I do not remember the specific metrics, but there was a big focus on the fact that their CPC/CPM/etc was lower than alternative social media, meaning advertisers put less value on clicks/views from Reddit than other platforms. And they believed this was because their ads were not targeted enough since there was (is?) no fancy ML models behind it, advertisers could just chose some basic rules for what subreddits they want to target.
To solve this they were building out a huge ad relevancy team to target ads at users using posting history, similar to Meta/LinkedIn/etc.
I've been in marketing and media for almost 20 years, been a Reddit user for almost that long, and have run teams owning both buy and sell side, including at a publisher platform.
My $.02 CPM is that yes, Reddit can improve their rates by improving relevancy. But they don't capture anywhere near the volume or quality of signals to inform relevancy models as compared to others in the space.
From their privacy policy it looks like they may engage with vendors who enrich data that can be tied back to a hashed identifier. This seems in sync with the increased pushes to create accounts with emails (one of the main identifiers the industry relies on) as well as use the app (to get a MAID, though those are increasingly worthless for identity resolution vendors from a match rate standpoint).
Reddit is in a tough spot because a huge chunk of their users want to use them anonymously, or with minimum PI provided. This leaves Reddit in a position of needing to either push harder to get it (like if they added profile fields to collect more PI), or infer it from modeling based on the subs you visit, content you read or post, interactions with other users, etc. Which puts them in the crosshairs of privacy bodies depending on how far they go.
This is all my own personal opinions and conjecture.
It speaks to their incompetence really, because when I look at the list of subs I have subscribed to and interacted with, my Reddit history is very, very closely aligned with my interests, much more so than any of my other social media profiles. If they can't mine that data effectively then they don't deserve to make money.
The problem mentioned by parent comment is that it basically ends there: they struggle to cross-reference your Reddit persona (faithful ad it may be) with the bucketloads of signals advertisers get from other sites.
If you talk about buying a car on some random app, chances are that you'll then see ads on Facebook about used cars. Facebook gets to know what you do elsewhere, and offers advertisers extremely precise (and hence more valuable) targeting. That's what Reddit can't do.
They need a pixel/SDK to make that work. That should have been step 1 in relevancy. Seems like they could also gave used their sharing buttons but whoever is running their ads strategy may not be focused on the right things (i.e. Dr advertisers from adult and gaming to start with).
This jibes with my experience. I was looking to come in on a web platform team there but they tried to shift me over to an ad focused team. I said “no dice” and parted ways.
Ironically I now work for an email marketing platform company, but it’s great work and we just provide the tools to annoy people. It’s our customers that actually do it (I know, I know).
Back in 2018, I had incredible results running Reddit ads. A CTR of 1.7%, a cost per click as low as 22 cents, and my landing page was converting at 18%.
Even back then, 100% of traffic Reddit ads was coming through Mobile, which explains why they really want (need) users on their mobile app. Desktop users just don't click ads, and mobile users using other clients don't see Reddit ads.
The tools available to me back then to run Reddit ads were a joke compared to other platforms, but with user acquisition was costing me around a dollar per user, I didn't really care!
To solve this they were building out a huge ad relevancy team to target ads at users using posting history, similar to Meta/LinkedIn/etc.