REDDIT CASE

STUDY
Desk Research Assignment

Group 1

Ashutosh Singh MBA20C07

Deepak Kalsaria MBA20C13

MBA 3 Navnit Kumar Pandey MBA20C27

Mirza Ibrar Ahmed MBA20C67
Table of Contents
Introduction.................................................................................................................................................3
History and Leadership................................................................................................................................3
Reddit's Industry..........................................................................................................................................3
Objectives....................................................................................................................................................3
Reddit Users and Usage...............................................................................................................................3
How Reddit Works.......................................................................................................................................5
Reddit Concepts (How Reddit is different)..............................................................................................5
SWOT Analysis.............................................................................................................................................6
1. Strengths.........................................................................................................................................6
2. Weakness........................................................................................................................................6
3. Opportunities..................................................................................................................................6
4. Threats.............................................................................................................................................7
PESTEL Analysis...........................................................................................................................................7
1. Political............................................................................................................................................7
2. Economic.........................................................................................................................................7
3. Social...............................................................................................................................................7
4. Technological...................................................................................................................................8
5. Environmental.................................................................................................................................8
6. Legal................................................................................................................................................8
Marketing Mix.............................................................................................................................................8
1. Product Strategy..............................................................................................................................8
2. Pricing Strategy................................................................................................................................8
3. Place................................................................................................................................................9
4. Promotion........................................................................................................................................9
Financials.....................................................................................................................................................9
Reddit Revenue Model................................................................................................................................9
Advertisement.........................................................................................................................................9
Premium Membership...........................................................................................................................10
Reddit Coins...........................................................................................................................................10
Reddit Gifts............................................................................................................................................10
Competitors Analysis.................................................................................................................................11

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Desk Research Assignment
Introduction
Reddit Inc. is a platform for social media that lets in users to build online communities, share
ideas, photographs and videos, post the modern day developments and breaking news, and vote
on different users’ posted content. It is built round the submission of links, photos, and text with
the aid of users, which everybody can then vote on. The fantastic content material rises to the
top, while content that is voted down turns into much less apparent.
Reddit is home to lots of communities, limitless conversation, and true human connection. It is
the sixth most famous web site in the United States, in accordance to Alexa, and the 18th
worldwide.

History and Leadership

The San Francisco, California-based company was founded in 2005 by two young entrepreneurs
Steve Huffman and Alexis Ohanian. The two had been college roommates and developed co.
soon after graduating from the University of Virginia. Reddit used to be subsidiary of Condé
Nast Publications in 2006 and used to be for this reason spun off into an independent
organisation in 2011. Huffman is Reddit’s modern day CEO and serves as one of the company’s
board members. Ohanian stepped down as a board member in June 2020, and requested that he
be modified by using a Black candidate. Reddit as a result announced Y Combinator CEO
Michael Seibel as Ohanian’s replacement.

Reddit's Industry
Reddit is a social media website that offers users with a network of communities the place users
post information stories, images, videos, and links. A user’s standing inside these communities is
determined by means of the content they share and its contrast by means of other users. Reddit
also is properly recognized for its on-line discussion forums on politics, entertainment, and
different topics.

Objectives
 Understanding Reddit, its user base, and internal and external factors influencing it.
 Understanding Reddit’s financial and user growths as compared to its competitors to
figure out its future.

Reddit Users and Usage

The very first aspect we need to be aware of is the variety of Reddit users round the world.
According to the company’s figures released at the end of 2019, there are about 430 million
monthly Reddit users global. Reddit’s global popularity as a social media platform, however, is
plenty lower. Reddit is the eleventh most-used social platform worldwide, just in the back of
Chinese social media networks Sina Weibo and Qzone. Its wide variety of energetic users
globally is simply a fraction of social media large Facebook’s wide variety of users, which boasts

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Desk Research Assignment
2.6 billion users worldwide, and nonetheless pales in contrast to different famous social networks
like YouTube and Instagram, both of which have extra than one billion users.

Regional Distribution of Traffic

others
27%

USA
50%
Germany
3%
Australia
4%
UK
8%
Canada
8%

Reddit facts show that just over 1/2 (50.78 percent) of its laptop traffic originates from the US, a
clear sign of its reputation there. From posting and commenting to upvoting and certainly
reading, there’s so much Reddit customers can do on the site that it’s no longer unheard of to
spend up to hours on give up browsing Reddit. On average, however, Reddit users spend 10
minutes and 23 seconds on the site. During this time, the common Reddit user visits just over
eight exceptional pages. According to the modern Reddit statistics, the website is the most
popular amongst users in the 25 to 29 age. As many as 23 percentage of US adults in this age
range use Reddit. This is observed by way of 21 percent for the 18 to 24 range, which suggests
that Reddit is really greater popular amongst younger adults. From this factor on, utilization
starts to minimize with age.

