Reddit’s ad revenue hits $1.8 billion in 2025

New Delhi: Reddit is forecast to generate $1.8 billion in global advertising revenue this year, representing a 49.6% year-on-year growth, according to WARC Media’s latest Platform Insights report. The figure is expected to rise further to $2.5 billion in 2026 (+39.0%), as the platform continues to expand its ad business following its public market debut in 2024.

While Reddit’s share of the overall social media ad market remains limited, its $1.2 billion revenue in 2024 accounted for just 0.4% of total social spend, its rapid growth has drawn attention from advertisers. According to the report, Reddit’s ad business is currently growing three times faster than the wider social media category.

“Reddit’s ad business is currently relatively small, but its impressive ad spend growth, its increasing reach, which now surpasses X, and its investment in AI is catching the attention of a wider pool of advertisers,” said Celeste Huang, Media Insights Analyst at WARC Media and author of the report.

AI has played a significant role in Reddit’s expansion. The platform has incorporated AI across moderation, content translation, and search functions, while also securing AI licensing deals. Its AI-powered search feature, Reddit Answers, reportedly saw one million weekly users in Q1 2025.

According to the report, 60% of Reddit’s ad revenue comes from mid- and lower-funnel activity, with upper-funnel brand advertising seeing the fastest growth in three years. This performance has helped Reddit navigate challenges commonly faced by smaller social platforms.

Reddit reported 108.1 million daily active unique users in Q1 2025, a 31% increase year-on-year. The platform’s overall ad reach stands at 606 million globally, according to Datareportal estimates, placing it ahead of X (586 million) and closing in on Snapchat (709 million). Analysts note that part of this growth may be due to revised reporting methodologies, though Reddit continues to demonstrate strong user momentum.

The platform’s user base is predominantly male (59.8%), with 41% aged 18–34 and 34% over the age of 45, according to demographic data from the US. Usage is particularly strong in the US, UK, Canada, Germany and Australia.

“Reddit was one of Google’s top 20 search terms in 2024, and sixth in the last 90 days,” said CEO Steven Huffman. “Users are often found to arrive via Google with a question in the hope of discovering an answer on Reddit.”

The platform continues to position itself as a “source for knowledge”, while increasingly exploring its role as an AI search alternative.

Reddit data shows that 25% of its posts are related to product recommendations. Of those, 43% involve users seeking new options or alternatives. Around 76% of users believe Reddit posts are more “honest and truthful” than those on other platforms, while 42% cite trusted community dialogue as a key driver of product research.

However, nearly one in four recommendation posts results in users reconsidering their brand preference, pointing to the platform’s dynamic and feedback-oriented environment.

Evidence suggests that active, organic participation by brands can yield measurable benefits. One organic brand post per week reportedly increases positive mentions by 3.5%, while three meaningful comments under user posts can increase such mentions by 2.2%.

“Reddit advertisers benefit from highly organic and trusting engagement,” the report states, with features such as Ask Me Anything (AMA) ads and Reddit Pro Trends offering brands opportunities to engage more deeply with community-driven content.

Reddit’s investment in AI is also improving campaign performance. Brands using Dynamic Product Ads and conversion campaigns reportedly achieved twice the return on ad spend (ROAS) in Q1 2025. A recent marketing mix modelling (MMM) meta-analysis found Reddit to be among the top two paid social platforms in terms of efficiency, with 11% of its impact attributed to boosting performance in other media channels.

“Reddit has demonstrated that evidence-based, trust-led engagement can translate into measurable results,” said Alex Brownsell, Head of Content, WARC Media. “This latest Platform Insights report provides evidence-based insights on the challenges and opportunities Reddit has to offer advertisers, and explores its latest trends across investment, consumption and performance.”