Last week, Reddit, one of the oldest social media platforms, went public after three years of preparation. It marks the first social media platform to do so since 2019, coinciding with anticipation surrounding a potential U.S. TikTok ban, which could significantly disrupt the social media landscape.
Despite Reddit’s IPO valuation being $4 billion lower than its 2021 private market value, the company believes there’s opportunity for growth in new markets, and the IPO could serve as a catalyst for that expansion and efforts to improve monetization. Here’s where the company stands from the consumer’s perspective:
1. Reddit Usage Is on the Upswing
Despite a recent crisis for the platform when millions of users went offline to protest Reddit’s policy changes, usage data paints a positive picture of Reddit’s prospects for growth with an 11% increase YoY from 2022. New CivicScience data show usage has also jumped up across all age groups since 2022, with the highest jump coming among adults aged 35-54, climbing by 19 point percentage points, followed by adults 25-34 (an increase of nine points).
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2. Why Are Americans Turning to Reddit?
Reddit holds more than 100K active subreddit communities. Among Reddit users, the most popular motivation for utilizing Reddit is for entertainment (40%), followed closely by ‘hobby/interest communities’ (38%), with ‘seek advice’ (32%) rounding out the top three most commonly cited reasons for turning to Reddit. Those outweigh the number of respondents who use Reddit to research a business, product, or service (24%), ‘troubleshooting’ (22%), and socializing (16%) (n=1,525 from 03/22/24 to 03/25/24).
3. Reddit as a Resource for Shaping Consumer Purchasing
Thanks to Google updates, Reddit posts often rank high in search results, offering potentially valuable firsthand customer insights. But how much weight do these Reddit recommendations carry? CivicScience data reveal that 32% of U.S. adults find them at least somewhat influential in their purchasing decisions, with 1-in-10 highly influenced (n=1,732 from 03/22/24 to 03/25/24).
Gen Z adults (66%) and Millennials (54%) are far more likely to be influenced by Reddit posts than their Gen X and Baby Boomer counterparts. Predictably, frequent Reddit visitors, whether daily or weekly, are overwhelmingly likely to be swayed by recommendations on the platform. However, even 3-in-10 individuals who sporadically engage with Reddit, visiting it less than once a month, admit to being influenced to some extent.
4. Advertising Offers Promise, Except Among Less Frequent Redditors
Now that Reddit is public, there’s heightened pressure to boost revenue streams. While advertising presents a viable option, recent CivicScience polling data suggest that organic recommendations carry more weight than inorganic ads on subreddit feeds. Much like organic recommendations seen above, frequent Redditors are much more likely to consider purchasing products seen in Reddit ads. Those who visit Reddit less than monthly are four times more likely to express doubts about purchasing from a brand they’ve encountered through Reddit advertisements (n= 355 from 10/01/23 to 03/25/24).
5. Redditors Express Concerns Over AI Proliferation
An even stronger source of revenue for Reddit is its deals with AI companies. The proliferation of AI tools like ChatGPT is of great concern for the majority of frequent and infrequent Reddit scrollers alike; will it be something that dissuades users from using the platform as their data is increasingly used to train AI tools?
Weigh-In: Would you turn to Reddit for life advice?
CivicScience clients have access to up-to-the-minute consumer insights like these thanks to our InsightStore™ database of 4 million daily responses. Click here to see it in action.
