Reddit’s AI love letter

John Ebbert

Reddit's AI love letter

On Thursday, Reddit reported strong performance for Q4 2025 thanks to its AI strategy which includes 1) licensing content to AI companies, 2) optimizing its site experience with large language models (LLMs), and 3) using AI for shopping ads and the beta of its automated ad platform, Reddit Max — a “key theme” says Reddit for 2026 and rolled out at CES last month.

Yahoo Finance reported that Reddit’s revenue and earnings beat expectations for the quarter. Read more. (February 5)

A snapshot of Reddit’s Q4 2025:

  • “Daily Active Uniques (“DAUq”) increased 19% year-over-year to 121.4 million.”
  • “Q4 Revenue grew 70% year-over-year to $726 million (with net income of $252 million). 2025 Revenue grew 69% to $2.2 billion (with net income of $530 million).”
  • “Advertising revenue of $690 million grew 75% year-over-year, and Other revenue was $36 million, up 8% year-over-year“ (“Other” includes licensing content to AI companies for their LLMs)

SMB budgets and upper funnel

On the earnings call with Wall Street analysts, a common theme about AI-enabled automated ad platforms surfaced — the enablement of the SMBs and their ad budgets.

Reddit COO Jen Wong reiterated her prepared remarks in an answer to an analyst’s question (lightly edited for clarity):

“I think Reddit Max will make onboarding easier [in that] it will drive productivity and performance gains. For folks coming into the lower funnel for the first time, [they’re getting] that in the benefits to creative and optimization. We think this will take out more friction and help us continue with our acquisition growth…”

Later in the call, Ms. Wong addressed upper funnel targeting and brand advertising:

“Reddit, Inc. delivers value for marketers from the top to the bottom of the funnel. And brand is absolutely a piece of that of full funnel solution — we’ve actually been investing in brand as well. And when I think about 2026, it’s an area we’ll continue investing in. So the first is around Reddit, Inc. unique experiences. So, I’ve mentioned the interactive ads that we started to test in Q4. I think there’s a nice road map there for high impact engagement, engaging ad units that are Reddit, Inc. unique. The second is, last year, we invested in video and deeper video views and video view optimization. And I think we’re going to go deeper on that.”

In short, Reddit wants to enable the full funnel in its ads offering.

Read:

  • Q4 2025 Shareholder Letter (February 5) – Reddit
  • Earnings call transcript (February 5) – Motley Fool
  • “Reddit Reports Fourth Quarter and Full Year 2025 Results; Announces $1 Billion Share Repurchase Program” – press release

Summary: Reddit Advertising Surges In Q4, Grows User Base (February 6) – MediaPost

Related: The battle between news publishers and AI bots is heating up (February 5) – The Trade Desk’s The Current

From tipsheet: Even though Reddit’s stock plummeted on Friday similar to many public, AI-related companies post-earnings, the company closed with a market cap of $26 billion — over twice the size of legacy media conglomerate Paramount Skydance.

LLMs & CHATBOTS

Developments

  • “Get faster Opus 4.6 responses in Claude Code by toggling fast mode.” (February 8) – Anthropic

  • Why a 175-Year-Old Glassmaker (Corning) Is Suddenly an AI Superstar (February 6) – The Wall Street Journal (subscription)

  • Goldman Sachs taps Anthropic’s Claude to automate accounting, compliance roles (February 6) – CNBC

TECH

Agents and AI on LiveRamp’s roadmap

Last Thursday, data collaboration platform LiveRamp reported $212 million in revenue (9% year-over-year growth) and beat expectations for its fiscal Q3 2026, according to investment research firm Susquehanna.

Read more on Investing[dot]com. (February 6)

On the earnings call, LiveRamp CEO Scott Howe shared his perspective on AI transformation in digital advertising and its potential positive effect on the company.

Though LiveRamp’s User Context Protocol (UCP) — which was donated to the IAB Tech Lab in November now called “Agentic Audiences” — wasn’t discussed explicitly, Howe said:

“AI agents will change how consumers discover products and make purchase decisions. Think about it this way. Instead of people browsing websites or searching across different platforms to find products, they’re going to ask an AI agent to find what they need. The agent does the research, makes the recommendation, and maybe even completes the purchase. This is a very different customer journey, and businesses will need to adapt.”

