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joshklein 957 days ago | link | parent

The question for reddit isn't whether or not people enjoy it and want to spend time on it, but whether or not the owners can make money selling those people's attention. The traffic to reddit - while admirably large - is relatively unattractive to most advertisers.

"Reach" (impressions/eyeballs) are only important insofar as you're talking to someone who might buy what you're selling (see "relevancy"). The sub-reddit system could theoretically segment the audience in interesting ways, but other than r/gaming, there aren't many natural industry fits amongst popular sub-reddits.

Anecdotally, the audience would also seem to be advertisement-averse. An advertiser should be willing to pay network prices for the audience (i.e. pennies CPM), which makes it a nice living for a small group of folks living off their passion, but pretty useless to a Condé Nast trying to run a media empire.

I think the business model in a reddit-like site could be selling curated content in other media, e.g. a meme-series of coffee table books. Think Harry Potter, not Oprah.

If you're in the content game, your business's value is in having the attention of a group of people. Your first attempt to monetize that asset needn't be to sell your audience's attention to someone else, in this case undermining your ability to keep their attention. Instead, you should focus on bringing things your audience wants - and would pay for - to them. Sometimes that means you need to make the things they want to buy instead of shilling them for someone else, because no one sells what your people want.

Condé Nast isn't built to do this.



kn0thing 957 days ago | link

Nailed it, joshklein. In fact, publishing xkcd and SMBC (along with the other breadpig products) has taught me a few things about that world. I'm hoping reddit makes good use of them.

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joshklein 957 days ago | link

The founder of reddit throwing a "nailed it" at me is kind of a swoon-worthy moment. Thanks.

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Zakuzaa 956 days ago | link

>>The founder

A co-founder.

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philwelch 957 days ago | link

Even something like coffee table books would be a nightmare to get all the rights lined up. Having users post content on an open website allows you to shrug off a lot of these problems compared to actually publishing it yourself. A lot of the content on Reddit consists in writing from people using throwaway accounts they'll never check again (i.e. /r/IAmA, /r/AskReddit, etc.) or in "borrowing" images from pop culture or random strangers where it may be impossible to ever track down or secure the rights for (i.e. /r/vertical and /r/adviceanimals).

And there's nothing stopping someone other than Reddit from monetizing all that content the same way. If I wanted to, I could send private messages to hundreds of Redditors and get permission to include their comments in a self-help book gleaned from AskReddit comments, and Reddit would have absolutely no advantage over me in doing this, nor any way to stop me. As far as any content on Reddit goes, the story is the same way. Just as Hacker Weekly operates independent of YC and the people who run HN.

I think if you want to monetize Reddit, monetizing the audience isn't the only way. There's no reason Reddit can't, aside from having subreddits, sell paid hosting for completely separate, possibly private reddits that don't connect to Reddit itself.

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zck 956 days ago | link

The rights are already lined up. From Reddit's TOS (http://www.reddit.com/help/useragreement):

>...you agree that by posting messages...you grant us a royalty-free, perpetual, non-exclusive, unrestricted, worldwide license to use, reproduce, modify, adapt, translate, enhance, transmit, distribute, publicly perform, display, or sublicense any such communication in any medium (now in existence or hereinafter developed) and for any purpose, including commercial purposes, and to authorize others to do so.

In fact, reddit has already used user content to create products. They've done shirts (http://store.xkcd.com/reddit/#Jawsbackwardstshirt) and posters (http://store.xkcd.com/reddit/#Cuiltheoryposter) based off of comments or submissions.

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philwelch 956 days ago | link

OK, that straightens out most cases, unless you're posting something that doesn't belong to you anyway. AMA compilations are in, but meme picture coffee table books are out.

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whatusername 957 days ago | link

Wasn't that their original business model. I don't think it went very far (although it got them to a ramen level profitability).

They also have things like /r/dragonage taht was setup by EA (possibly with a fee?) to promote the game

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kn0thing 956 days ago | link

Indeed. Merch definitely hasn't reached its full potential. And that /r/dragonage sponsorship was indeed paid; I wish more advertisers saw the value of a branded subreddit. That's something for us to do a better job explaining.

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jbenz 956 days ago | link

I'm very late in responding here, but maybe someone will still see this... Instead of a branded subreddit, do you know what I (as an advertiser) really, really want? A branded novelty account. I want to have a novelty account where I can post comments that are relevant and engaging with an occasional link back to my site, and I'd like for the users of reddit to somehow know that I am a sponsored account (perhaps through a "sponsored account icon" next to my username). My comments would be subject to downvotes and upvotes just like any other comment.

If you, or someone else at Reddit, would like to discuss more, my contact info is in my profile. Cheers.

