Reddit Tests Search Result Ads to Offset Google Traffic Loss
Reddit is testing ad placements in search results to diversify revenue after Google AI updates reduced referral traffic to the platform.
Reddit Inc. is testing the placement of advertisements within its in-app search results to expand its advertising inventory and better align with user discovery behaviors. The trial allows a select group of eligible advertisers to target users based on contextual relevance to their search queries, such as displaying coffee machine ads to users searching for espresso stations.
The initiative follows third-quarter 2026 financial results showing that while advertising revenue grew 54% year-on-year to $847 million, the company is facing significant headwinds. CEO Steve Huffman reported that search traffic dropped by more than 1 million referrals per week on average in October, a decline attributed to Google's AI-powered search experience and AI Overviews. Additionally, U.S. daily active users fell to 50.7 million.
To counter these trends, Reddit is leveraging search results pages that exhibit high purchase intent to maintain its value as a product discovery tool. The company is also planning a gradual transition to a logged-in experience, starting in markets outside the United States, to prevent unauthorized AI scraping and provide more accurate targeting signals for advertisers.
