Reddit tests search ads as weak forecast and falling US users raise growth concerns
The company is betting that ads on search pages and a shift to logged-in users can offset traffic lost to Google's AI answers.
Reddit has begun testing ads inside its search results pages, letting eligible advertisers reach people while they look for products or recommendations. The move follows a weak forecast: the company guided fourth-quarter revenue to $1 billion to $1.03 billion, below the $1.05 billion analysts expected, which it tied to falling search referrals as Google shifts to AI-generated answers. U.S. daily active users fell from 53.2 million in Q2 to 50.7 million in Q3, and Reddit warned that if the trend holds they could drop by a low double-digit percentage by Q4. Reddit also plans to move content gradually to a logged-in experience, starting outside the U.S., a change that protects its content from AI scrapers and gives advertisers richer signals for targeting. The test is initially limited to a small group of advertisers, with the company saying it will watch how users respond before refining the format.
Why it matters
For Reddit, the test is an attempt to replace search traffic that is drying up with paid placements at the point where people look for recommendations. Its own warning that US daily users could fall by a low double-digit percentage by the fourth quarter suggests the pressure is real and not yet resolved. Moving content behind a login also changes what the platform offers casual visitors arriving from outside, and it makes the audience more measurable for advertisers, so the outcome depends on whether users accept that trade. The company says it will watch how people respond before refining the format.
Series Reddit login-only browsing shift
- Reddit tests search ads as weak forecast and falling US users raise growth concerns
- Reddit moves most of its platform to logged-in use as search referrals shrink
- Reddit to end open browsing, testing logged-in-only access outside the US
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