Reddit Integrates AI-Powered Commerce
Reddit has launched an AI-powered search experience that embeds product carousels with purchase links directly into results for some U.S. users. The move is part of a broader strategy to capture commerce value on-platform, supported by recent acquisitions of AI firms like Memorable AI and Spell. The company reported a 30% year-over-year increase in weekly active users and quarterly revenue of $725 million.
- The new AI feature scans organic user posts and comments for product recommendations in response to queries like "best noise-canceling headphones," then assembles them into shoppable carousels with pricing and retailer links. - This system is an expansion of Reddit's Dynamic Product Ads (DPA) infrastructure, which the company first launched in 2024 to automatically create ads from advertisers' product catalogs. - The acquisition of Memorable AI, Reddit's first since going public, provides technology that uses AI to predict how likely ad creative is to result in a direct action, such as a website visit or app download. - This purchase is part of a broader strategy of acquiring ad-tech and AI companies, including machine-learning platform Spell, contextual intelligence firm Spiketrap, and natural language processing company MeaningCloud. - In its most recent quarterly report, advertising revenue grew 75% year-over-year to $690 million, making up the vast majority of the company's $726 million in total revenue. - The platform's Daily Active Uniques (DAUs) increased by 19% year-over-year to 121.4 million, with international growth of 28% significantly outpacing the 9% growth in the US. - The move places Reddit in the social commerce market, which is projected to become a $1 trillion industry by 2029, competing with established shopping features on platforms like Instagram and TikTok. - Reddit CEO Steve Huffman has called AI-powered search the company's "next big opportunity," signaling further investment in commerce-related tools.
