If you have been watching the stock market this week, you might have noticed Reddit took a stumble. Reddit stock fell about 6% on Thursday, January 15, 2026. While stock prices go up and down all the time, the reason behind this drop is what really matters for business owners and marketers.
News broke regarding a research note from RBC Capital Markets that painted a complicated picture for Reddit’s ad business. According to reports from Investing.com and Investors.com, the feedback from small and medium-sized business agencies was “mixed” and “challenging.”
But buried in that report is a massive insight for marketers. The analyst found that for many brands, the return on investment for building a presence manually (“by a person”) was actually viewed as higher than ad spend.
This is something we have seen firsthand at RedPulse. Paying for attention is getting harder. Earning it through real conversation is working better than ever.
The Struggle with Reddit Ads
Reddit knows that running ads on their platform can be tricky. Just recently, they announced a new tool called “Max Campaigns”. It is currently in beta.
The goal of Max Campaigns is to use AI to help advertisers find the right audience and lower costs. Reddit’s own press release says this system will “open the black box” of performance. They are trying to make it easier because standard Reddit ads have struggled to deliver results for smaller brands.
The RBC report noted that while Reddit ads have “inexpensive CPMs” (meaning they are cheap to run), that low cost often matches up with low conversion levels. Cheap ads usually get you cheap results.
While AI ad tools are useful, they fix a symptom rather than the root problem. The problem isn’t that the ad tools are too hard to use. The problem is that Redditors are smart. They know when they are being sold to, and they usually ignore it.
You don’t have to look far to see this sentiment in action. In a recent discussion about the stock drop, the community didn’t hold back.
One user noted that while they ignore ads on other platforms, Reddit ads often prompt a stronger reaction: “I at least take the time to downvote the post and move on.” Another simply asked the question many marketers fear: “Has anyone ever clicked on these… ads?”
Even the ad targeting, something the new “Max Campaigns” claims to fix, is currently a running joke. One user shared that they are currently being served ads for “sex swing furniture” despite definitely not being in the market for it.
When your paid ads are getting active downvotes or pitching niche furniture to the wrong people, you aren’t just wasting money. You are hurting your brand.
Why Organic Wins on Reddit
The analyst feedback highlights a major trend. Brands are realizing that a paid billboard in a subreddit does not build trust. A helpful comment or an informative post does.
When you focus on an organic strategy, you aren’t interrupting a conversation. You are becoming part of it. This is why “organic presence strategies” are becoming the go-to move for smart businesses.
There are a few key reasons why this shift is happening:
1. Trust cannot be bought
You can pay to have your logo at the top of a feed, but you cannot pay for respect. When a brand account answers a question genuinely or helps a user solve a problem, that creates a lasting positive impression. This requires a human touch, which is exactly why the analyst emphasized strategies built “by a person.”
2. You become the answer for AI
It is not just about Google search results anymore. Today, people are asking complex questions to AI tools like ChatGPT, Claude, and Perplexity. The RBC report specifically pointed out that recognition of Reddit’s importance for “large language model discovery” remains strong.
These AI models rely on Reddit data to understand what people actually think. When you engage organically, you are essentially teaching the AI that your brand is the trusted solution. If you rely only on ads, these models ignore you.
3. It is cost-effective
The analyst feedback described the ad environment as “challenging.” In the agency world, that is often code for “too expensive for the results we got.” Organic engagement takes time and effort, but it builds an asset that grows over time without draining your budget every month.
The Future is Authentic
Reddit is clearly working hard to make their ad platform better. That is great for the platform. But the market feedback tells a different story.
Businesses are moving away from pure ad spend and toward building a real reputation.
At RedPulse, we have always believed that the best way to market on Reddit is to act like a Redditor. It is about adding value, not just noise. It is validating to see the financial markets finally catching up to what successful brands already know.
The most effective way to grow on Reddit isn’t to shout the loudest with ad dollars. It is to speak the most clearly with authentic content.