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shoham 956 days ago | link

Hi,

As a small business advertiser on Reddit, I feel as if this would be a good idea, especially for big businesses; however as I wrote before (http://news.ycombinator.com/threads?id=shoham), there are a couple of little things that I think you guys could be doing to be more business friendly with self serve ads for small businesses like my own: http://www.feed-forward.net

The three main ideas are: (1) lower the cost per day for ads (for a small business, with less than 100K a year in revenue, Reddit ads don't scale well). Facebook, and Google have a $1/day minimum. (2) Let the OPss of self serve ads moderate their post. It defeats the purpose of spending money on an ad, and having such an awesome idea such as the SSA program if the comments section is hounded by trolls, and moderated by no one. I've been told by admins that Reddit has a long history of free speech adherence, which is great, but posts are removed from subreddits all the time for not complying with the subreddits' rules, at the mods discretion. My proposition is that you guys extend this courtesy to buyers of SSAs.

Third, allow advertisers who have been advertising for a while to focus their impressions on people who have already clicked on their ads. Again, this is a small business-friendly idea -- I've focused most of my ad buys on r/music , a huge subreddit of 150K people. If after a month or two I could focus my buys on those users I've already engaged with in that r/, that would help bolster two objectives: keep the ad conversational, and help advertisers create a community around their submission/business. Once a few thousand people have seen my ad every day for two or three months, I can maybe even invite them to a sponsored r/...

-Shoham

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weinzierl 957 days ago | link

"The sub-reddit system could theoretically segment the audience in interesting ways, but other than r/gaming, there aren't many natural industry fits amongst popular sub-reddits." In my opinion this is only true for a few (admittedly most popular) subreddits like r/funny and r/wtf and everything nsfw . Nearly every subreddit that I read has an industry that fits, r/photography -> photo gear, r/parenting -> baby stuff, r/science -> journals and books, r/somethingimade -> etsy, etc. I'm also sure that reddit knows a lot more about my interests than google and facebook together. But maybe that's just me...

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joshklein 957 days ago | link

You're not wrong by any means, but it's also a question of scale and purchasing power. There's no doubt that r/parenting is filled with people worth talking to about, say, baby products. But then look at the advertising sales minisite for Babycenter.com[1]; a company like Johnson & Johnson isn't going to bother with r/parenting. Smaller companies might be interested, but small companies don't spend much money on ads. When they do, they mostly spend it on Adwords.

Of course the joke here is that J&J bought Babycenter. If I were a category-specific CPG company, I'd cut out the publisher middleman, too.

Ad networks & exchanges lead us to think there's a perfectly efficient & liquid market for ad space, but there's a real scaling problem for big advertisers that leads them to stick with big publishers. Quality control on r/parenting would be a concern.

[1] http://www.babycentersolutions.com/

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BrandonM 957 days ago | link

> a company like Johnson & Johnson isn't going to bother with r/parenting

This is false. My girlfriend works in social media at a Fortune 100 company. Just a few of their many products are geared toward babies and other things of interest to parents. She attends "mommy blogger" conferences, reaches out to people on Twitter and Facebook, and otherwise works with people who have a substantial audience in order to advertise with them.

Big companies are much more likely than small companies to even have such a role. They are very interested in promoting themselves and increasing their profits in any way possible. There's absolutely no reason they wouldn't be interested in something like r/parenting

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jonknee 956 days ago | link

> This is false. My girlfriend works in social media at a Fortune 100 company. Just a few of their many products are geared toward babies and other things of interest to parents. She attends "mommy blogger" conferences, reaches out to people on Twitter and Facebook, and otherwise works with people who have a substantial audience in order to advertise with them.

By bother he meant spend a bunch of cash, not @reply to people on Twitter. They can hire your girlfriend to submit stuff and comment on reddit all day, but that doesn't give reddit any revenue.

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BrandonM 956 days ago | link

You apparently missed the part where I said, "and otherwise works with people who have a substantial audience in order to advertise with them."

My girlfriend doesn't work the spammer role that you seem to be envisioning. Her job is to discover an audience that is actually interested in the products her company offers and to reach out to them. Part of that job is to manage the Facebook presence for products that have well over 100,000 followers. Another part, as I said, is to find relevant blogs and other websites frequented by visitors of an appropriate demographic as a platform for their ad campaigns.

I brought real information to this thread. There was no reason whatsoever for you to shit on that.

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rat 956 days ago | link

Paying someone to reply to people on twitter cost 20000 + benefits per person. Not to mention conference tickets, transportation to conferences. Maybe some facebook ads?

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jonknee 956 days ago | link

It could be cheaper, but I'd never see a Facebook ad or Promoted Tweet. Sometimes the warm body making personal contact is what it takes.

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eli 957 days ago | link

Gaming isn't even an especially lucrative market in terms of ads.

Now, if they had a /r/PharmaExecutives...

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rmc 957 days ago | link

Exactly, Some more examples: r/motorcycles r/programming r/$PROGRAMMING_LANGUAGE r/linux etc.

The NSFW ones are tricky. On one hand there's a lot of money in porn. But most of the content there is either stuff from porn companies (that would be paying for ads), or amateur stuff, and would an amateur audience like porn company ads?

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runinit 956 days ago | link

Deals on fleshlights for all!

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minikomi 956 days ago | link

1/2 price off kleenex when you mention reddit!

