Reddit is testing ads in its search results to generate more revenue from its existing users. The ads are matched to search queries and are initially available to a select group of advertisers. For example, a search for “espresso station” might surface ads for coffee machines.
The test comes as Reddit faces a sharp decline in referrals from Google. CEO Steve Huffman attributes the drop to Google’s AI Overviews and AI Mode, which provide answers directly in search results. Reddit reported losing, on average, more than one million search referrals per week in October.
The referral losses have raised concerns about user growth. Reddit’s stock price fell more than 20% despite strong Q3 ad revenue. The search ads could help the company reduce its reliance on Google and better monetize its high-intent audience.