Why Reddit Has To Get Mobile Right

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Reddit has had a tough time going mobile. Their initial attempt at an official app failed in 2011. Since then, a plethora of independent Reddit apps emerged, capturing a part of Reddit’s potential mobile audience. Searching ‘Reddit’ in the Google Play Store shows 12 Reddit apps/readers/clients in the top 15 search results, produced by 8 different publishers. None of which are Reddit. These apps had cumulatively over 7 million downloads, which is almost 20% of the total number of accounts on Reddit.

The net result is that Reddit’s mobile strategy not only has to successfully usher its own traffic towards mobile, but also develop tactics on how to win back users from grey market alternatives. To kick things off, in 2014 Reddit acquired ‘Blue Alien’ -the most popular Reddit client on iOS. The new app, which is now in Beta, is an attempt to capture mobile ground on Android.

Owning its app ecosystem is important for several reasons:

  • An under performing ad business: One, the app environment opens up in-app purchase revenue streams. Reddit was initially built as an ad supported model. But its audience quickly reacted against Reddit’s use of ad formats and appearing to be overly commercial. As a result Reddit today still predominantly uses basic banner ads. The lower CPM of those ads in the increasingly saturated display ad market means that Reddit is already earning comparably less revenue than other ad supported publishers.
  • Adblock impact: Furthermore, due to the technological sophistication of its users, Reddit is likely more heavily affected by the adblocking boom than others publishers. Ushering traffic to the currently adblock-safe app environment would help address this problem.
  • Premium upsell: Reddit has been trying to tackle these ad-revenue challenges by selling Reddit Gold Subscriptions for $3.99/month, but has been able to earn only a fraction of its ad revenue through this. Being able to control its own app ecosystem would improve the ability to upsell mobile users.
  • User data: Tracking mobile app user behaviour is crucial for Reddit to learn more about their mobile community and to design future improvements accordingly.

A Tale Of Two Audiences

Reddit is a host to two distinct communities: those who regularly engage and post on Reddit, and those who predominantly read it. Our just published MIDiA report ‘The Mobile Web: The Lean Back Legacy’ reveals that lean forward propositions are a stronghold of the app environment, while more lean back propositions often thrive in the mobile web browser. It is because lean forward, action-seeking propositions often have more room to improve the user experience via an app. Lean back propositions require looking/listening only, so there is less space to further simplify the experience. Following these findings, those who post and moderate on Reddit the most will be first to adopt the app. They are also the strongest leads for additional in-app purchases. But those who only read Reddit are less likely to make the effort of downloading and using an app, since it might not justify the additional value they’d be receiving. It will be harder to get them on board, no doubt.

Should Reddit spend additional resources on ushering passive users into its app? On one side, Reddit has a strongly loyal community. It largely relies on people coming back to ‘check Reddit’, as opposed to users coming through one-off embedded posts spotted on third party websites, like in the case of Buzzfeed. Leveraging this loyalty, Reddit could try to usher its ‘passive viewers’ into an app in a bid to prevent adblocking. However, there is a limit to the Reddit superfan-reader audience, and Reddit knows it. Announcing embeddable posts in March was a move to unlock new audiences from third party sites. These new audiences are drawn to Reddit through a one-off post, rather than a routine. Convincing them to download the app will be even harder than with loyal passive readers.

To sum up, Reddit app is well positioned to boost the premium part of its business, but shouldn’t overspend on trying to push its passive readership traffic into the app straight away. Instead it will be important to acknowledge third party mobile web traffic as a distinct segment and ensure the mobile web experience is to par, especially when new audiences visit. Building a positive sentiment in this sense is the first step on the considerably longer journey of ushering passive audiences into the relatively adblock free app environment.

The report ‘The Mobile Web: The Lean Back Legacy’ is immediately available to MIDiA Research clients here. If you would like to learn more about how to become a MIDiA Research client either visit this page or email us at info AT midiaresearch DOT COM


Tagged in: App Monetization, Freemium, Mobile App Strategy, Mobile Apps, Mobile Content, Mobile Web, Reddit, Subsription Service

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