Reddit COO on Gen AI Models, Ads Platform

[MUSIC] Hello and welcome to the Bloomberg Tech Disruptors podcast. My name is Mandip and with me today is Jen Wong, the COO of Reddit. Jen, welcome to the podcast. Thank you so much for having me. Great. So, Jen, you've been the Chief Operating Officer of Reddit since 2018. You were involved with taking the company public and you've been overseeing the advertising sales marketing and business development for the company. I mean, really a lot has happened under your tenure and I think just to kick things off, it will be great for you to kind of describe how your path has been since going public. What are the things that you think the company has done well and what is it that you feel you were really excited about for the next couple of years? Yeah, thanks for asking. So, I think as a company, we're a stronger company after going public. We're off sale almost 21 years old this summer, so we've been around for a long time and I joined eight years ago, so this current arc of Reddit. I think being public has been great in that. I think people abroad are based understands the Reddit business, which I think is the business model, I think is really strong. We've scaled profitably. That's something we're really proud of. You were positive on a gap basis in terms of our income. And I think being public has been great in that so many of our users can be shareholders. And that's actually created a lot of interest in us as a business, not only as a platform. And you can see this in the subreddit, our slash Reddit stock, where we answer questions every quarter with our sort of user investor base, which has been great to see what's on their minds, but having users as shareholders I think has also been an added benefit. But so much about the business, I think remains the same. We've always taken a really long-term view on our mission, which is to empower communities and make their knowledge accessible to everybody. And focusing on the unique conversation on Reddit, I think for us a lot has stayed the same, obviously, after going public. And I would say just in the context of what has transpired in the last couple of months, first with the SaaS apocalypse and now with the oil shock that we are witnessing. Do you think this presents a challenging environment than what you have encountered so far since going public? I would say that from COVID till today, the market backdrop has had a lot of change and volatility in it. And that's become, I think, something that everyone in our companies become used to. It's also put in a couple of different ways, right? I mean, when there is uncertainty in the world or changes in the world, I think COVID was an example of this. I think, you know, changes in geopolitical situations like Ukraine, etc. Like, you know, people do want to go to get information. And a lot of times people come to Reddit, Reddit's communities to understand what is happening and to get different perspectives. So that's something that we definitely see. Regarding our business, I mean, obviously advertising, we have a broad advertiser base that covers every sector, right? Advertising mirrors GDP broadly. And so, you know, we've absolutely over the years seen volatility, everything from the strikes, you know, the SAG strikes and median entertainment to obviously folks watching impact from tariffs. So there's volatility in the background. But we have a really diversified business across sort of all verticals and, you know, increasingly more geographies. So, I mean, we feel like we're pretty well diversified, but obviously our job is to stay close to our customers who are, you know, trying to navigate a lot of uncertainty. So, you know, we'll continue doing that. Yeah. So talking about the diversification in your business, I mean, clearly you guys are growing much faster than, you know, your peers in the digital ad ecosystem. Like if I look at the growth of Pinterest or Snapchat, I mean, they are not even growing, you know, low to mid teens and here you are, you know, growing north of 50%. So what is it that's driving that faster growth? I have to add it compared to the beard growth. Yeah. I mean, I, you know, I think the businesses isn't a really strong position. I think we had our maybe fifth consecutive quarter growing over 60% and 10 or 11 of our top verticals are growing over 50%. So I feel really good about the broad base, you know, and we continue to add active advertise. I think they grew something like 75%. So, you know, I think we're in a very good position in terms of the fundamentals of our business. And I'll say two things. One is, I think Reddit actually has very uniquely, you strong, raw materials for an advertising business in that Reddit is pretty naturally commercial and that when you're starting an interest, you know, et cetera, you want to be a skier. Like it often starts with gear, et cetera. It's a place when you have like high consideration products, you know, you're buying electronics that are expensive or cars. You want to know what real people who have really used that product think. It's naturally very high intent and that people are information seeking and they really trust those communities that they're in. So it's high context, you know, when you're in a community or in a specific post, which is very different than maybe messaging or other platforms. And then Reddit continues to have very interesting, unduplicated reach. Like 30 to 70% of predators continue to not be on other platforms. And because Reddit's anonymous, what you reveal on Reddit is very different than in