He saw three effects of AI agents:

  1. Marketers will want personalization: “brands must reach consumers with personalized messages across new destinations and new devices.”
  2. Tools will be needed in the agentic environment for “measurement, marketing analytics, creative optimization, even personalized product recommendations.”
  3. #1 and #2 will be fueled by data: “not just public information, but rather their own proprietary customer data, as well as permission signals from across their
    partner ecosystem.”

And #3 is where LiveRamp fits, according to Howe. LiveRamp aspires to be the “data spine” (my words) of agentic advertising.

Read:

  • LiveRamp Announces Results for Third Quarter FY26 (February 5) – LiveRamp
  • Q3 Fiscal Year 2026 earnings call transcript – LiveRamp (PDF)

Summary: LiveRamp’s Q4 Earnings Defy Wall Street’s SaaS Skeptics (February 6) – AdExchanger

From tipsheet: A few thoughts.. some connected to LiveRamp, some not.

  • The advertising industry getting a lot bigger (run rate-wise) across the open web, walled gardens, mobile apps, etcetera, thanks to AI and agentic protocol efforts. But, it might take a year or so to show the agentic protocol effects.
  • There will be increased transparency on what works — i.e. what communicates or connects best with the consumer — and what doesn’t. Marketers will spend more if they know their dollars are achieving their desired outcomes.
  • SaaS is being reprogrammed for agents and will appear in your favorite chatbot.
  • Perhaps agentic frameworks are best applied in a B2B setting initially (or always) versus B2C. For example, I can’t imagine letting an agent buy stuff for me. Therefore, the “agency of agents” might become a thing… agents have different levels of autonomy.

LiveRamp’s stock was up on Friday as the company closed with a $1.47 billion market cap.

BRANDS

The marketer’s two AI investments

On analyst Eric Seufert’s Mobile Dev Memo podcast, Fermat Commerce CEO Rishabh Jain returns to the show and discusses the rollout of OpenAI’s ChatGPT ads.

Jain’s quality of analysis on the topic of “AI and ads” meshes perfectly with Mr. Seufert’s expert observations, which always makes for a good show.

In this episode, Mr. Jain shares his bullish expectations for ads at OpenAI given what brand marketers have already said to him (lightly edited):

[38::25]

“I was at a conference recently and asked a head of marketing of a well-known brand, ‘What are your priorities for AI this year?’

He said, ‘It’s two things — and I’m going to take budget from other places to do it. First, how much am I showing up in AI interactions and what can I do to affect that. And second, testing and spending as much as I can on ChatGPT ads.’ (…)

This marketer was not some ‘special snowflake’ in his way of thinking. Everyone else understands where the puck is going. And so everybody’s budget to spend into this (ChatGPT ads) — especially this year — is going to be extremely large because marketers can’t afford to not understand.

The only constraint is ChatGPT’s ability to absorb that [budget]. But just like with Netflix, the problem became that we’re not able to absorb it.

And so the only problems [for OpenAI and ChatGPT] will be ability to onboard and ability to supply. And that will be the only problem. And those things are way harder than they sound.

So if they can get those things right, we’re going to wake up in a year… I mean, I’ll say something potentially too optimistic. I think we could wake up in a year [for OpenAI ad revenue of] a number closer to a $20 billion annual run rate.”

Listen on Apple Podcasts app. (February 3)

From tipsheet: So, AEO/GEO and ChatGPT ads are the big AI winner in ads in 2026, according to Jain’s sources. Point taken in the context of his question.

Of course, Google/YouTube, Amazon and Meta AI-enabled ads will carry away a lot more budget than the most robust OpenAI ads run rate prediction in 2026.

CAREERS

New ads role at OpenAI: Product Designer

A new role titled “Product Designer, Consumer Ads Experience” popped up on the OpenAI careers website over the weekend.

The description for the San Francisco-based job reads, in part:

“In this role: you will:

* Define the vision for what an AI-native advertising experience should be for millions of users.