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shoham 956 days ago | link

Buyer of Reddit self-serve ads here, and I think that their approach is interesting, even exciting, and in the long-term potentially very profitable. Some of the issues come down to the ad averse culture (as you pointed out), not just of the community at large but even of the staff on the back-end.

There are great little ideas that are not being managed effectively in my opinion. For instance, it costs more to target a particular subreddit than the whole website, which is not particularly good for the kinds of small businesses that could really benefit from the service (there's also a daily minimum -- $20/day for site-wide, and $30/day for subreddit buys -- compared to Google, and Facebook's $1/day minimum).

Secondly, the true genius of the Reddit ad system is that your ad looks a lot like a regular submission. Think about the power of Adwords -- your ad looks just like the content your potential buyers came to consume anyway.

Thirdly, and here is the double-edged sword -- in the comments, a conversation (actually, a long-term, multiparty conversation) can build around your company. The power of this is truly great; however the implementation has been spotty. Every post on Reddit is submitted via a community with rules, and moderators. The one exception to this is self serve ads. What you end up with is a lot of spam and trolling in your self-serve ad, which defeats the whole purpose of having the comments in the first place.

Unfortunately, in my experience, the admins aren't sure what to say and fallback on free speech adherence, etc. although many posts and comments are taken down in various subreddits due to a lack of observance on the part of the commentor or OP to that sub's rules.

TL;DR: Reddit's self-serve ad system is a billion dollar idea in the making, but only if the culture of the community and more importantly the admins allow it to be so.

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fabiandesimone 957 days ago | link

Some time ago, the Reddit community expressed their interest to have an @reddit email account (they were willing to pay for POP access, etc.). I tried to contact the Reddit admins by Reddit messages, email, Facebook, etc, because we can provide them with @reddit mail accounts in no time and scalability is not an issue (we have installations in some of the biggest ISPs in the world) and it would cost them nothing as we were wanting to do a rev-share deal. Sadly I never heard back.

There's an opportunity to monetize Reddit users, even if they seem somewhat far from the core product.

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trafficlight 957 days ago | link

It's not really that far from their core product. To me, Reddit is this big clubhouse where you get all of the references and in-jokes. Having a Reddit email address is just one more thing that shows you belong.

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bane 957 days ago | link

In my experience, I've gotten really poor responses from the Reddit admins almost every time. When I say poor I mean 'none'.

I don't think it's a function of them being bad or lazy, but being such a small team for such an enormous site. I can't imagine being the sole community manager for such a monster. You have to triage between "will answer tersely" and "will ignore". And unless it's a lawsuit or a fire about to burn down the server room, almost everybody seems to end up in "will ignore".

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fabiandesimone 957 days ago | link

I know what you mean. It must be pretty hard.

I tried many times with no luck. Shame really, because @reddit.com could be deployed like really really fast.

I guess I'll give it another go perhaps. Maybe use a promoted ad to get their attention (and support Reddit in the process :) )

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StavrosK 957 days ago | link

For the best results, reply to an administrator in a comment thread. I think that has the best response rate.

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idonthack 956 days ago | link

/r/ideasfortheadmins is the place you should post.

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rmc 957 days ago | link

How much have people said they'd pay? I doubt it'll be that much. How can you do it for free? The email market seems to free now, can you really make money by selling email?

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oditogre 957 days ago | link

People pay for Reddit Gold. I don't see why they wouldn't pay for an @reddit.com email address, too.

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bostonvaulter2 957 days ago | link

Or perhaps the email address could come with Reddit Gold

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fabiandesimone 957 days ago | link

We had that in mind :)

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lwat 957 days ago | link

Shutupandtakemymoney!

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fabiandesimone 957 days ago | link

I can't seem to find the original Reddit discussion. It does not have to be much. Is a numbers game and Reddit has a lot of users.

I remember our initial calculations were interesting to everyone involved.

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smokinn 957 days ago | link

Cheezburger Network seems to be scooping up the business model you're mentioning, bringing the 4chan and reddit memes that are likely to have a broad audience into the mainstream and monetizing them.

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PostOnce 956 days ago | link

/r/forhire could compete with craigslist if it was managed right, I think.

they could do a /r/forRent, etc. also. Reddit has a lot of opportunities. Let's hope the CEO can figure out how to captialize on some of them.

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bane 957 days ago | link

r/gaming, there aren't many natural industry fits

I wonder if then that speaks to interesting business opportunities? There appears then to be a misalignment between traditional industries and what people are actually interested in.

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philwelch 957 days ago | link

Well, r/trees suggests an interesting business opportunity, but that's illegal. Lots of other subreddits (/r/mensrights, /r/politics, /r/worldnews, /r/atheism) are hotbeds of demagoguery and outrage, which may be good for political fundraising but little else. (It's possible to sell demagoguery and outrage--Rupert Murdoch and Arianna Huffington have taught us that much--but I don't know about selling it people who are already getting it for free.) And then of course, pictures of cats and formulaic jokes are another thing.

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