other places. So, you know, advertisers can find customers on Reddit that they can't find other places because they've revealed on Reddit that they're shopping for a car or their golfers or in my case, you know, an avid gardener. My friends, you know, maybe in places where I chat with them, they're not interested in gardening. They're not interested that I'm buying a new car. Like they're not a part of that journey. So great raw materials. I would say the other thing is like our, I think our strategy is working. And our strategy has been very focused on hard marketing outcomes and delivering competitive outcomes across the full funnel in brand, you know, research. Let's call that mid funnel and lower funnel, you know, installs, conversions, purchases. We've been very focused on converting that high intent on Reddit to hard marketing outcomes that are competitive. And we continue to get better and better as we add more signal and improve our platform. I think we've made it easier and more accessible. Our ads platform by automation. You know, you see this in our roadmap when we launch our and an automation with Reddit Max, which we did in Q1. And I think there's a lot about Reddit that is very unique that you can't get elsewhere. Things like, you know, ad creative that allows you to have a two-way engagement with, you know, asking a question and getting responses or doing, can ask me anything or having creative content. That's 500 to 1,000 words that people actually will invite and engage with or the, you know, using the Reddit conversation in ad creative, you know, as additional credibility and context for users. So those are things that I think, you know, we continue to do good work on. So I think our strategy is working, but we're certainly built on a foundation, I think, is very strong for, you know, an advertising business. And you said, you know, being anonymous is something that people like on the platform and the logged out users using the platform is something that is helping engagement if I interpreted it correctly. Like, but how does it help in terms of going down the funnel with ad targeting? I mean, that's where we see, you know, the likes of meta doing so well when it comes to their, you know, performance ads. So is that something, would it be fair to say that you guys are skewed more towards brand ads because of that anonymous nature? No, actually, the majority of our revenue are in objectives where people are seeking a hard outcome, which is either traffic and install an action in app, a purchase, a lead, like an actual hard marketing outcome. And the reason-- so being anonymous does not mean that you're all logged out. You can be logged in on Reddit. You just have a user name, which is not my PI or not your PI. And so we have both logged in and logged out users. And logged in users have long existing profiles on Reddit of their interests, et cetera. Logged out users also have existing profiles. And what we do is on Reddit, we have two very strong signals. One is where you spend time in terms of what communities you join, what your interests are. And again, those are interests that sometimes you don't reveal under your name and other spaces. Because if that context is friends and family, my friends and family are not avid gardeners like I am, for example. Nor did they go through the SUV buying process that I went through a couple of years ago. Reddit went through that with me. They didn't need to know that. So that's one thing. The second is, because Reddit is well organized in 100,000 plus communities that have posts and conversations that are related to those topics, people come in to those posts. And that's where they spend the time in that conversation. And that conversation has a lot of context. I mean, if you're in a post around what's the best ski resort this year, or what are the best ski goggles to get, or what's the best way? What are the best skis for kids, et cetera? Like we have very clear, very specific granular context of what you're looking for and what you're enjoying in that moment, which is something that doesn't exist in a lot of places. Because again, they're broad based, or they're messaging from the topography and engagement is very different. So those are really powerful signals. And that's what we've been converting is that intent, both that interest graph, as well as that context into hard marketing outcomes for our customers. So it sounds like a lot of the long context search queries are what-- I mean, clearly people use it for with that community aspects. But there is a change in behavior that's going on now with these LLM chatbots. And whether it's OpenAI or Gemini or Cloud, people are asking a lot of these questions on the chatbots, whether it's the best ski resort or something to do with gardening. So characterise the competition coming from chatbots, who in this case also happen to use your data for training their LLMs. And just would love to hear how you view them as competitors and somebody who uses your data. Yeah. So let me start at the beginning of Reddit, because what we think about every day is building great communities, growing those communities and that authentic conversation on Reddit. That's what we've been doing for 20 years. What happened five to 10 years ago is because we're open, and we believe in the open internet, we had such amazing answers to everything that we were crawled and appreciated by traditional web search. And obviously the new incarnation, the new frontier, and that is that is LLMs, right? The next incarnation of search, and which obviously also appreciates