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Will Reddit Ads Beat Instagram Ads In The CPC Race?

June 30, 2020 • By

Scott Ayres

Are Reddit Ads Better Than Instagram Ads?

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So far in the Social Media Lab, we have found that Reddit ads resulted in a lower cost per click (CPC) when compared to both Twitter and Facebook ads.

Now, we will compare Reddit ads to Instagram ads to see how they stack up.

Facebook-owned Instagram brought in about $20 billion in revenue in 2019, equating to a quarter of Facebook’s revenue, according to Bloomberg.

In the same timeframe, Reddit had about $119 million in revenue, quite a difference from Instagram’s ad revenue.

reddit adsSome marketers may wonder, “Why should I advertise on Reddit?” After all, most social media marketers likely have ignored the platform due to its user interface. Also, Reddit has the reputation of being a place full of trolls and fake news. 

I bet you didn’t know that 41% of Reddit users do all or almost all of their shopping online, compared to only 24% of those surveyed that are non-Reddit users, according to Civic Science.

Civic Science also found that Reddit users are twice as likely to pay attention to online social media ads, compared to those who don’t use Reddit.

reddit adsData such as this leads me to be more and more interested in Reddit ads as a viable platform to drive traffic to the Social Media Lab.

Based on our previous Reddit studies, this is my hypothesis:

Hypothesis: Reddit ads have a lower CPC than Instagram ads.

testing reddit ads

Ads Used for Testing

We will compare results from two ads on Reddit and two ads on Instagram sending traffic to the same Social Media Lab blog posts.

Instagram Ads

Below are the ads on Instagram.

The first ad sent traffic to an experiment testing cutting the frequency of Instagram posts in half.

The second ad directed traffic to a test finding out if Instagram punished posts from 3rd party scheduling tools.

If you’re familiar with Instagram, you’ll notice the ads look like any other posts found on the Instagram feed, with the exception of “Sponsored” shown below the Agorapulse account name.

instagram adsinstagram ads

Reddit Ads

The Reddit ads sent traffic to the same Social Media Lab blog posts.

You’ll notice they look slightly different from the Instagram ads:

ads on redditreddit adsOn Reddit, you don’t get much real estate when making ads or posts organically. The only elements you can have are a title, URL, and the image. Notice also that Reddit users are told this is PROMOTED and by what account.

Though not 100% exactly the same, the ads are directing traffic to the same articles with the same images and are what typical ads on these platforms look like. 

Ad Budget

Our initial budget on both platforms was $550 split between the two ads. However, the ads expired before the full budget was spent.

The Reddit ads spent $509.61.

We spent $518.45 on Instagram ads.

Ad Targeting

The ads on both Reddit and Instagram were limited to English-speaking users only in the following countries:

  • Australia
  • Canada
  • United Kingdom
  • United States

On Instagram, we targeted various interests in addition to the language and location:

  • Science
  • Mari Smith
  • Joel Comm
  • Social science
  • HootSuite
  • Post Planner
  • Smart Passive Income with Pat Flynn
  • Kim Garst
  • Sprout Social
  • Social Media Examiner
  • Buffer

Reddit’s targeting after choosing language and location isn’t as robust as Instagram. For this test, we targeted these interests:

  • Business
  • Podcasts
  • Computing
  • Virtual Reality

Data Comparing Instagram Ads vs Reddit Ads

For each platform, we looked at the following metrics:

  • Impressions
  • Clicks
  • CPC

CPC was our deciding factor on which ad platform performed best at driving lower cost traffic for this experiment. To verify whether our findings are statistically significant, the Impressions reported by each platform will be imperative.

Instagram

  • Impressions: 27,347
  • Clicks: 393
  • CPC: $1.33

Reddit

  • Impressions: 454,646
  • Clicks: 1171
  • CPC: $0.44

It’s obvious that Reddit resulted in more clicks and a much lower CPC. Translating these differences into percentages help further evaluate the magnitude of these results.

Reddit outperformed in all categories:

  • Impressions: 1562.51% higher
  • Clicks: 197.96% more
  • CPC: 66.92% lower

Very impressive differences by Reddit compared to Instagram.

reddit ads

The Social Media Lab concludes that Reddit ads, due to the lower CPC, win this competition.

But Are Reddit Ads Better for Everyone?

If you are testing ads to see which ad in a campaign on the same platform is the winner, you will typically decide if the ads were more successful based on click-through rate (CTR). We, however, were testing platforms vs platforms so this makes using CTR as a deciding factor impossible.

Instagram ads had a 1.44% CTR.

Reddit ads had a 0.26% CTR.

Our ads were more appealing to Instagram users and got us clicks faster, which isn’t shocking based on the more granular targeting allowed on Instagram ads.

But again we are wanting the most clicks at the lowest cost possible for this test to drive traffic, Reddit ads crushed Instagram ads in this test based on our goals.

*We have continued to run ads on Reddit after this test, spending an additional $1,000. We’ve been able to lower our CPC to $0.28, with a CTR of 0.35%. We’ve also discovered targeting better subreddits (which are niche communities within Reddit created by users) and interests within the “Business” and “Marketing” categories.

Reddit is an untapped platform to drive traffic at low costs. The Social Media Lab recommends you start considering Reddit ads if you want to drive traffic to your site.

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