Reem Makari
Mar 27, 2024

Reddit’s first day of IPO ends on a high, but will better monetisation equal tougher moderation?

The ‘Front Page of the Internet’ successfully goes public - but can it keep its communities engaged with a greater obligation to ensure brand safety?

Reddit’s first day of IPO ends on a high, but will better monetisation equal tougher moderation?

Social media platform Reddit is now officially considered a public company after experiencing a successful initial public offering (IPO), with shares closing at a rate 48% higher than the initial offer prices on day one. 

This brings Reddit’s value up to $9bn, compared to the initial market value at $6.4bn.

However, this is still $1bn lower than what the company was valued at in December 2021 when it first confidentially filed for an IPO but ended up delaying the process for two years due to the state of the stock market. 

With Reddit now becoming a public company, users have expressed concern over the r/OutOfTheLoop on the platform on what this may mean for the company’s future in terms of content moderation. Reddit now has a responsibility to its shareholders to make sure that the platform is financially viable and will have to remove any content that would risk that. 

One user said: “It is a slippery slope that people saw with Facebook and Twitter when they went public. Content moderation is going to be stricter. Questionable or risque topics/subs will be banned. More advertising, more monetisation from the user base. Mods who don't quickly police or moderate their subs will be replaced. More analytics and trackers.” 

Brand safety is an important consideration for advertisers especially when it comes to social media platforms. In November last year, non-profit organisation Media Matters released a report of a all the brands that have pulled advertising on X due to Elon Musk, the newest owner of the platform, endorsing an anti semitic conspiracy theory and a report from Media Matters showing that X was placing ads alongside white-nationaist and pro-Nazi content. 

With Reddit becoming a public company that brands can advertise on, it will be placed under a lot more scrutiny for the type of content it broadcasts than it was in the past.

Julian Klymochko, CEO of alternative investment solutions firm Accelerate Financial Technologies, told Reuters that Reddit can no longer rely on volunteers to moderate content on its website as it is not a sustainable option and will now have to make substantial investments into trust and safety. 

Klymochko added: “It's like relying on unpaid labour when the company has nearly a billion dollars in revenue.”

Source:
Performance Marketing World
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