the high quality, human answers on Reddit. But what we think about every day is communities, and that's what people come to us for. They come to us because that's where you get the authentic conversation. The second order effect of that is that it's great for answering questions. So I just want to provide that context because our core users, they spend time doing a multitude of different things. They seek out communities that they're interested in where they feel a sense of belonging. Like it's a part of their identity, for part of my identity to feel like I'm in vintage cameras or I'm in baking or I'm in gardening. Like that's who I am, and that's where I spend my time. And I don't think that's replaced by any LLM. That's about people who will share a common passion, helping each other. There's a second which is around getting information, like diving into what's happening in the field, what's happening, snowstorms or Olympics or world events, and going deeper in these topics, and hearing the point counterpoint of what people think. I again think that that's very unique to read. The third is search, and search is both people coming off Reddit, asking a question and landing on Reddit because we have such great answers, as well as our core users who more and more use our own search, both navigational and agentic to mine Reddit and to get the answers to their questions. And so that's just to say, I think we have a multitude of use cases, and our core users use us for multiple different dimensions. Search is just one of them. And more and more, we think that as maybe search becomes efficient and summarized in an LLM environment, we think that the agentic search experience on Reddit, which you can try today in the NAPAR, where you show the point, counterpoint, and where you show the actual conversation happening from Reddit, and what communities has been more time in, and what posts has been more time in, to get that point counterpoint or different opinion, still is the best way for people to get all the information they need to make the decisions that they want. So a very, very different approach to search, and we think we can be the best at searching Reddit, so that's an area of investment for us, and I think it's quite differentiated. There's no doubt that the search environment in the search landscape with LLMs and Jenna, is changing, absolutely. But I don't think that changes what we spend our time on, which is the vibrancy of communities and conversation, which then provides all of that information, and in a way that I think is very unique on Reddit. - And so talking about agentic search, I mean, clearly you guys have their own Reddit answers and a product which a good portion of your monthly active users use. Like, how would you characterize the impact of Google AI overviews, and the traffic that Google used to provide to Reddit answers or your website, and how that kind of change from Google incorporating Gemini within AI overviews is impacting the traffic you used to get from Google. - I mean, I think we've learned that Reddit's content, I think, is really uniquely valuable and important. I mean, we're usually one of the top-sided domains across our AI partnerships and models. And I think we all have to remember that there's really no artificial intelligence without actual human intelligence. And Reddit is one of the largest troves of human intelligence on every topic imaginable, right? So I think we've learned that, and I think we've learned that from these partnerships. And I think that there is an opportunity is to think about what is the experience across these two products that really reveals even more, I think, of the Reddit flywheel. I mean, and you have to remember, like Reddit continues to be, to provide fresh information on every topic imaginable. And what you get on Reddit is very unique and different than on an LLM. You get the community, the like-minded thinking, the human aspect of belonging to a community and the freshness. So a very, very different experience, I think. Look, we have coexisted with search for a long time, right, as we got indexed five to 10 years ago. But what we do every day is focus on the community and that core knowledge. And for us, that is why people continue to come to Reddit. Like search behavior will continue to evolve. It's evolved over the last decade for sure. But what people come to Reddit for is very unique to Reddit. So I think, like I said, we've co-existed with search for a very long time. - And I guess in terms of the search within the platform, so it sounded like based on the recent earnings that you guys are shifting away from traditional search to LLM search even within Reddit, which is God. If I remember correctly, 23 billion posts per day or something like that. So when you have such kind of volume of information that you're generating every day, I mean, search within the platform is a big deal. And so just curious to hear how you're thinking about search within Reddit. - Look, search behavior on Reddit is both navigational and now agentec. And I think we're very early in that journey. We just integrated into search for it. I think we have a vision for what that can be, which is that. I think it's incremental and additive to it today. So today it's incremental and additive to existing engagement, which makes sense because it's helping people navigate to communities or get answered to their questions. But what it does is it shows you all the communities that a certain top of my face. So if I were to say like, what's the best face serum? So that might show up in