To put the pricing post into the same context, we're talking $7.50 per Apollo user/quarter, which is closer to what Facebook makes per user than Pinterest.
That said, presumably 3rd party client users are especially active and would skew higher ARPU than the average Redditor, and it wouldn't surprise me if they were more likely to live in developed countries.
I dunno. I started running the numbers expecting to be outraged, but the cost doesn't seem crazy far from what Reddit could conceivably hope to earn off these users. I doubt Reddit is monetizing anywhere near that well right now, but if they're pricing the API in a forward-looking way, rather than planning to ratchet it up every quarter inline with monetization efforts, it could make sense.
0: https://www.statista.com/statistics/251328/facebooks-average...
1: https://www.statista.com/statistics/995251/pinterest-quarter...
Can someone explain this to me? Why is it so high? Even if every single person on Facebook buys a product because of ads once per year, doesn't that mean companies are paying $240 to acquire a customer in the US? Is it worth that?
My first though was that maybe 1% of users buy something in a given year, but that's $24k to acquire a customer and is so far from reality that my perspective must be way off.
The Apollo developer does however address this in his post and he claims that Reddit's ARPU is only $0.36/quarter. Reddit has likely been doubling down their efforts on Ad Targeting, etc and perhaps forecasts much higher.
Christian's reddit post only addresses ads though, but Reddit has been trying to diversify and create multiple products and revenue streams. They have gold for purchase and if I recall they were trying to launch some Clubhouse-esque product. Point is, it's hard to push any of these things if so many users are on 3rd party clients that don't support such features.
Also, online advertising can lead to in store sales. When you look at those dollars people spend a couple orders of magnitude more than $240 on stuff every year.
Anyone reading this can make their own Reddit-esque forum on a VPS and serve a few thousand people for a few bucks a month. And if Reddit ever kicks out all the polished app users/old.reddit users, you'll see that start happening a hell of a lot more
> Can someone explain this to me? Why is it so high? Even if every single person on Facebook buys a product because of ads once per year, doesn't that mean companies are paying $240 to acquire a customer in the US? Is it worth that?
1. I wouldn't be surprised if lots of businesses lose money on their Facebook ads, but either don't realize it or Facebook has enough churn that it doesn't matter if the quit (e.g. a revolving door of unsophisticated local businesses spending money on Facebook because it's the biggest game in town).
2. A lot of advertising is broad "brand awareness," and I imagine it's actually very hard to determine if it's actually working in many cases.
In consumer finance, CACs are even higher. For standard credit cards it’s around $200 but can be over $1000 for premium cards.
[1] https://www.fool.com/investing/2018/01/23/netflixs-83-millio... [2]https://www.unifimoney.com/blog/changing-the-vicious-cycle-o...
I dont know if anything will overtake Reddit for a very long time because of network effects. But discord is probably the best guess. Although I actually think people do want centralization. They want 1 login to 1 website that has everything.
For me, I don’t think that will be the case. I almost exclusively use Reddit on mobile though Apollo and Reddit’s own app is absolutely garbage (unpleasant to use and heating up my phone burning through the battery).
I used to pay for Reddit premium, but I stopped after realising that Reddit wasn’t providing me a better experience for it.
If I could just pay for the service without Google's malicious intents, then I would have no problem paying for YouTube Premium.
Same goes for Reddit and all the other bad actors.
Presumably that's why they haven't booted old.* users yet. They realize that a really substantial amount of their network effects and their moat stem from quality posts by people using computers.
Reddit is about to fuck around and find out, and unfortunately I think they're going to find out that people will just dump everything into even more annoyingly gated-off Discord communities
Of course the money is all being spaffed for nothing. It doesn’t take a degree in applied ecosystem analysis from Aberyswyth Technical College to figure out that Coke spending 50m on a christmas campaign doesn’t sell anymore Coke.