* Design advertising formats and interactions that feel additive to the core ChatGPT experience—relevant, contextual, and thoughtfully integrated.

* Build a new set of advertising products from the ground up in a fast-moving, zero-to-one environment.

* Partner with product, engineering, research, and policy teams to define new ads surfaces, systems, and workflows from the ground up.

* Navigate complex tradeoffs between business needs, user trust, and long-term platform health.

* Create thoughtful artifacts that help align cross-functional teams and guide execution across both consumer and console experiences.

* Contribute to a design culture that values clarity, restraint, and responsibility as much as craft.”

Read more in OpenAI’s careers.

From tipsheet: Notably, this role is on The ChatGPT team, not the “Ads Integrity team” which was revealed in an engineering job last week.

So, there are at least two lanes for making ads at OpenAI: one appears more front end, the other is back end.

FINANCIALS

AI + ads companies reporting this week

Companies using AI in their advertising and marketing product suites will be providing investors their quarterly earnings reports this week including:

From tipsheet: AppLovin will continue to try and push through accusations by short sellers about the company’s financials when it reports this week.

Last Thursday, Yahoo Finance summarized recent news saying that “2026 has been brutal so far [for AppLovin], with shares down 43% year-to-date, well-underperforming the S&P 500’s less than 1% loss. This follows a stellar 2025 where AppLovin stock doubled on strong revenue growth.” Read more. (February 5)

Although the company’s stock price has swooned with the broader market’s recent downdraft, AppLovin’s market cap remains a robust $137 billion after moving higher on Friday.

GOVERNANCE

The 9 personas of AdCP governance

In a Substack post, “Meet The Personas Building the Cre(ai)tive Economy,” the strategic advisors to Ad Context Protocol governance organization, AgenticAdvertising[dot]org, revealed a bit more about membership plans for their growing org.

Matthew Egol and Randall Rothenberg wrote:

“We’ve grouped companies into nine personas. Five we consider “inner-core”; these are our primary focus in designing their member experiences with and value derived from AgenticAdvertising[dot]org. The four “outer-core” personas also are important for understanding the structure and dynamics of the evolving marketing function, but these companies are more likely to be followers than leaders. Our design challenge is to better serve the inner-core without losing the outer-core. This is doable because there are some interests that align across them. What is common across personas is important, not just what makes them distinctive.”

Read about the structure. (February 5)

Related: “This has been the week of ads about ads. So… this is an ad for AdCP that I trafficked on LinkedIn using only AdCP and ChatGPT. While sitting at a volleyball game.” (February 7) – Brian O’Kelley, CEO, Scope3 on LinkedIn

BRANDS

Agent-scape for marketing

On Saturday, Diageo’s Global Media Lead for Retail & Performance Media, Roger Dunn, said that the latest work of chiefmartec founder Scott Brinker is helping him create his agentic marketing strategy in 2026.

He explained on LinkedIn:

“Scott Brinker’s ‘3 Domains of AI Agents in Marketing’ cuts through the noise for retail and CPG teams trying to figure out where to invest.

Looking at this through a commerce lens, it clarifies exactly where the disruption is happening.

Reading the spectrum from left to right. That’s not just a taxonomy. It’s a map of where you’re losing control of the customer journey.”

Read more from Roger Dunn. (February 7)

And, get Brinker’s 2026 report from October here. (sign up required)

Related: “The word ‘agency’ is costing the ad giants” (February 6) – Digiday (subscription)

From tipsheet: Need more logos? Get an AI landscape map for media, marketing and ad tech from LUMA Partners’ AI LUMAascape here.

MORE

  • Podcast: “The Future of Video Ads: AI & Virtual Placements Transforming Engagement with Rembrand’s Cory Treffiletti” (February 4) – Data Planet on Apple Podcasts app
  • “Meta’s real AI advantage” – Maureen Kerr on Substack
  • Reach Selects DeeperDive From Taboola, Gen AI Answer Engine Built for the Open Web (February 5) – press release
  • “As Discovery Dies, So Does Perspective – AI answers are efficient. They’re also making us dumber.” (February 5) – Andrew Kraft on Substack
  • Building leaders in the age of AI (January 12) – McKinsey & Co.