Reddit acquires AI firm Memorable to bolster its advertising capabilities
Reddit has announced the acquisition of Memorable AI, a New York-based startup specializing in generative artificial intelligence (AI) for marketing. This move marks Reddit's first acquisition since becoming a public company in March this year. The deal is expected to significantly improve the quality of advertisements on Reddit's platform, as stated by the company's Chief Operating Officer Jen Wong.
Memorable AI's technology to enhance Reddit's ad creative
Memorable AI, established in 2021, has developed a unique technology that helps advertisers identify the most effective text, images, and videos for their promotional content. "This acquisition allows Reddit to accelerate our work in optimizing, generating, and selecting ad creative to deliver even better results for advertisers," Wong said. The team from Memorable AI will be incorporated into Reddit's advertising division as part of this acquisition. It monetary details of the deal remain undisclosed.
Memorable AI's predictive capabilities align with Reddit's goals
In addition to enhancing ad content, Memorable's technology also uses AI to predict how often an advertisement will lead to a direct action like downloading an app or visiting a website. This acquisition aligns with Reddit's ongoing investment in its advertising business and artificial intelligence tools. The social media platform first introduced ads nearly two decades ago but began investing heavily in advertising technology only from 2018.
Reddit's advertising evolution and revenue
Advertising is a major revenue source for Reddit, contributing to approximately 98% of its income. The platform reported $804 million in sales last year alone. Ads on Reddit are displayed in various locations such as the main home feed, inside discussion forums known as subreddits, and beneath user posts. Since 2018, Reddit has introduced several new advertising features including shopping and video ads.
Reddit's AI partnerships and previous acquisitions
Reddit has also been forming partnerships with other artificial intelligence companies. It has signed data licensing deals worth $203 million with firms including OpenAI and Google to aid in training their AI models. In May, Reddit announced a partnership with OpenAI that would integrate its content into ChatGPT and help Reddit add new AI features to its forums. Prior to Memorable AI, Reddit had acquired AI companies Spell, MeaningCloud, and Spiketrap.
