According to the Zhitong Finance and Economics APP, Reddit (RDDT.US) announced its first acquisition since going public in March, targeting Memorable AI, an innovative company that uses generative artificial intelligence technology to help marketers create more attractive advertisements. Following the announcement, Loop Capital analyst Alan Gould upgraded Reddit to a &#34;buy&#34; rating and maintained a target price of $75. As of the time of writing, the stock rose 4.6% in pre-market trading to $63.65.
<h2>Memorable AI: Pioneer in Advertising Creativity Optimization</h2>
It is understood that Memorable AI focuses on developing technology to help advertisers identify the most effective text, images, and video content for use in their sponsored messages. Despite being established only three years ago, Memorable AI has quickly made a name for itself in the advertising technology industry, attracting widespread attention. Its success is attributed to the strong support of heavyweight figures in the advertising industry, including Michael Kassan, CEO of MediaLink, and Brian O'Kelley, former CEO of AppNexus and current CEO of Scope3. As early as 2022, Memorable AI successfully raised $2.75 million in funding, including valuable investments from Kassan and O'Kelley.
Since its official market launch in 2021, Memorable AI has built an impressive list of advertising clients, including well-known companies such as Unilever, Mars, Georgia-Pacific, and ExxonMobil. It is worth mentioning that these companies are also advertisers on Reddit.
Memorable AI's outstanding performance has even been recognized by industry authorities. Recently, the company was named one of the &#34;Cool Vendors&#34; in the 2024 Marketing Generative AI field by Gartner. Gartner analyst Mike Froggatt emphasized in an interview with AdExchanger that one of Memorable AI's major advantages is its significant cost savings for advertisers in creative testing.
Furthermore, Memorable AI is known for its ability to optimize advertising creativity, especially without consuming the advertiser's media budget. Sebastian Acevedo, co-founder and CEO of Memorable AI, pointed out that traditional creative testing methods could account for 20% to 50% of an advertising campaign's media budget. Therefore, helping advertisers save on this cost could become a potential differentiating advantage for Reddit's advertising business.
Gartner analyst Mike Froggatt mentioned that prior to being acquired by Reddit, Memorable AI was already an independent choice for advertisers, and as advertisers increasingly prefer to use platform-specific AI tools, Memorable AI's software provides advertisers with a way to test proprietary black-box optimization solutions within the platform
<h2>Reddit Acquires Memorable AI to Strengthen Advertising Technology</h2>
Reddit aims to significantly enhance the overall quality of advertising on its platform through this acquisition. Specifically, Reddit announced that it will provide Memorable AI's advanced technology to all Reddit advertisers. This initiative means that when advertisers set up ad campaigns on the Reddit platform, Memorable AI's software will provide creative feedback based on data analysis, covering key elements such as copy, images, and videos. By analyzing historical ad campaign data from the ad platform, demand-side platform (DSP), and ad server, this technology offers advertisers suggestions on how to adjust creatives to optimize their selected metrics.
Reddit emphasizes that they will prioritize enhancing creative optimization features for all available ad formats on the platform to meet the diverse needs of advertisers.
While this acquisition may be unfavorable news for some advertisers accustomed to using independent optimization tools, it is undoubtedly a positive step for Reddit. By integrating Memorable AI's technology, Reddit not only strengthens its platform's advertising service capabilities but also helps highlight its unique value proposition in the competitive market.
Jen Wong, Chief Operating Officer of Reddit, stated in a release, &#34;The addition of Memorable AI will accelerate our work in ad creative optimization, generation, and filtering, bringing better delivery results to advertisers.&#34;
Based in New York, Memorable AI has been using artificial intelligence technology since its establishment in 2021 to help marketing experts predict the likelihood of ads prompting users to take direct actions (such as downloading applications or visiting websites). With this acquisition, members of Memorable AI's team will integrate into Reddit's advertising department. Reddit has not disclosed specific financial details about this transaction.
In recent years, Reddit has significantly increased its investment in advertising business and artificial intelligence tools. Although Reddit launched its advertising services shortly after its establishment, it was not until 2018 that the company began substantial investments in ad technology. Since then, Reddit has continuously introduced new ad features, covering various areas such as shopping and video ads.
As a social media platform, about 98% of Reddit's revenue comes from advertising business, with sales reaching $804 million last year. Advertising on Reddit is found across various corners, including the homepage, various discussion boards (subreddits), and beneath user posts.
<h2>Reddit Deepens AI Collaboration and Strategic Acquisitions</h2>
Furthermore, Reddit has established partnerships with multiple artificial intelligence companies. It has signed data licensing agreements worth $203 million with companies like OpenAI and Google under Alphabet Inc., aiming to assist these companies in training their AI models. In May of this year, Reddit announced an agreement with OpenAI to integrate its content into ChatGPT, while adding new AI features to Reddit's forums
Reddit continues to demonstrate its precise layout of acquisition strategy on its path to strengthen its advertising service capabilities. Following the acquisition of Memorable AI, Reddit's series of acquisitions in 2022 further highlights its commitment to enhancing its advertising business.
In September 2022, Reddit brought the machine learning experimental infrastructure platform Spell under its wing, followed by the inclusion of text analysis and semantic processing software MeaningCloud in July of the same year. Shortly after in the same month, Reddit also acquired the audience and context insights platform Spiketrap.
Regarding these actions, Reddit revealed to AdExchanger that from Memorable AI to these early acquisitions, each step is highly consistent with its core goal: by integrating advanced technology, providing comprehensive support to advertisers, enabling them to achieve success more easily at every stage from ad creation to delivery on the Reddit platform.
This series of acquisitions not only enriches Reddit's technological reserves but also provides its advertisers with a range of tools from creative generation, text analysis, semantic understanding to audience insights, offering more comprehensive and efficient solutions in the competitive digital advertising market. Through these strategic integrations, Reddit is gradually building a more powerful and competitive advertising service platform

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Reddit announced its first acquisition since going public in March, targeting Memorable AI

Reddit plans to acquire Memorable AI to improve ad quality, rising nearly 5% pre-market