According to the state-of-the-art Reddit statistics, there are currently greater than 130,000 lively
communities on the platform. With greater activity, views, and engagements, these lively
communities may also seem to be like a correct region to do some marketing in.
Research indicates that Reddit users are most active in the mornings. When posting on a
Monday, attempt to do so between 6 am and eight am. The first-class hours to publish on
weekends are pushed again a little as Reddit customers trap up on sleep. The best time to post on
Reddit on Saturday is between 7 am and 9 am and from 8 am to noon on Sundays. An evaluation
of 30,000 top posts in the top subreddit indicates that the great performing Reddit posts have

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Desk Research Assignment
titles that are beneath one hundred twenty characters (Foundation, 2019). More specifically, titles
of between 60 and 80 characters function the first-rate and get hold of the very best quantity of
upvotes.

How Reddit Works

Reddit is a big site, but it’s divided into hundreds of smaller communities called subreddits, and
can be created with the aid of any user around any subject. Each of which covers a distinctive
topic. A subreddit is certainly a board devoted to a precise topic. The title of a subreddit begins
with /r/, which is part of the URL that Reddit uses. In most cases, subreddits have their personal
themes, rules, and expectations. Reddit is notoriously strict on matters like this to keep
subreddits on subject and to quit spammers. It is a social platform the place users put up posts
that different customers ‘upvote’ or ‘downvote’ based totally
on if they like it. If a publish gets a lot of upvotes it moves up
the Reddit rankings so that more people can see it. If it gets
downvotes it rapidly falls and disappears from most people’s
view. In the easiest of terms, it’s a large forum made up of
plenty of smaller forums. One of the massive pulls for Reddit
is that it’s effortless to be anonymous. One doesn’t have to
provide a lot more than an email and a username.

Reddit Concepts (How Reddit is different)

- Karma: It’s a type of gamification questioning – each and
every client has a karma score. This surely gauges the
excellent of a user’s remarks and submissions to the internet
web page based totally definitely on the downvoting and
upvoting described earlier. If your remarks and submissions
get masses of upvotes, your karma goes up. If they get a lot
of downvotes it goes down. There’s no actual charge to this.
User don’t get prizes or anything tangible. It in particular
plenty just signposts to others that character is a genuine
person of the site

- Reddit gold: Reddit gold is a top rate membership choice that affords more benefits to users.
This includes turning off ads, capability to create subreddits
only for users with gold membership, and the introduction of
customized avatars. Nothing fundamental for the usage of
the site, clearly perks. A necessary element of this is the
capability to gift gold to different users. This has end up a
common way to exhibit how a lot you like something any
one has posted. A person can present gold for any reason.

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Desk Research Assignment
- User profiles: Although consumer can continue to be anonymous, Reddit can though
preserve a tune of user’s exercise on the site. This will include a checklist of submissions,
comments, and a tally of karma. It additionally shows how a precise deal Reddit gold client
have bought, trophy case of achievements, and the subreddits patron moderate. They’re
presently rolling out new profiles which permit customers to pick out a picture, consist of a
bio, and write posts to their page.

SWOT Analysis
1. Strengths
- The front web page of the web “
- most modern-day things on the Internet.
- Diverse and Huge user base.
- Content is run by way of the users, if user like it, It’s upvoted to the pinnacle for easy
reading and access, if it’s bad, ancient or a repost it receives sent to the bottom out of site.
- User are given Karma (internet points that lamentably do not have currency) for every
upvote they receive and vice versa. This leads to users only seeing beneficial remarks that
contribute to the discussion.
- Quick load times which make it best for being everyone’s homepage.
- Something (or Subreddits) for everyone.
- Most customers can see right thru lies or untruths that are posted
2. Weakness
- Some important information receives brushed aside because the link title isn’t fascinating
sufficient
- Reddit can often have given small internet site the “Reddit -Hug-Of-Death” from so a lot
attention inflicting the server to crash due to huge traffic load and unable to be accessed
for a duration of time.
- Not for people who get effortlessly offended
- Not each and every subreddit is monitored thoroughly
3. Opportunities
- Diversify Portfolio
- With increased, easily on hand customization option, Reddit has the chances to turn out
to be the world domestic page.

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Desk Research Assignment
 - Exploit Changes in Advertising Trends
- Expansion thru New Acquisitions
- Target Different Audience
- Increasing Integration to different Applications
- Expansion of Existing Platforms
4. Threats
- With extended center of attention on ‘finding the truth’ (Karma court etc.) may want to
lead to the perceptions that what Reddit users believes, is truth. Situations like this have
already brought about humans to be wrongfully arrested.
- A better-looking website could take what Reddit has created and bigger.
- New censorship legal guidelines that can ruin the freedom that Reddit has grown.

