.”
Some Reddit users aren’t too happy about the platform’s latest form of native advertising and are claiming that they will ditch the app as a result.
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The move from Reddit comes amid news that the company is looking to go public this week, which might be part of the company's latest effort to appeal to shareholders.
Reddit's initial public offering is reportedly between four and five times oversubscribed, according to a new report from Reuters. An IPO that is oversubscribed means that demand is higher than the availability of stock shares. It shows that investors are interested in purchasing shares of the company which could result in a higher price per share or increased amount in shares that will be put for sale.
Reuters also notes in the report that the company is looking to be valued at $6.5 billion and is targeting a price range of $31 to $34 per share. The company is reportedly hoping to raise around $748 million from its IPO.
Reddit is expected to make its IPO debut at the New York Stock Exchange on March 21 with RDDT as its ticker.
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