Reddit has announced the acquisition of Memorable AI, a generative AI startup specializing in enhancing ad effectiveness, marking its first acquisition since its IPO in March.
Memorable AI, founded in 2021 and based in New York, has developed technology to assist advertisers in identifying the most impactful text, images, and videos for their campaigns. This acquisition is part of Reddit’s strategy to boost the quality and performance of its advertising offerings.
Jen Wong, Reddit’s Chief Operating Officer, commented, “This acquisition enables us to advance our efforts in optimizing, generating, and selecting ad creatives, ultimately delivering superior results for advertisers.”
Memorable AI employs AI to forecast the likelihood of ads prompting direct actions, such as app downloads or website visits. The startup’s team will integrate into Reddit’s advertising division. Financial details of the deal were not disclosed.
Reddit, which generates approximately 98% of its revenue from ads, reported $804 million in sales last year. The platform has been investing heavily in advertising and AI technologies. While Reddit began offering ads nearly two decades ago, it significantly ramped up its investment in ad tech starting in 2018, adding various features like shopping and video ads.
In addition to this acquisition, Reddit has established data licensing agreements worth $203 million with companies including OpenAI and Google’s Alphabet to aid in AI model training. The platform also struck a deal with OpenAI in May to integrate its content with ChatGPT and enhance its AI-driven features.
Previous AI-related acquisitions by Reddit include Spell, MeaningCloud, and Spiketrap, which have contributed to improved content recommendations and advertising capabilities.
