Reddit is now home to 330 million monthly active users and recently raised $300 million in funding, giving the company a $3 billion valuation.
However, with annual revenue of $100 million, Reddit has the least valuable users of any other social network.
Reddit’s average revenue per user is only about $0.30, which is significantly lower than Facebook, Twitter, and Snapchat.
Twitter has slightly fewer monthly active users at 321 million, but it earns about $9.48 per user per year.
Facebook, with 2.32 billion monthly active users, has an annual revenue per user of $7.37.
Snapchat reported an annual revenue per user of $2.09 in its latest earnings report.
Reddit CEO Steve Huffman speaks on the work the company has ahead of it, with respect to earning advertising dollars:
“We are reinventing the ads business, both on the technology side and our ability to sell it and to create a friendly home for users and brands alike.
So we’ve made steady progress on all of these fronts over the last year, and we feel pretty proud of where we are. And as a result we are seeing a lot of attention from both brands and investors.”
What Reddit has going for it is half of its users are between the ages of 18 and 24.
That’s a valuable, hard-to-reach demographic that has the potential to make Reddit appealing to advertisers.
The greatest hurdle Reddit has to overcome is its own reputation.
Reddit frequently draws criticism and concerns over abuse, harassment, and piracy amongst its users.
In order to compete with other social networks in terms of revenue, Reddit has to foster a more positive environment for advertisers.