On November 3, 2026, Reddit announced that it will begin testing ads on its on-site search results pages. For now, the test is limited to select advertisers. Just five days earlier, in its earnings report, the company had warned that traffic from Google Search fell by more than 1 million visits per week on average in October. It also said that if the trend continues, daily active users in the October–December quarter could drop by a low-double-digit percentage from the July–September quarter. The new search ads appear to be aimed less at winning back lost visitors than at increasing ad revenue from existing users. Behind this is Reddit's revenue structure: logged-out web users, who are the most affected by declining search traffic, account for less than 20% of overall monetization.
Testing ads on search results pages with select advertisers
According to Reddit's official announcement, the new ads will appear on the site's search results pages and will be selected based on factors such as relevance to the search query. The mechanism applies Reddit's existing ad targeting features to search results pages. For example, a search for "espresso station" might show ads for espresso machines, coffee beans and mugs, while a search for "home office setup" might show ads for monitors, desks and office chairs. Reddit explains that search results pages tend to reflect users' clear search intent and purchase intent.
The test is limited to eligible advertisers selected by Reddit. The company says it will analyze user reactions and adjust how the ads are displayed. However, it has not disclosed details such as how often the ads will appear, which regions are included, how many advertisers are taking part, or whether logged-out users will also see the ads. The official announcement also makes no mention of the decline in Google Search traffic, and with the test at an early stage and limited in scale, its contribution to revenue is likely to be small.
Google traffic is falling, but revenue centers on logged-in and app users
Specific figures on the traffic decline appear in Reddit's Q3 2026 shareholder letter, published on October 29. Search-driven traffic fell sharply in the July–September quarter, and the pace accelerated in the latter part of the quarter. The impact was greatest among logged-out web users, with search-driven visits falling by more than 1 million per week on average in October. CEO Steve Huffman said on the earnings call that he believes the expansion of Google's AI Overviews and AI Mode is the main cause.
How much, then, do the users affected by falling search traffic contribute to Reddit's revenue?
In July–September 2026, Reddit had 76.8 million logged-out daily active users, or 58.9% of the total 130.3 million. Yet the company says logged-in and app users account for more than 80% of monetization. That said, login status and app usage are not independent categories, since some people use the app without logging in, so user counts and revenue shares cannot be compared directly. What matters is that web users who are neither logged in nor using the app contribute less than 20% of monetization. The number of daily users in this group alone has not been disclosed.
In fact, Reddit's results have been supported not only by user growth but also by rising revenue per user. U.S. daily active users fell 2% year over year to 50.7 million, but average revenue per user (ARPU) rose 53%, from $9.04 a year earlier to $13.82. Revenue for the July–September quarter was $895 million, of which advertising revenue reached $847 million. The company attributes the growth in ad revenue to increases in both ad prices and ad impressions. In other words, even as user numbers decline, it is growing sales by raising revenue per user.
Looking more closely at U.S. users, logged-out users fell 4% year over year to 27.3 million, while logged-in users rose 1% to 23.4 million. Globally, however, logged-out users grew 17%, so the decline is in the U.S. logged-out segment. Reddit also acknowledges that the drop in search traffic has partly affected logged-in and app users. Global ARPU was $6.87, up 36% year over year.
Given this revenue structure, introducing ads on search results pages looks like a way to further raise the profitability of existing users. Users who come to Reddit from Google Search typically land directly on an individual post page shown in the search results. The new ads, by contrast, will be added to search results pages inside Reddit, which is a different ad placement. Even if inbound traffic from outside declines, Reddit can show new ads to people who search within the platform.
The revenue structure outside the U.S. is also worth noting. ARPU outside the U.S. is $2.43, roughly one-fifth of the U.S. figure of $13.82. Of the 79.6 million daily users outside the U.S., 49.5 million, or 62.2%, are logged out. Reddit has said that in the October–December quarter it plans to test, in some markets outside the U.S., an experience that generally requires users to log in. It is currently unclear whether Japan is among the target markets.
Will search ads also be used to monetize logged-out users?
The biggest uncertainty in viewing the search ads as a way to boost revenue from existing users is whether ads will be shown to logged-out users. If logged-out users do see search ads, they could also become a way to earn ad revenue from people arriving via external search engines such as Google, which would change how the initiative should be understood. On the earnings call, Huffman said that how much content to show users before they log in will be decided through future tests, but he did not address how search ads would be handled.
TechCrunch likewise reported the test as a move to expand revenue from existing users against the backdrop of declining search traffic and the October–December revenue outlook. However, Reddit itself has not explained any link between search ads and the traffic decline, so it cannot be said that the initiative was introduced as a countermeasure.
The company's guidance also hints at the need to grow revenue. Reddit's October–December revenue forecast is $1.00 billion to $1.03 billion. The midpoint of $1.015 billion is about 13% above the $895 million of July–September. Compared with $725.6 million in the same period a year earlier, that implies growth of about 40%, but this is a slowdown from the 53% growth of July–September. It is unclear how much revenue from search ads is built into this outlook.
Still, there is a basis for viewing the ad rollout as a way to raise the profitability of logged-in and app users. In its shareholder letter, Reddit states that it positions logged-in and app users as its most valuable user segment and will keep prioritizing them in its growth strategy. It also cites, as a reason for moving toward a login-first approach, that it can gather more information about users' interests and behavior and improve the precision of ad targeting.
The key questions going forward are who will see the search ads and how much revenue they actually generate. If Reddit says it will show search ads to logged-out users, or explains in its October–December results how much ad revenue came from logged-out users, the view that this is a revenue-growth plan centered on logged-in and app users will need revising. If, on the other hand, it is confirmed that the ads mainly target logged-in and app users, the move can be seen as part of a strategy to offset falling inbound traffic from external search by raising revenue per user. However, ARPU is an average that includes logged-out users, so changes in it alone make it hard to judge the effect of search ads. Which user segments see the ads, and how much additional revenue they generate, will be central to evaluating this initiative.