like five to 10 different communities, right? That might show up in age community, might show up in the skin community, might show up in a product community, might show up in a more formulation like all these different aspects of that question. And that's what, you know, Reddit search I think uniquely can do with the agenda capability. And our goal is to unlock that corpus of knowledge for, you know, for our users. What's great is that, you know, right now we have 80 million people searching on Reddit. We saw that in Q4 and that's up significantly because of the the integration and because we're continuing to make that product better. I think we're at the very beginning of what that experience, you know, can deliver for our users. And, you know, I think we're in a very unique position to be able to be the best at searching Reddit. So when it comes to, again, how you show ads, I mean, it's on that core feed that when you log on to Reddit, you see ads over there. So if the behavior is being influenced by, you know, LLM type of searches, do you think there is a cannibalistic aspect to, you know, just how people engage with user-generated content like yours because of how LLMs are being incorporated on the platform? So we, our users come for, you know, a couple of different ways, right? Our core users, a lot of them, they come destination to Reddit, opening up the app and they spend time both in the feed, which is tuned to their interests as well as diving into the conversation in posts. So incredibly high intent, right, in both of those spaces, which are tuned to something they're navigating to or based on communities they've joined. We also have traffic today from search who are people who specifically use search and, you know, Reddit has been a top five, top 10 search explicit search term for a while now. And that means that they're just, they're kind of using search, but to navigate specifically to Reddit, which means they're, they already know the value of what they can uniquely get on Reddit. So our opportunity is having those users understand that they can come to Reddit for that search. Those people land on those conversations today and they habitually come back because they're navigating directly to Reddit, intentionally, you know, by appending Reddit to their searches. Remember, we have over half a billion people monthly. We have been growing almost 20% year of year or one of the fastest growing platforms, you know, certainly at our scale. We have almost half a billion weekly now. And we have 120 million daily. So those weekly users, that's an opportunity to have increased their engagement across our three use cases. That's our strategy, right, search the feed and communities so that they come even more frequently. But we've been growing. So even in this environment where there's a lot of change in search and yes, there's more agentec use, Reddit continues to grow, right? Our daily engagement, our weeding engagement, etc. So the funnel continues to grow. Absolutely. And look, I think the one question that I keep hearing is, you know, when you insert ads into AI generated answers and open AI is trying to do that, you sort of degrade the user experience and search quality. And so not sure, I mean, you clearly said that, you know, you're very early with this. But just from your perspective, you know, is that something you would be looking to do down the line in terms of adding ads to AI generated answers? I think that ads in search, which has obviously been around for a long time, I think it's something that we would consider, but it's not something that we're focused on right now because we want to tune this search experience and really land that. And I think we have a lot of ideas on how to make that even better for users and more unique. I think we've been very thoughtful about our advertising business. And I think we've built an advertising business that's really in harmony with our values, right? It really respects, I think, user privacy. We only look at signals that are on our platform. We never were affected by ATT by taking off-site browsing history. It's really logical, right? It's based on what your expressed interest is or where you're spending time. And the fact that our business is increasingly focused on the objectives when you look at how advertisers work with us on outcomes, like, performance-based outcomes, I think is great. That's what we always thought. Because that means that the user's interest is really aligned with our business. Because we don't have a business unless we're delivering hard outcomes. And a user has a choice whether to click or to buy. So if we've done a good job in satisfying the users need an intent, that's when our business grows and gets strengthened. And so I think we've done a really good job of bringing these things together in harmony with our values. And I think we'll continue to do that. Yeah. And another thing that we have seen with social media platforms over the years is misinformation or inaccurate information. So I mean, given you've got one of the largest platforms for communities, is that something that you have to actively look to find better solutions for? Or you think that's a solve problem already in terms of how you feed that information to your users? I think that we have a lot of experience in this area. And I think that our system, which is pretty unique around content moderation, I think, has been really effective. So unlike other platforms, I think this is very unique to Reddit. We have obviously our base level of policy and we have tools and monitoring to apply