Reddit is a transparent, quirky social news aggregator acquired by giant publisher Condé Nast four years ago. It often does things differently, as I was reminded by Jeremy Edberg, a Year One Labs advisor who joined us at Bitnorth recently and runs operations for the site.
Despite Reddit’s strong growth (on the backs of only six employees) it’s still perceived by many as an also-ran compared to more widely-known competitor Digg. This blog entry talks about Reddit’s inability to gain respectability within the mainstream media, even though its traffic and community engagement are enviable. The blog is written with the trademark transparency and bluntness for which Reddit’s team is known.
Reddit doesn’t play by the rules, and sometimes that gives it an advantage. When Condé wouldn’t buy them an extra server, it launched a “Reddit Gold” program that made Conde look cheap; more recently, Condé didn’t want to take ad money in support of Prop 19 (the pro-marijuana bill in California) so Reddit ran the ads for free, earning the admiration of many of its users.
Reddit relies mainly on ads for revenue. These days, there’s an arms race between sites dependent on advertising, and users who run browser-based ad-blocking software that hides those ads. Because many of Reddit’s users are technical, the company loses a significant amount of potential revenue to ad-blocked browsers. So how does Reddit tackle this potential loss of revenue?
The answer shows how Reddit’s deep understanding of its user base and open channel of communication with its community work it its favor. In the last paragraphs of the “don’t get no respect” blog, Reddit explains:
“Oh, one more thing: Since we don’t want redditors to think of the ad box as “The Box of Hate Which I Never, Ever Look At”, we’ve been occasionally sticking little games in there, and as of today, pictures of cute little animals. If you’re running AdBlock and sad about all the fun you’re missing, here’s how to make an exception for reddit.”
Reddit is fighting the Ad-block arms race with cute animals and free games. Candor, transparency, and excellent intimacy with your target audience can turn into revenues. And a thriving underdog with little to lose can stay one step ahead of a lumbering parent caught up in last century’s business models.
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