I'm a long time Reddit advertiser. I've also written the top ranked post on Google for "Reddit Ads." Reddit liked the post so much that they feature on a case study on their site.
I used to be able to drive $10 CPAs from Reddit ads.
It was a simple process. You pick a subreddit that fits well w/ your product and run an ad in that subreddit. It would only appear in that subreddit.
For example, I run a jerky club, so I would advertise in the r/jerky subreddit and people would see my ad in r/jerky and sign up for a subscription. My ad would only appear in the r/jerky subreddit.
It was perfect contextual advertising. Redditors see relevant ads, Reddit gets ad revenue, and the advertiser gets ROI.
Now, Reddit has changed their system secretly so they can boost their ad revenue and reduce advertiser ROI. CPAs now cost me $100+ on their platform.
Here's what they've done.
Now when I tell Reddit that I want to run an ad in r/jerky, instead of ONLY running the ad in the r/jerky subreddit, they run the ad to any user who's ever visited r/jerky or subscribed to it. Of note, they don't tell the advertiser about this change anywhere on their new platform.
So now my jerky club ad can appear on the front page for ANY Reddit user who's ever visited r/ jerky or subscribed to the subreddit. The ad can appear any place on Reddit totally out of context.
This drastically reduces the ROI for the advertiser and it gives Reddit the ability to sell many more impressions.
Total deception on the part of Reddit.
Disappointed.
Maybe someone from Reddit can chime in on this because it's very frustrating.
To clarify what happened here, around the time we released our new ads platform - 6 months ago - we made some changes to targeting. Specifically, we modified subreddit targeting so that recent visitors to a subreddit or a post from a subreddit could also qualify to see ads targeted to that subreddit. We did not make any changes to how users who subscribe to a subreddit see ads (subreddit subscribers have been eligible to see ads targeted to a subreddit as long as they are visiting safe for work content since this commit ~2 years ago: https://github.com/reddit/reddit/commit/f6a37b64c17579b82e22...)
The release of our new ads platform also coincided with a re-release of our help center docs, which detail how subreddit targeting works. You can see the specific page here: https://www.reddithelp.com/en/categories/advertising/targeti...
As noted there: "Targeting a subreddit means you are targeting the subscribers and recent visitors of that subreddit. Subscribers can see your ad while visiting the targeted subreddit and on other subreddits if they recently visited that targeted subreddit."
We made this change in response to advertiser feedback that they would like to see an increase in targeted inventory, the idea being that if you're interested in jerky when you're on /r/jerky you're also interested in jerky when you're not on /r/jerky. This change has helped a good number of our advertisers successfully expand budgets while still meeting their return on ad spend goals, specifically for advertisers that target smaller subreddits regularly. We of course also limit the subreddits your ads can show on outside of the targeted subreddit to ones that are similarly "brand safe" to the ones you are targeting. (e.g. if you are explicitly targeting only NSFW subs your ad will show up on other NSFW subs, but if you're not targeting NSFW subs your ad will never show up on a NSFW sub)
While we haven't done any sort of official analysis of CPM changes here, the expected effect of this change was that advertisers would be able to spend significantly more budget (a specific request of many of our advertisers). An expected side effect is that CPMs might possibly increase due to more bids on a per-impression basis, but since you're bidding on a wider range of inventory I would expect that you would be able to reduce your CPMs and still spend the same budget you were spending before, with similar performance.
If there's something I can do to help please don't hesitate to email me directly (jamie@reddit.com). In the future for ads problems we also hang out on https://www.reddit.com/r/redditads