Reddit is acquiring Memorable AI, a startup that uses generative artificial intelligence to help marketers create better ads. It’s its first acquisition since going public in March.
Memorable AI has developed technology that helps advertisers find the most effective copy, images and videos for their sponsored posts. Reddit hopes the acquisition will improve the quality of ads on its service.
“This acquisition enables Reddit to accelerate our work in optimizing, generating and selecting ad creative to deliver even better results for advertisers,” said Jen Wong, Reddit’s chief operating officer, in a statement.
Founded in 2021, New York-based Memorable AI uses AI to help marketers predict how often an ad will lead to a direct action, such as downloading an app or visiting a website. Memorable AI’s employees will join Reddit’s advertising team. Reddit did not disclose financial terms of the deal.
Reddit is investing heavily in both its advertising business and its artificial intelligence tools. The company first launched ads nearly two decades ago, shortly after Reddit was founded, but it wasn’t until 2018 that it began investing heavily in ad tech. Since then, the company has added a variety of new advertising features, including shopping and video ads.
The social media site gets about 98 percent of its revenue from advertising, and reported $804 million in revenue last year. Advertisements on Reddit appear in a variety of places, including the main home feed, within discussion forums called subreddits, and under user posts.
Reddit has also struck deals with artificial intelligence companies. It signed $203 million in data licensing agreements with companies like OpenAI and Alphabet’s Google to help train their AI models. In May, Reddit announced a pact with OpenAI that would bring its content to ChatGPT while also helping the social media company add new AI features to its forums.
Reddit previously acquired AI companies Spell, MeaningCloud and Spiketrap, startups that helped the social media site improve its content recommendations and ad serving.
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