It would be safe to assume that in this day and age you would most certainly be living under a rock if you do not know what reddit is. Did you stumble upon this great haven of knowledge and trivia to search for some obscure fact or maybe you used it to find that one bug fix which you could not find the fix for even after spending ages on stack-overflow or maybe you found out about reddit when looking for product reviews, non-solicited financial advice or to look at the advancements in a particular field of your interest. Even if you haven't had any of these moments of discovery chances are you have overheard some teenager or gen-z saying something on the lines of - 'oh I saw it on reddit'.

Reddit has over the years become this one stop shop for no bullshit content. Since the user base is anonymous and the platform does not follow strict censorship on its content there is no bar on the type of information which is being shared. You just have to look at the right places.

These subreddits have rich history and tradition attached to the creation, moderation and expected behavior from users. Reddit as a whole has given rise to many sub-cultures and micro-cultures. There are immense number of studies covering almost every way reddit has touched the social fabric. All in all reddit is the place which upholds the core principle of internet - pure information with no strings attached.

In the coming project we will be focusing on the Indian expansion of reddit. We would consider that reddit is in India in an early scaling phase. In reality this statement is not that far from truth, as all the indicators do suggest that reddit is somewhere between mid to late stage early scaling.

The following table helps us understand the results of our experiments. One extra thing to note is the version of the application, though not directly part of content loops, it will be beneficial to club this experiment here.

Assessing Market Potential

Calculating TAM, SAM and SOM

To assess the market potential we will be going via the TAM route. Total Addressable Market is an indicative figure which helps us understand what is the ceiling of our expectations, or simply put how big is the denominator. Given reddit is such a vast collection of information of almost any kind, the TAM is enormous - anyone aged 13 and above, as this is the age limit which reddit adheres to. We shall be restricting the TAM to 45 as there is significant drop off after that. Almost half the population of India falls under 13-45 age bracket - giving us a TAM of ~0.7 Billion people.

Though all of this market is not serviceable with the current design choice of the app. Given the app is only offered in English, this reduces our SAM by a significant margin. We shall be focusing on people who have certain fluency level in English, we shall be going forward with a conservative estimate of 15%. This gives us a SAM of 100 Million.

Going further it would be interesting to find out what is the portion of this market that can be obtain with the current version of the product. It would not be far from the truth to assume that college education will be a very strong indicator for reddit usage as the primary mode of information exchange is via long text walls. Using this information we get another cut into our population size of about 28%.

This finally leaves us with an estimate for our SOM which is around 30 Million. 

Arriving At a Core Value Proposition

Having now arrived at a well defined SOM, it becomes easier for us to draw out the pitch and messaging for the the product. The messaging should highlight what the product can truly mean to our user base and what is it that they might be actually looking out for. For these reasons a simple yet powerful set of words should do the trick - 'The heart of Internet'.

We will further write down a bunch of phrases which will capture the essence of broadly what our messaging will look like and we will draw an inspiration from them while forming the design language of the product.

• All About Conversations
• Inherently Eclectic
• Confidently Ourselves
• Delightfully Absurd
• Genuinely Candid

Designing Paid Advertisement Strategy

To attack this problem, we have to first identify the messaging of the advertisements. Going via the billboard route we have two things to keep in mind. Simple and direct messaging. Minimal text. For cities like Mumbai, Delhi and Bangalore where the city subreddits are active and can serve a really good entry point to the platform as a whole.

Here are a few phrases that we will experiment with:

- Reddit, The heart of internet

- city is on r/city (bangalore is on r/bangalore)

We will run the bill board campaign in a very few (not more than five per city) but highly prominent areas.

To understand if the Paid Ads have delivered on user numbers we can run the following analysis. Isolate the user growth number for the city in which we run the campaign prior to the deployment.

To get a fair idea and to compare apples with apples we will calculate the user growth in the following manner:

Growth in Week_i = (Users on Week_i - Users on Week_i-1)/(Users on Week_i-1)

Growth Factor in Current Week = Average(Growth in Week_0, Growth in Week_-1, Growth in Week_-2, Growth in Week_-3)

We will keep monitoring this number and wait for a significant uptick. If an uptick is not registered in the deployment period (say 1 month) we can consider the experiment to be a failure otherwise it will be considered a success.

ICP Targeting

Let us try to examine how the billboard campaign will work-out for the ICPs that we had defined earlier.

Young Adults (Age 18-22)

• Profile: College students, curious and active online, interested in fashion, memes, subcultures, and sports.
• Why Billboards Work: These users are often around college areas and city hubs, where billboards can easily catch their attention. The tagline “city is on r/city” (e.g., “Mumbai is on r/Mumbai”) taps into their curiosity and local pride.
• Expected Impact: Likely to explore the platform, join subreddits, and share their experiences, driving more sign-ups from their circles.

Young Turks (Age 22-30)

• Profile: Working professionals who are social, connected, and often interested in careers, fitness, travel, and networking.
• Why Billboards Work: Placing billboards in areas like business districts, cafes, and gyms will reach them during commutes or breaks. Messaging like “city is on r/city” (e.g., “Delhi is on r/Delhi”) appeals to their social and local interests.
• Expected Impact: Likely to explore and share Reddit within their networks, increasing visibility and organic growth.

Boomers (Age 30+)

• Profile: Professionals with focused interests, such as food, fitness, and specific hobbies like gardening.
• Why Billboards Work: Billboards near transit points or business areas provide a non-intrusive way to introduce Reddit. “Reddit, the heart of the internet” speaks to their curiosity about niche communities.
• Expected Impact: They may not drive high volume but can bring consistent engagement in specific subreddits, with strong loyalty potential.

