Reddit signed its first-ever enterprise partnership agreement with a media agency, teaming with Omnicom Media Group (OMG) to provide advertisers with deeper access to its platform. The agreement encompasses OMG's media-buying shops, including Hearts & Science, OMD, PHD and Resolution, per an announcement.
OMG clients will receive greater support from Reddit's creative strategy team and access to education and training tools, measurement, reporting, data and insights on the platform's 52 million daily active users. OMG's customers can also participate in Reddit's innovation offering that includes early ad product and feature testing.
Reddit's agreement with OMG comes as the platform, which is majority-owned by the Newhouse family's Advance Publications, seeks to expand its advertising revenue opportunities. Revenue growth would support Reddit's valuation as it prepares for a possible initial public offering of stock.
Reddit's tie-up with OMG will provide the agency and its clientele with more specialized access to a site that millions of consumers use to share news, information, questions and opinions about varying topics through forum discussions. The pact builds on other partnerships Omnicom has struck with digital platforms as the agency giant looks to get in on the ground floor of emerging digital media channels.
Reddit has more than 100,000 communities, called "Subreddits," where people organize around their various interests. These groups give advertisers a way to interact with an audience of enthusiasts that can include brand loyalists or consumers who are most likely to convert into customers. With the expected deprecation of audience tracking technologies like third-party cookies and device identifiers in the near future, Reddit is leaning into its strengths in contextual-based advertising to its communities.
"At a time when brands are more focused than ever on building an emotional connection with consumers, Reddit's communities offer a unique opportunity for brands to engage with customers around their passion points," Sal Candela, OMG president of U.S. investment, said in the announcement.
The partnership comes as brands are forecast to keep increasing their spending on social media. U.S. ad spending on social networks this year will grow 21% to $48.9 billion and by 16% to $56.9 billion next year, researcher eMarketer estimated. The forecast indicates that brands will boost their efforts to reach consumers through social media platforms as the economy recovers from the pandemic-driven recession and spending power grows. Amid a surge in social media usage, platforms including Facebook, Instagram, Pinterest, Snapchat, Twitter and TikTok also have seen greater adoption among a wider range of advertisers.
Reddit has worked to keep pace with social media trends, including the growth in video consumption. The company in December made its first major acquisition with the purchase of Dubsmash, a short-form video-sharing social media platform that touts a diverse creator base. Dubsmash claimed to generate about 1 billion monthly video views, with 30% of users logging in daily to produce content. The acquisition indicated that user-generated video was a key part of Reddit's bid to grow a bigger ad business.
For OMG, the agreement with Reddit marks another step in collaborating with emerging digital media platforms that are drawing interest from brands. The agency last year signed a $20 million agreement with audio streaming platform Spotify that gave the agency holding group and its clients special access to innovations around podcasts, including ad products, audience data and exclusive content.