PESTEL Analysis
1. Political
Political elements play a widespread position in figuring out the factors that can have an impact
on Reddit Inc.’s long term profitability. These are some political elements influencing Reddit
- Political stability and importance of Internet Information Providers sector in the country’s
economy.
- Bureaucracy and interference in Internet Information Providers industry by government.
- Legal framework for contract enforcement
- Intellectual property protection
- Trade regulations & tariffs related to Technology
- Anti-trust laws related to Internet Information Providers
- Pricing regulations – Are there any pricing regulatory mechanism for Technology
- Taxation – tax rates and incentives
- Work week regulations in Internet Information Providers
2. Economic
The Macro surroundings elements such as – inflation rate, financial savings rate, hobby rate,
overseas alternate rate and monetary cycle determine the combination demand and combination
funding in an economy. While micro environment elements such as competition norms influence
the competitive gain of the firm.
- Type of monetary machine in international locations of operation – what type of
economic gadget there is and how secure it is.
- Government intervention in the free market and associated Technology
- Efficiency of financial markets – Does Reddit, Inc. desires to elevate capital in
neighborhood market?
- Infrastructure exceptional in Internet Information Providers industry
- Labor charges and productivity in the economy
- Economic boom rate, Discretionary income
- Unemployment rate, Inflation rate, Interest rates

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Desk Research Assignment
 3. Social
Society’s way of life and way of doing matters influence the way of life of an company in an
environment. Shared beliefs and attitudes of the populace play a splendid position in how
marketers at Reddit, Inc. will understand the customers of a given market and how they design
the marketing message for Internet Information Providers industry consumers.
- Demographics and talent degree of the population
- Class structure, hierarchy and power structure in the society.
- Education degree as properly as schooling popular in the Reddit, Inc. ’s industry
- Entrepreneurial spirit and broader nature of the society. Some societies motivate
entrepreneurship while some don’t.
4. Technological
Technology is fast disrupting more than a few industries throughout the board. Over the last 5
years the enterprise has been remodeling definitely fast, now not even giving chance to the
mounted players to cope with the changes. A firm no longer solely does technological evaluation
of the enterprise but additionally the velocity at which science disrupts that industry.
- Recent technological tendencies by Reddit, Inc. competitors
- Technologies have an impact on product offering
- Impact on value shape in Internet Information Providers industry
5. Environmental
Different markets have unique norms or environmental standards which can have an impact on
the profitability of an organization in those markets. Even inside a united state frequently states
can have special environmental laws and liability laws. For example, in United States – Texas
and Florida have special liability clauses in case of mishaps or environmental disaster.
6. Legal
Different markets have one of a kind norms or environmental requirements which can have an
impact on the profitability of an organization in these markets. Even states can have
extraordinary environmental laws and liability laws. For example, in United States – Texas and
Florida have exceptional liability clauses in case of mishaps or environmental disaster. Similarly,
a lot of European nations provide wholesome tax breaks to corporations that function in the
renewable sector.

Marketing Mix
1. Product Strategy
Reddit is one of the most famous social media platforms which is now on hand via internet web
site and app. The product being Reddit itself. It adorns customers with a supremely fantastic
user-interface. The product approach in its advertising combine allows customers to share their
views via on line posts. It is cross-cultural platform where people can share their thoughts, news,
thoughts and the whole lot extraordinary aspect that a consumer desires to share. The Explore tab
on Reddit approves customers to witness popular media inclusive of movies and snap shots

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Desk Research Assignment
which is trending, customized with the aid of skill of an algorithm which caters to the looking
preferences of a user.
2. Pricing Strategy
Much like different social media, Reddit as a service if free of cost. The software accessible for
Android and iOS is free for download. Majority of the income that Reddit earns is via its
industrial services. Hence, advert income is the backbone of the pricing approach in its
advertising mix. Reddit makes cash by way of way of advertising advertisements and pinnacle
class membership plans
3. Place
Much like extraordinary social media, Reddit as a issuer if free of cost. The software application
available for Android and iOS is free for download. Majority of the revenue that Reddit earns is
by using its industrial services. Hence, advert profits is the backbone of the pricing strategy in its
marketing mix. Reddit makes money thru way of way of advertising commercials and pinnacle
class membership plans
4. Promotion
Reddit depends heavily on word-of-mouth ads, which is called viral marketing. As for most
social media, the easier it is for both users and the Reddit service, the more users sign up for the
Reddit. Reddit also depends on Direct Marketing to a certain degree. Reddit recommends
promotional templates and options directly to corporations and independent users trying to
support their projects.

