Reddit tests search ads as Google's AI answers drain its traffic

Felix Laurent 5 Nov 2026 3 min read

Big tech

Reddit started testing ads in its own search results on November 3, 2026. The test came five days after the company warned investors that traffic from Google was falling. Reddit blames the drop on Google's AI answers, which keep people on the search page.

The ads are a way to earn more from the users Reddit already has. It is also planning to require accounts to read the site, starting with tests outside the US.

How Reddit search ads work

The new placements show up on Reddit's search results pages. Reddit said the ads may appear "based on a range of factors, including contextual relevance to a user's search query," TechCrunch reported.

Reddit gave two examples. A search for "espresso station" might show ads for espresso machines, coffee or mugs. A search for "home office setup" could surface monitors, desks and office chairs.

For now, the test is limited to a select group of eligible advertisers. Reddit says it will study how users react and refine the ads over time.

Searches like these are where buyers ask for real recommendations. That is valuable to advertisers, and it is the kind of traffic Reddit is now losing from Google.

Why Reddit is losing Google traffic

Reddit reported its third-quarter results on October 29. The business itself grew fast, according to its SEC filing:

Reddit, Q3 2026	Value	Change, year over year
Revenue	$895 million	+53%
Ad revenue	$847 million	+54%
Other revenue, mostly data licensing	$48 million	+35%
Daily active users, global	130.3 million	+12%
Daily active users, US	50.7 million	−2%

The US number is the problem. Analysts had expected 53.5 million US daily users, CNBC reported. Reddit guided fourth-quarter revenue to $1 billion to $1.03 billion, below Wall Street's estimate of about $1.05 billion. The shares fell more than 15% after the report.

CEO Steve Huffman said search referral traffic was "down meaningfully in this quarter" and would keep falling in the fourth quarter. He tied it to Google's "shift to AI mode and AI overviews" in search. He called it "a fundamental shift in how the Google product works, from being a traffic driver to whatever's going on now."

The drop is sharpest among people who never log in. In the US, logged-out daily users fell 4% year over year to 27.3 million, while logged-in users grew 1%. That split explains Reddit's next move.

Why Reddit wants every reader logged in

Reddit plans to require accounts to see its content. It will begin testing in the fourth quarter in markets outside the US, and it has not set a date for the full change. "Reddit is the last platform to provide basically unfettered logged-out access," Huffman told analysts, according to CNBC.

Logged-in users are worth more. Huffman said "the vast majority of our revenue" comes from app users and logged-in users. They give advertisers more signals about interests, which makes ads better targeted. A login wall also makes it harder for AI companies to scrape the site without paying.

That matters because Reddit sells its data to AI firms. OpenAI and Google are its two biggest licensing partners, and Huffman said Reddit is still "in negotiations" with Google. In other words, Google's AI answers cut Reddit's traffic while Google also pays for Reddit's posts.

Can search ads make up for lost Google traffic

Only partly. Ads in search earn more from each visitor, and Reddit already makes a lot per US user: $13.82 in the third quarter, up 53%. But they cannot bring back the people who now get their answer from Google and never click through.

The bigger bet is the login wall. If it turns casual readers into account holders, search ads become more valuable, because Reddit knows more about who is searching. If readers leave instead, Reddit will have fewer people to show ads to. Reddit already warned of a low double-digit drop in daily users for the fourth quarter, and that could get worse.