our policies, which you would expect. No hate, harassment, like, you know, the obvious things that are really important for creating a safe environment, a safe and open environment, which is really important, right? So we can achieve our mission and people can enjoy that open conversation on Reddit. But what's unique about Reddit is because we're organized into these communities and because all of those spaces have their own set of rules that applies to them. So, you know, in science, they care about having research that's only six months old. You know, in other communities, they'll say, okay, you know, ask Reddit has to be a question and open it into question. As a result, what happens is, and the human moderators in each of those communities, they really help those communities achieve their goals and apply specific rules that matter for, you know, for their communities. And look, most communities, vast majority have something to the tune of like, be nice, be civil, etc. And they apply that. And then on top of it, every single person gets to vote on content. They can vote up or down. And when they give it down, vote, it can be because they think it's not good. It could be because it's not culturally on point in that community. There are a lot of different reasons. But that is what makes the good conversation really float to the top. That system, which has been pretty time tested, has done really, I think, I think it's been really effective. And there's no doubt that there's always a new arc in that, right? It's very important that Reddit be the most human place on the internet. And so we tune our policies, tools, and teams like to that. There's no doubt that it keeps continues to escalate. But I think that system has done a good job for us. And look, our policies, they prohibit manipulated and authentic content. And you know, and this, like I said, it isn't a new issue. We've been at this for 20 years. In fact, just on that point, so I think that upvoting of content is unique to Reddit, like you said. And when I look at, you know, how you're working with the LLM companies, especially the ones that are training their own models. And with some of them, you have licensing agreement. Like what kind of data are they training their models on? Because this is not a one on one and done thing. I mean, even though they train their models at a given point of time, I'm sure they're coming back to you after six months for the all the updated content that you're generating. So we'd love to hear, you know, any insights around what content the frontier models are leveraging from you. Yeah, I'm not gonna comment specifically on these partnerships, but if you just look at Reddit's corpus, which you know Again has been open Because we want people to be able to get answers to their questions You know, it's a reddit's content is really broad covers almost ever I think pretty much every topic you could you know be interested in it's extremely fresh in that You know a new car comes out and a person who's driven it is gonna have a comment on it immediately and it's gonna be really authentic It's not um paid for there aren't you know influencers like it's really just somebody's Answering question to be helpful It's well organized because it's in these communities that are you know on specific topics It's well ranked in that every comment and every post has an upvote and a downvote and it's really well moderated So you know what's relevant in on topic so having a Trove and you mentioned the 24 you know billion posts and comments that we have like that is an usually unique Dataset to have all of those characteristics that regenerates every minute of every day Covering everything that happens, you know to humans that is just extremely unique that is well organized and ranked I mean the reason I bring up that upvote aspect is because one of the biggest criticisms of these LLM companies was their hallucination and you know The lack of freshness of content Clearly they're trying to solve for it using tool usage and other techniques But if if they have access to you know Just a corpus. It's very different from having access to the details around you know Content that's upvote and and that obviously makes their results The ranking. Yeah, so yeah, okay, and and so That's good to know and and I'm guessing that's a dependency that clearly if if they want to train their models on on the breadth of Content that you guys have on your platform if this is Something that like it's it's not a one-end done. They they'll have to keep coming back to you know you for training there Models would that be their right framework to think about it. I mean the way I think about it is again It can't come on a specific partnership is if you want a really good search experience You want fresh information. Yeah, right? And you want off you want fresh authentic Relative information that is from people who have really good advice that is valued by other people that is I you know, I think what Reddit has that is very unique at scale covering pretty much every topic So I like to keep the last couple of minutes for a lightning round and you know you can keep your answers brief And we'll try to get to some topics you mentioned you you're interested in gardening how many communities Are you part of in reddit? It's a good question. Maybe through your four. I like you know, it's funny I'm obviously a zone seven US gardener, but I really admire UK gardening so I spent a lot of time understanding what happens and across the pond. I think UK gardeners are maybe Work creative maybe more even more