Financials
Reddit used to be valued at $3 billion in its today’s spherical of funding that took vicinity in
February 2019. The enterprise raised $300 million, led by means of a $150 million funding from
Tencent Holding Ltd. (TCEHY). Other investors protected Sequoia Capital, Fidelity, Tacit
Capital, and Snoop Dogg. Reddit has raised $550.1 million in complete funding to date.
The company boasts 430 million plus average monthly energetic customers and extra than 30
billion common display views per month on its website. As at the end of March 2019 the
organisation was once on pace to submit $119 million in U.S. ad revenues for the 12 months and
double revenues by using 2021, according to a forecast by means of e Marketer. Following
Reddit’s state-of-the-art spherical of funding, CNBC estimated that the organisation was pulling
in an common revenue per user (ARPU) of approximately $0.30, some distance less than
Reddit’s ARPU of $9.48 and Facebook’s $7.37 at the time.
Reddit raised $50 million in a funding round led through Sam Altman and which include
investors Marc Andreessen, Peter Thiel, Ron Conway, Snoop Dogg, and Jared Leto. Their
investment valued the business enterprise at $500 million then. In July 2017, Reddit raised $200
million for a $1.8 billion valuation, with Advance Publications ultimate the majority stakeholder.
In February 2019, a $300 million funding spherical led by Tencent introduced the company’s
valuation to $3 billion.

Reddit Revenue Model

Reddit also makes money from advertising, much as most social networking platforms. But
unlike them, Reddit's sales model includes a lot of outlets.
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Advertisement
Reddit is a wide-open forum. As a supported connection, they make their ad appear on the front
page or on particular subreddits as a goal. The rate typically begins at $5 and $0.75 per thousand
page views, and depending on the amount of page views, the threshold value will go up to
$20,000. The higher the number of page visits, the greater the number. Through serving third
party ads on its sidebar, Reddit still makes cash. Reddit created more than $100 million in sales
in 2019 from advertisements, according to eMarketer.
Premium Membership
Reddit has a remarkably profit-producing premium membership option that was said to enhance
the "Reddit experience" of the customer by including certain additional functionality, such as
- Experience on Reddit free of advertising
- The Weekly Coins (virtual good you can use to award exemplary posts or comments)
- Premium access only to subreddit-/r/loungee
- On your profile tab, Premium Badge.
A monthly refill of coins, an in-platform currency used to award others and show gratitude, is the
greatest value of premium membership.
Reddit Coins
But with Reddit's Premium Membership, you get 700 coins per month, there is also an
opportunity to buy awards without being a premium member. Much like the old Reddit Money,
you can use these coins to award a Silver Award (worth $0.4), a Gold Award (worth $1.99), or a
Platinum Award (worth $5.99) to users who have made a positive post or message.
Without even paying for it, those honors make the winners enjoy Reddit Premium.
Reddit Gifts
Started in 2009 as the world's biggest Secret Santa scheme, Reddit Gifts is an online gift
exchange experience where total strangers, randomly paired by Reddit, exchange gifts with each
other on a marked day with Reddit accounts as their only popular element. Reddit doesn't charge
users for anything. Registration is totally free.
Registering for the gift exchange is absolutely easy. However, Redditgifts is also a freemium
operation, much as the parent website, which provides Reddit Gifts customers with a paid
membership. The premium, or as they say on the website, is named Redditgifts Elves by the elite
participants. Membership ranges from ~$3 a month

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 Competitor Analysis
60,000 3,000

50,000 2,500

40,000 2,000

30,000 1,500

20,000 1,000

10,000 500

- 0
Facebook Linkedin Quora Snapchat Reddit Twitter Pintrest Instagram

Competitors Analysis
Twitter takes the cake for first-class social media platform due to the fact of it is diverse,
engaging, interesting and everything. Reddit surpasses Facebook to become the 3rd most visited
website online in the US. On Reddit one can barely discover human beings using their names
because they prefer their work and their creativity to communicate for themselves and they
prefer staying in the back of their pc developing hours of informative, humorous content for
masses. Quora is an fantastically state-of-the-art platform with the whole thing being served to
you on the plat. Hence it is convenient for a novice to get brought to Quora world besides much
ado whereas Reddit requires a lot of efforts and grasp the complete technique of Reddit,
Subreddit, Mods, Rules, Karma point, etc. Facebook is a social media that pursuits to connect
people. Reddit needs its customers to react to the posts firstly. Facebook’s distant, high-handed
approach, Reddit has maintained a close and comparatively to blame relationship with its users.
Reddit is way better than Instagram for informal discussion, memes, fun, stupid around and
weirdly, amazing for science associated questions.

Reddit Images

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Desk Research Assignment (in millions)