Reddit may not be the best place to be on the web. And with its old classic web design, it seems that the site is outdated to a margin that it won't be able to compete with others. But this is where many people got it wrong.
It's hard to ignore that the site isn't one of the best places to find interesting content from around the web. But Reddit with the slogan "The front page of the internet", is indeed a massive community.
But with having active communities with subreddits and talks about almost everything, the service has had difficult times in ramping up its advertisement business. As a growing company, it's obvious that Reddit needs money to keep its operation expenses covered. But with sparse ads and Gold user subscription plans only contribute to a small extent, it certainly needs a new way to stay viable in the times to come.
Starting June 3rd, 2016, Reddit is going to use a popular strategy often overlooked by others, and that is called "affiliate marketing".
We're going to be launching a feature that will automatically rewrite many links to online merchants so that they include a Reddit affiliate code. This feature will go live on June 3, 2016. Reddit will receive a small (generally single-digit) percentage of any purchases after someone clicks a link with one of our affiliate codes. This is part of our overall initiative to transform Reddit into a sustainable long-term business.
The feature works by passing the browser through our partner VigLink, which rewrites the URLs to include an affiliate code. VigLink is contractually obligated not to store any Reddit user information.
We've updated our user agreement to specifically include the affiliate program.
While many competitors and social media networks opt for advertisements. And by collecting more user data, they're trying to effectively target all advertisement slots to those users. While this strategy do work for them, but to Reddit, the idea is not that simple.
Reddit is not a place for ads, and ads aren't popular in it. The more traditional approach on affiliate links is a much more convenient strategy.
With this, Reddit will get a small cut of purchases that happen after users click though to an online store beyond its site. For example, when a person clicks on the affiliate link from a partner that is advertising a phone, and do the purchase for that product, Reddit will make some money.
And because Reddit's popularity is already at large, managing all the links it has could be a problem. As a solution, the company that is trying to ramp up its effort, is partnering with VigLink to automatically rewrite links to around 1,500 merchants.
Affiliate links is still widely popular. Many websites and blogs are still using it, and the strategy has proven to be a great source of revenue to them. But to web services that has a league on their own, using affiliate links aren't that popular if compared to ad placements and ad targeting. The reason for this is because users are their products. Something that seems to not apply to Reddit.
As for Reddit that has been trying to ramp its business and revenue, and given to Reddit's popularity, this new affiliate link strategy should give another healthy stream of money.
The company originally planned to launch this feature sooner, but changed the rollout date after commenters protested that the announcement should be posted more broadly first.
So whether you love or hate Reddit, revenue is the way to live on the internet. Because affiliate link strategy won't be noticeable when you're not careful with the URL, the method is less invasive to users. But what this means also has a drawback. Reddit's links that user has posted, will be replaced to a new link that identifies Reddit as a source.
But it should be noted that this won't interfere with existing links. So if you have already added your own affiliate links to make money from Reddit, you should not worry that Reddit will customize your URL to benefit its own. And as for Reddit's partnership with Viglinks, the contract disallows Viglinks from storing user data or cookies during this process.