Today marks a significant milestone as Reddit goes public with an initial share price of $34, the first major social media offering since 2019. As its CEO aptly describes, advertising has been Reddit’s primary business focus thus far.

In a February 2024 SEC filing, Reddit unveiled plans for substantial changes to its revenue generation strategy. While the current ad-based model is standard across many online platforms, Reddit faces unique hurdles within its ecosystem. The platform’s culture of pseudonymity poses challenges in linking accounts to real-world identities, raising tough questions about effective monetization without a clear understanding of users’ interests and spending habits.

Reddit has been exploring innovative ways to increase user engagement. One method it uses is rewarding users for their popular posts that resonate well within the community. This virtual pat on the back encourages content creators to continue their momentum. Additionally, Reddit is exploring the option of licensing access to its vast data reserves, which presents exciting opportunities for revenue diversification and platform expansion.

But Reddit’s journey doesn’t stop there. Users are buzzing with intriguing ideas, such as crafting a revenue model inspired by the immersive mechanics of mobile games. By tapping directly into users’ spending behaviors, this approach could be the game-changer Reddit seeks.

Amidst the excitement, questions about fair compensation for volunteers raise concerns about the platform’s long-term sustainability. The community has been Reddit’s lifeblood, from content creation to moderation. As Reddit navigates the road to monetization, it’s not just about boosting profits—it’s about striking a delicate balance between community values and innovation. As we forge ahead, one thing remains clear: the Reddit community stands as the bedrock of the platform.

What are your thoughts on Reddit’s evolving monetization strategies? 

Some numbers to consider:

According to its S-1 filing, Reddit boasts over 100,000 active communities (subreddits), with an average of over 60,000 daily active moderators as of December 2023. The platform welcomed 500 million visitors in December 2023, with an average of 73.1 million daily active Uniques in the last quarter of 2023. (Uniques are unique viewers or visits to a subreddit).