Did you know Reddit ads were an option in your marketing strategy?
They are an under-utilized ad platform that can be very powerful.
But, how do Reddit ads compare to Facebook ads as it pertains to getting a lower cost per click (CPC)?
The Social Media Lab will test the CPC of Reddit Ads and Facebook ads in today’s experiment.
Reddit is set to bring in roughly $119 million in revenue in 2019. Marketing Land via data from eMarketer is predicting this revenue to double over the next two years.
eMarketer also predicts Reddit to account for over 12% of all US internet usage by 2023:
While this information about Reddit and Reddit ads is impressive Facebook is still the juggernaut of online advertising. Facebook made over $55 billion in ad revenue in 2018 and is on pace to eclipse $65 billion in 2019.
Reddit Ads don’t compare to Facebook Ads regarding revenue, but the increase in revenue and usage of Reddit piques my curiosity as to will they perform better than Facebook ads regarding traffic and CPC.
Based on my research, Reddit ads don’t come close to the usefulness and power of Facebook ads.
Hypothesis: Reddit Ads have a higher CPC and drive less traffic than Facebook.
We will run two ads on both platforms, using two different links to Social Media Lab articles.
Each ad will repeat the same targets for that particular platform. Due to different targeting options, the target audience will not be exactly the same on Reddit and Facebook.
For both Reddit and Facebook ads, we will limit them to English language preference users and filter down to focus on the following countries/regions:
Reddit allows targeting based on “Interests,” based on the content users are looking at.
We chose the following interests to target on Reddit:
Facebook targeting is much more refined than Reddit. It allows advertisers to drill down, ensuring your ad is targeted at those most interested in your ads’ content.
The Facebook ad targeting based on interests looked like this:
We are able to target on Facebook those people who follow influencers in the social media marketing industry, as well as those that follow our competition. Doing so creates an audience that is much more likely to be interested in social media marketing related content, such as was used in the ads.
The ad budget for each platform was $525 (split between each ad). Typically, the entire budget isn’t exactly spent due to the ad inventory or time left in a campaign.
The Reddit ad spent $509.61 (USD), the Facebook ad spent $518.84 (USD).
Reddit ads do not allow advertisers to show a description pertaining to the link. Only a title, image, and link are shown.
This is how all posts on Reddit look and what users are familiar with.
Facebook ads, still looking like regular posts, allow more information:
Each ad ran for 10 days and was spread apart by about 30 days.
We’ve pulled the data. What did we find regarding Reddit ads versus Facebook ads?
For each platform, we’ll look at the following metrics:
CPC is the metric we will base our conclusion on, the other numbers will help you have some perspective on the ads.
Based on the raw data above we see the Reddit ads outperformed the Facebook ads in all categories–more clicks, more impressions, lower CPC.
Although there was a 1.81% higher ad spend on Facebook ads, we see these increases in performance by Reddit ads :
I expected the hyper-targeting Facebook Ads to produce more clicks than Reddit ads. Those targeted should be more interested in the content, and perhaps familiar with our brand.
But in fact, Facebook ads didn’t produce more clicks.
The higher Impressions are to be expected since the ad wasn’t as hyper-targeted, but the clicks and subsequent lower CPC shocks me!
The Social Media Lab data of this test, spending over $1000, shows Reddit ads outperformed Facebook ads by obtaining a 42.11% lower CPC.
The Reddit Ads did not prove to be statistically significant, however. (Meaning if we were to run this test again we wouldn’t achieve the same results).
This is due to measuring the click-through rate (CTR). Facebook ads obtained a 0.90% CTR, Reddit ads saw a 0.26% CTR.
We shouldn’t be shocked by the higher CTR of the Facebook ads as the audience was much more targeted.
The goal of this test was to determine if Reddit or Facebook ads had a lower CPC, therefore Reddit ads win over Facebook ads. If CTR had been our goal, the conclusion would be different.
Reddit Ads may require more impressions to get clicks, but at a 42.11% lower CPC, I’ll definitely consider them again to drive traffic to the Social Media Lab!