Reddit begins testing advertising placements in search results
Reddit has started testing advertisements in its search-results pages with a select group of eligible advertisers. The test follows the company’s disclosure that Google search referrals have declined as AI-powered search products answer more queries directly on results pages. Reddit reported 130.3 million global daily active users in the third quarter, while US daily active users fell from 53.2 million in the second quarter to 50.7 million.
The company said ads in search may appear based on several factors, including their contextual relevance to a user’s query. Its examples include advertisements for espresso machines, coffee or mugs when someone searches for an “espresso station”, and ads for monitors, desks or office chairs for a “home office setup” query.
A new ad surface for high-intent queries
Search is a potentially useful advertising surface because users are actively looking for products, recommendations and information. Reddit said the initial test is intended to help it understand how people respond to search ads and refine the experience for both users and advertisers over time.
The initiative arrives after Reddit exceeded Wall Street expectations for revenue and earnings per share in its third-quarter results, but issued fourth-quarter sales guidance of $1 billion to $1.03 billion. That range was below the $1.05 billion expected by analysts. The company linked the weaker outlook to lower search traffic referrals as Google expands its AI-led search experience.
The pressure described in Reddit's AI search traffic concerns remains relevant as AI answers can reduce the number of clicks sent from search results to publishers and platforms.
Logged-in access could increase ad value
Reddit has also announced a gradual move to a logged-in experience, beginning in markets outside the United States. The company said limiting content to logged-in users is intended both to protect the site from unauthorised AI scraping and to create more value for advertisers.
Logged-in audiences can provide advertisers with additional signals about interests and behaviour, which can enable more targeted advertising. Reddit’s new search placements could therefore become more valuable as that transition progresses.
What businesses should take from the test
For advertisers, the experiment is a signal that Reddit is building inventory around explicit user intent rather than relying only on feed-based placements. For publishers and platforms, it illustrates the commercial pressure created when AI search reduces referral traffic: businesses may need to find ways to generate more revenue from the users they already reach.