Reddit recently rolled out its main shopping ad solution, Dynamic Product Ads (DPA), to all advertisers globally with the expectation to make shopping a big part of the social media platform.
Reddit launched DPA in beta in 2024. This year, the companies testing the new ads with their regular campaigns saw double the return on their ad spend compared to standard ads alone, the platform said. Plus, there are now four times as many product catalogs running on Reddit compared to a year ago.
DPA works by automatically creating personalized ads for each user. It pulls products straight from a company’s catalog and figures out which products to show to which user based on what they’re interested in and what conversations they’re having on Reddit. The ad tool uses AI-powered product matching with real-time catalog data. It combines on-platform engagement plus off-platform behavior for precise targeting.
Reddit’s new ads are similar to personalized product ad solutions offered by other major ad platforms like Amazon’s sponsored product ads and Google’s performance max ad units.
Brands like The Home Depot and Lenovo have tested the new ad unit. In a LinkedIn post, Reddit’s Industry Director of Tech and Telco Taylor Gagliardi shared that Lenovo saw a 7.4% lift in purchases, more than 19.3% lift in page visits, and more than 5% lift in add-to-carts after testing dynamic product ads between October and December last year.
“It’s a smart, strategic response to changing shopper behavior, meeting people in trusted, research-driven conversations where purchase decisions are actively taking shape,” Gagliardi wrote on LinkedIn.
For the first quarter of 2025, Reddit’s advertising revenue jumped 61% to $358.6 million.
On an earnings call Reddit COO Jennifer Wong noted that the company has made upgrades to dynamic product ads by making it easier to use for brands: “In the quarter, we improved our DPA format in two areas—performance and ease of use—and we’re excited about the roadmap for the rest of the year.”
“We’re continuing to deploy conversion and click prediction model improvements, enabling advertisers to onboard larger product catalogs with millions of products to deliver more relevant ads,” Wong added.
Overall, Reddit’s ad roadmap depends on the platform’s ability to deliver profitable outcomes to brands.
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