experience than US gardener sometimes so maybe three or four communities. Yeah, okay Most important metric of your business success given you are the chief operating officer Look, there's two things that matter for the company. It's the growth in our users Our daily users and our revenue growth because in the end we're a growth company We have so much growth ahead of us. So we think about growth If I had to if I was given a third, I would say it's profitability So it's you know how we convert that growth into you know profitability and you know and reinvest it into our business Which I think we've demonstrated, but it's a combination of those two things. I think we're very thoughtful About how we invest Um, and we take a pretty long-term view because again when you're a company that's been around for 21 years And you really believe you know, you're gonna be around further 20 plus like you you really think uh long term What is the one technology or trend you are most excited about over the next two years? There's so much to be excited about I guess like you know on a personal level. I think that Like I have an eight in a four-year-old and I think that I think about their How their lives will change and be so different And I get so excited about I mean everything from autonomous driving Frankly to the robotics aspect autonomous driving like a lot of the translation of AI into Physical tasks. I get really excited about. I think what's in the next 12 months? We're gonna start to see more of that Yeah, are you supply constrained in any way when it comes to running your business? I mean look, I think that we we're marketplace, right? So we grow We grow demand and supply together and they match in the marketplace um, I think there is an incredible amount of Interest and demand for advertising on reddit and for those marketing outcomes that we can deliver So Sure, I mean, you know, I think that you know if I could you know, I think our goals to in the next milestone for us is to be a billion users If I could have those billion users tomorrow that would be better than you know waiting for it, but um Uh, so in that sense maybe supply constrained Um, but I think if you look at the growth of our business, I think Um, the two have been matching up quite nicely Okay last two uh What is the one thing that could go wrong with the assumptions that you're making about your business? I mean look, I think I think we have really good raw materials And I feel really good about the technology Available to convert that for our business I think that I mean the world is changing dramatically um, and I think our job is to do things like make sure that reddit is for humans You know, that's really really important. I think we're doing a job there, but that's really important I think making sure that the overall advertising market continues to have room for diversity and new platforms I think is really important. That's really healthy in terms of competition and innovation And I'd say I think the other is that you know a company like Fred it that really believes in open conversation Can continue to foster open conversation across every geography possible because I think what is one of the promises of the internet and I think is Interval to our mission is the fact that people You know with no language friction should be able to help each other and have a universal conversation about parenting no matter what country you're in and whatever you You know wherever language you speak and you know keeping those Those borders open for that conversation. I think it'll be important. So those are three things that I think about Okay, and lastly any Misconceptions about reddit that you want to clear on this podcast Oh my gosh, I mean there's been so many myths that we busted over the years. I could list them. Yeah, you know, they're they're ones like Um, that being anonymous platform needs to Poor behavior whereas I think in our experience is certainly in my experience after being afraid years I think reddit is one of the most like Optimistic heartwarming helpful places on the internet and it is a non You know anonymous people helping other anonymous people, but I think that's a that's a myth that people are in better behavior when they wear their their name um, you know, I think um You know, I think there's a there's a myth that you know, you can just AI like everything in terms of answers and moderation etc We really believe in humans. We really believe that humans allow for nuance and are really important for you know In addition to technology for being the best judges of what is You know appropriate for our community and for helping those commit fostering the growth and the culture of a community So in an AI world, I think we believe in humans, you know more than ever Maybe that's a little bit more counterintuitive to to maybe mainline thinking that you know privacy Is you know, you kind of asked us might be Hard to negotiate with having an effective ad targeting platform. We don't believe that I think we've built a business that is in harmony with our value one of which is privacy is a right for our redditors um, I think our advertising is logical and is you know based on what how you spend your time and You know not unexpected tracking you off of reddit. So these kinds of things over the years I think we have turned out to be very different Then um, and I think we've you know, we've had to break these myths. I'd say over time Great uh, Jen it's been an absolute pleasure having you on the podcast really enjoyed the conversation and I want to wish you the very best