Reddit forces personalized ads, starts X-like user payment program

Reddit rolled out some changes this week as its continues its push for revenue and profitability jumpstarted by its API rule changes in July. Among the most controversial, the company will no longer allow users to opt out of ad personalization based on their Reddit activity and started a program that lets users exchange virtual rewards for their posts for real money.

On Wednesday, Reddit announced plans to "improve ad performance," including by preventing users from opting out of personalized ads except for in "select countries." Reddit didn't specify which countries are excluded, but the exceptions could include countries falling under the European Union's General Data Protection Regulation. Reddit spokesperson Sierra Gamelgaard declined to provide further clarification when reached by Ars Technica for comment.

Reddit's announcement, authored by Reddit's head of privacy, going by "snoo-tuh" on the platform (Reddit has refused to confirm the identity of admins representing Reddit on the site), said that its advertisers look at "what communities you join, leave, upvotes, downvotes, and other signals" to gauge your interests.

Snoo-tuh wrote:

For users who previously opted out of personalization based on Reddit activity, this change will not result in seeing more ads or sharing on-platform activity with advertisers. It does enable our models to better predict which ad may be most relevant to you.

Still, Reddit users have expressed concern over suddenly losing a privacy control they've long had. Meanwhile, Reddit's policy update aligns with its outspoken goals to become profitable and its plans to eventually go public. Reddit has already sacrificed other aspects of the user experience, as well as some community trust, in an effort to drive revenue. Reddit declined to provide comment regarding privacy concerns related to this latest update.

Other privacy policy changes announced Wednesday include allowing users to choose to see "fewer" ads regarding alcohol, dating, gambling, pregnancy and parenting, and weight loss. Reddit didn't commit to all ads being removed initially since its system of "manual tagging and machine learning to classify the ads" may not be totally accurate at first. Snoo-tuh said things should get more accurate "over time," though. Reddit’s Contributor Program

Also this week, Reddit announced its Contributor Program, launching in the US only for now. Reddit users with 100–4,999 karma can earn $0.90 per gold received. Users with over 5,000 karma can get $1 per gold received. Users can pay for gold to award to other users.

The scheme is reminiscent of the Creator Ads Revenue Sharing program by X, formerly Twitter, where premium subscription members can get a portion of ad revenue generated from their posts. Elon Musk announced the program in February, and it launched in July.

X's program has been criticized for potentially encouraging spam-y, bait-y posts and posts that are controversial and offensive, just for the sake of generating reactions and comments that will lead to the user making money. But that hasn't stopped Reddit from enacting a user payment scheme of its own (after all, Huffman has said Musk's X is an example for Reddit.)

However, clickbait and shock value posts are a strong deviation from what people tend to treasure most about Reddit: real human advice, discussions, and insight.

In an interview with BBC, social media analyst and consultant Matt Navarra noted that Reddit was incentivizing and providing opportunity for its top users but that it could also jeopardize Reddit's content quality.

Navarra told BBC:

[X's ad sharing program] incentives X users to post content that sparks the most replies, and the characteristics of content that typically generates the most replies is content that is divisive, polarizing, provocative, and controversial... exactly the sort of content that brands do not want to have their ads placed amongst. This has been problematic for Elon Musk, and it could become a new problem for Reddit's founders too.

When I reached out to Reddit about these concerns, spokesperson Tim Rathschmidt pointed me to Reddit's blog post about the program. It says that users have to be at least 18 years old and verified by Reddit to participate and that:

All monetizable contributions are subject to Reddit’s User Agreement and Content Policy. In addition, Reddit will take the same enforcement actions against contributions breaking Reddit’s rules and withhold any earnings on content that violates the Content Policy or the new Contributor Monetization Policy and Contributor Terms for the program.

A support page says Reddit's Contributor Program will avoid "fraud, spam, bad actors, and illegal activities" by putting users through Persona's Know Your Customer screening. It also points to "Reddit internal safety signals," "new monetization policies with enforcement and repercussions," "daily gold purchase limits," "automated detection and monitoring via Reddit’s safety tools and systems," "user reporting," and "admin auditing."