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Reddit today announced the acquisition of an audience intelligence and contextualization company called spike trap. The terms of the deal have not been disclosed.
With over 100,000 active communities and a wide range of conversations, Reddit has become a popular destination for advertising. The company has been working on ways to help businesses reach relevant and interested audiences, and now, as part of the same effort, it is bringing Spiketrap’s technology and people under its umbrella.
What does Spiketrap do?
Spiketrap was founded in 2016 and is headquartered in California. It offers brands in the media and games industry the opportunity to use tailor-made audience information and media tools.
In the former, the company uses artificial intelligence (AI) to extract useful signals from a wealth of unstructured datasets and deliver audience insights, social media insights, competitive intelligence and impact measurement to advertisers. It gives audiences unparalleled clarity and context, especially in fast-paced online environments, the company says.
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Meanwhile, the media tools serve as the follow-up offering, allowing companies to act on that clarity and context to drive better engagement.
Spiketrap has not shared the names of the clients it has worked with, but the company claims to have seen significant demand in its target sectors. It has also raised seed capital from multiple investors in 2020, including Susa, 645, Pathbreaker, and Anorak.
How This Is A Great Deal For Reddit
With this deal, Reddit hopes to bring the contextual analytics and engagement tools from Spiketrap, and the team behind it, into its advertising business. As the company explains, the move will increase the ability to target users with ads based on their conversations and interests on the platform, while also improving ad quality score and prediction models for autobidding engagement.
This will ultimately improve ad relevance and performance on Reddit, leading to a higher return on investment and improved solutions for ad brands.
“We give advertisers the necessary tools to engage with relevant audiences and communities on Reddit. Spiketrap’s Superior Contextual NLP/ML [natural language processing/machine learning] technology is a great fit for our platform as we move into the next phase of our ad product strategy and expand our offering to advertisers,” a Reddit spokesperson told VentureBeat. Spiketrap’s team has already joined Reddit and will soon begin supporting and leading projects in the advertising business, the company noted.
Previous Steps for Reddit’s Advertising Business
While the decision to acquire Spiketrap makes sense for Reddit, this isn’t the first time the company has made an acquisition to boost its advertising capabilities and drive better engagement. Previously, it had acquired Spell, a SaaS-based (software-as-a-service) AI platform, to identify and classify the contextual relevance of conversations and customize ad placements. Another notable acquisition was that of NLP company MeaningCloud.
“We believe that targeting relevant audiences based on interests and with the context of the conversations they have will help advertisers reach the right people in the most efficient ways,” said Shariq Rizvi, Reddit EVP of monetization with advertisements. “We have been actively investing in solutions for this for some time now and this acquisition will complete and take Reddit’s capabilities to the next level.”
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