Reddit's tax on Amazon purchases
Yesterday I saw the following sponsored ad on the reddit homepage.
The link leads to the following Amazon product page (with an affiliate id in the URL):
Having done a bit of reddit advertising in the past, I thought it was pretty clever–;a thumbnail of a hapless lobster and intriguing copy, begging for a click. The real surprise was seeing 334 comments on the post. That kind of engagement is incredibly rare for reddit ads, so I dug into the comments to see what was going on.
Sorting posts by date, it became clear that this ad had been running for a while (since July) and that it was using reddit's Amazon Associates ID (for Amazon's affiliate program).
Now here's the craziest part, the actual product is over $1400. The conversion rate on this product is guaranteed to be 0%, barring a very, very drunk shopper. However, by creating a catchy ad, reddit is able to cookie tens of thousands of Amazon shoppers. This means that reddit will be credited with an 8% commission on purchases made by those users in the next 24 hours.
I'm certainly not faulting reddit for trying to make money, but these types of campaigns are just bizarre. They make absolutely no incremental revenue for Amazon and are essentially taxing Amazon for the purchases made by redditors that mindlessly click on the ad.
Reddit could do commerce so much better, especially with Amazon. This is barely a step up above cookie stuffing. I hope that with the new raise, they'll be able to focus more on how to integrate commerce with their amazing content. It won't be easy, but attempts like this just make it feel like there is little direction to current efforts to monetize on the ad side.