Piper Sandler Raises Reddit Ad Spending Outlook Following Strong July Metrics

Piper Sandler has increased its estimate for Reddit's third-quarter advertising spending by 230 basis points after strong ad metrics in July.

The analyst, Thomas Champion, noted that July ad spending across the market beat expectations broadly, with growth 130 basis points above estimates. The estimated third-quarter spending growth moved higher by 50 basis points.

Reddit's average user count fell 2% in July compared to June, but users grew 5% from the beginning of the month and another 7% in the first two weeks of August. However, changes to Reddit's ads manager model are expected to drive a roughly 20% reduction in audience size estimates in early September.

In related news, Meta Platforms' average CPM growth accelerated to 29% in July, up from 26% in June. Google's search share trends improved in July, with a 50 basis point year-over-year increase in the U.S. and an 180 basis point year-over-year gain globally.