The media industry is moving into an era of “authentic advertising”, with brands needing to adopt a more “genuine” attitude, according to Reddit co-founder Alexis Ohanian.

In an exclusive interview with M&M Global, Ohanian – back at social content platform Reddit as executive chairman after five years away – said digital advertising has reached a moment where formats such as banner ads will be replaced with more “creative” alternatives.

Both traditional and new media outlets, he argued, must confront a landscape where the execution and tone of online ads are “not something that users want”, and a fresh approach is called for.

“I’m placing a big bet on this one – I think [the next big thing] is going to be authentic advertising,” says Ohanian, who is speaking at next month’s Festival of Media Global in Rome.

“We are at a point on the internet where I can tweet my favourite celebrity or talk to my favourite coffee company. What I am coming to expect, as a human, is authenticity.

“If Mr. T or somebody endorses a product everyone knows it is just BS because he got paid for it. If Facebook puts your face next to a Snickers bar or Coca-Cola, people know you don’t endorse it, they are just being cute with their algorithm. It doesn’t mean anything.

“There are companies that do extremely well, and the only reason is because they are actually authentic. When Newcastle [Brown Ale] runs an ad campaign saying, ‘This is just an ad,’ people love it, and I don’t think this is unique to Reddit.”

Open internet

Since founding Reddit with Steve Huffman in 2005, Ohanian has become as well known for his opposition to US online piracy legislation and advocacy of an “open internet” as his early entrepreneurial days. He has also stepped into the funding sphere with a senior role at start up-backer Y Combinator.

Acquired and subsequently spun off by Conde Nast in its first six years, Reddit has gone from strength to strength, becoming a top ten-visited site in the US with 170 million unique monthly users. Yet, in a rapidly-evolving industry, the platform has changed remarkably little in the past decade, with users still dictating what makes the ‘front page’.

Some change, however, beckons. Following an alleged dispute over office space, CEO Yishan Wong resigned last November, with deputy Ellen Pao taking over in an interim role and Ohanian stepping up from an ongoing consultative position to return to the top of the organisation.

Referencing Reddit’s traffic figures, Ohanian insists the site is more relevant than ever, but admits some innovation is required. “The most important thing this year is going to be mobile. That is one area where we haven’t done enough, that is the most glaring thing. We are going to be launching mobile web in the coming months, as well as some native apps before the Fall,” he says.

Reddit has also introduced podcasts to “broaden” its appeal to consumers looking for a “little more”, and is launching its first curated service in the form of a weekly newsletter, called ‘Upvoted’, packaging some of its most popular content. “We set the agenda and we want to offer people as many ways as possible to get access to this stuff,” says Ohanian.

Business models

Publishers have not always enjoyed the role Reddit and other social networks play in spreading content. Newsweek Europe’s editor-in-chief Richard Addis last month said he finds the prospect of publishers becoming little more than content creators for Facebook “quite scary”.

Ohanian recalls editors “cringing” in the early days at the very notion of a front page dictated by internet users’ tastes and habits, but believes the tide is turning. He counters with the example of a recent conversation with a US-based Newsweek journalist, who interacted with readers of a feature she had written, even providing them with a full interview transcript.

Enthused by the potential of native advertising, he says, publishers are now happy for users to consume their content on social networks “because that’s where people are, and realistically it’s not going to change any time soon”.

“For this generation coming up, publishers are conceding that people aren’t starting their morning coffee by visiting a newspaper website. It still happens, don’t get me wrong, but people tend to start their day now on Facebook or Twitter,” he says.

However, the decline in efficacy of online banner ads poses a challenge the industry must first surmount before enjoying the opportunities of new content channels – and Ohanian claims Reddit is trying to produce the tools to help publishers succeed.

“My hunch is that we’ve made so much progress online, in terms of how we deliver news, but most advertising is still pretty antiquated. Banner ads are not that different to the advertisements in newspapers 100 years ago,” he says.

“There’s better data on how many people are engaging with it and, frankly, I think just as few people engaged with those paper ads, but we didn’t have the data so we could lead ourselves into thinking it was worth it. I’m happy that, if nothing else, it is encouraging people to become more creative.

“I really hope we can do better than banner ads. We’re going to have to, because it’s getting harder and harder to justify those ads.”

Alexis Ohanian will be speaking at Festival of Media Global, which takes place on 10-12 May at the Rome Cavalieri