CAC:LTV

To evaluate the billboard campaign's success, we’ll analyze Customer Acquisition Cost (CAC) and Lifetime Value (LTV) to determine the campaign’s impact and efficiency.

CAC Calculation

Campaign Variables Affecting CAC:

• Number of Billboards: We’re placing no more than five billboards per city, ensuring visibility in high-traffic areas.
• Billboard Costs: Total cost will vary based on city, location prominence, and contract duration.
• Creative and Production Costs: Includes design and content for the ads.
• Monitoring & Analysis: Any costs associated with tracking, data analysis, and adjustments.

Defining Customer Growth and Acquisition:

• Growth in Week_i = (Users in Weeki−Users in Weeki−1)/Users in Weeki−1(\text{Users in Week}_i - \text{Users in Week}_{i-1}) / \text{Users in Week}_{i-1}(Users in Weeki​−Users in Weeki−1​)/Users in Weeki−1​
• Growth Factor in Current Week = Average(Growth in Week_0, Growth in Week_-1, Growth in Week_-2, Growth in Week_-3)

We’ll isolate user growth within each targeted city, comparing growth rates before and after the campaign to assess any uptick in users due to the ads.

Customer Acquisition Cost (CAC):

• CAC = Total Campaign Cost / Total New Customers Acquired
• This formula allows us to evaluate the cost-effectiveness of the billboard placements in acquiring new users.

LTV Calculation

Since Reddit’s primary revenue source is advertising, we’ll use user engagement metrics to estimate Lifetime Value (LTV):

Factors to Consider for LTV:

• Frequency of Visits: Average number of times a user visits Reddit per month.
• Average Session Length: The average time a user spends on the platform per visit.
• Ad Load per Session: Number of ads shown per session length.
• Impressions and CPM: Number of impressions generated per user and the average Cost per Thousand Impressions (CPM) for ad revenue.

Calculating LTV:

• Monthly Ad Revenue per User = (Average Monthly Visits) x (Average Session Length) x (Ad Load per Session) x (CPM / 1000)
• Lifetime Value (LTV) = Monthly Ad Revenue per User x Average User Lifetime (in months)

Ratio

Finally, by comparing CAC to LTV, we’ll determine the effectiveness of the billboard campaign. A CAC:LTV ratio less than 1 indicates a profitable campaign, while a higher ratio would suggest that acquisition costs outweigh the lifetime revenue generated. This measure will guide whether the campaign model is sustainable and should be repeated or scaled.

Design of Experiments / Channel Selection

In the case of reddit the idea is to create enough pull. The platform is run by user content, but if there are no users where will we get the content from and hence where will we get the users from? A classic chicken and egg if there were one. So the idea here is to attack the channel selection problem by reversing the process. We start from the platform itself and try to create pull from the content which is on it.

This will help us create experiments across these three channel:

• Organic
• Content Loops (In our case it is sharing of content)
• Paid Ads

Organic

The aim here is to rank well in search engine results. Sticking to the core value proposition and messaging derived from it. We will focus on ranking on the type of content which is reddit-esque.

The only way to create and populate reddit with any type of content is through its subreddits. We will take the following steps to set up the experiment -

• Select a few subreddits based on our ICPs
• Create daily reddit posts with varying intents - some informational, some prompting discussion in the comments others purely content consumption
• Track the funnel: with top being - page link impressions on search engine and bottom being - activated users
• Activated Users - Those who create an account and do another interaction with the platform within 3 days

We will focus on the implementation details in the Organic Search Section

Content Loops

With content loops we want to drive the traffic to our platform by creating a pull using existing users. Again going via the subreddit route, we will run experiments across two dimensions:

• Type of content - What is the type of content which is being shared the most?
• UI/UX - Does tweaking the UI affect share rates?

The design of experiment will comprise of the following steps:

• Select a few subreddits based on our ICPs
• Create competing versions of UI with minor tweaks in each
• Create cohorts where each version of the UI is deployed
• Create daily reddit posts with varying intents - some informational, some prompting discussion in the comments others purely content consumption
• Track the funnel: with top being - post impressions to share rate and bottom being - activated users
• Activated Users - Those who create an account and do another interaction with the platform within 3 days

We will focus on the implementation details in the Content Loops Section

Paid Ads

It is crucial to stay true to the brand messaging and core value proposition while doing paid advertisement. In the history of reddit, it has done only a handful paid ads. That too it has rarely or never run digital advertisements. This messaging is drive the point that reddit is not out there to get users at any cost, they want the users to get a sense of accomplishment having done the work get the feeling of having discovered something unique for themselves.

So keeping in line with this, we will run bill-board campaigns. These campaigns will be run only in Tier 1 cities. The experimentations will be done on the following lines:

• Select a few bill board locations in a city
• Establish a baseline trend to user growth in the identified locations
• Analyze the user growth data to pick out added activity from the paid ads

We will focus on the implementation in the Paid Ads Section

Design of Experiment for Organic Search

First we list down the content strategy which will be decided based on the ICPs

Now we will analyze the performance of these posts in terms of funnel numbers

From the content performance we can conclude the following:

• Meme content leads to good bottom of the funnel conversions but the top of the funnel is small
• Discussion content has high top of the funnel numbers and a decent bottom of the funnel conversion
• Information and discussions is what people come for; Sports and Memes is what people stay for