In the AI era of digital advertising, creative optimization is becoming table stakes for major ad platforms.
Reddit acquired Memorable AI, a creative testing startup that specializes in tailoring ad creative based on an advertiser’s previous campaign KPIs, it announced Thursday.
The acquisition puts Reddit in a better position to compete with Google, Meta, Amazon and TikTok, which all built or expanded their AI-based creative generation and optimization tools within the past year.
As part of the deal, Reddit is also taking on all of Memorable AI’s employees, including its leadership team. LinkedIn lists 15 Memorable AI employees. Reddit declined to reveal the deal price.
“With this acquisition, we’re complementing Reddit’s contextual intelligence with creative intelligence to accelerate the performance of our ads products,” said Roelof van Zwol, VP of ads engineering at Reddit.
The acquisition will allow Reddit to run creative optimization across multiple types of media, including display and video.
“Creative has always been a massive driver of ad performance, but AI capable of processing images and videos hasn’t existed until now,” van Zwol said. “Memorable AI has made the biggest progress in terms of intelligent creative understanding, predictions and recommendations.”
Memorable AI earned outsized attention in its three years in market thanks to the backing of some major ad industry players, including MediaLink CEO Michael Kassan and Brian O’Kelley, former CEO of AppNexus and current CEO of Scope3. The company raised $2.75 million in funding back in 2022, including investments from Kassan and O’Kelley.
Memorable AI had also accumulated an impressive roster of advertiser clients since it launched in 2021. Several of these clients, including Unilever, Mars, Georgia Pacific and ExxonMobil, are also Reddit advertisers.
More recently, Memorable AI was selected as one of Gartner’s Cool Vendors in Generative AI for Marketing 2024. One of the company’s biggest strengths is its ability to help advertisers save money on creative testing, Gartner analyst Mike Froggatt told AdExchanger.
Post-acquisition plans
Reddit will make Memorable AI’s tech available to all Reddit advertisers. As they set up their Reddit campaigns, the software will provide data-driven feedback on creative, including copy, images and video. The tech can offer suggestions for how advertisers can tweak creative to drive their chosen metrics by analyzing past campaign data derived from ad platforms, DSPs and ad servers.
Adding capabilities for optimizing ad creative across all formats available on Reddit’s platform is a high priority, according to the company.
Memorable AI has hyped its ability to optimize ad creative without requiring advertisers to actually spend their budgets on media; such testing can consume between one-fifth and half of a campaign’s media budget, according to Memorable AI Co-Founder and CEO Sebastian Acevedo. Helping advertisers avoid these costs is another potential differentiator for Reddit’s ad business.
Before its acquisition, Memorable AI also stood out as an independent option for advertisers, who increasingly rely on platforms’ proprietary AI tools, Gartner’s Froggatt said. The software offered advertisers a way to check the homework of platforms’ black-box optimization solutions.
So, while the acquisition could be bad news for advertisers in the sense that they’re losing an independent optimization tool, it should be a boon for Reddit as it seeks to distinguish itself among the pack.
“Good creative is key to an ad’s performance,” van Zwol said. “This acquisition allows us to accelerate our work in optimizing, generating and selecting ad creative to deliver efficient, high-performance results for Reddit advertisers.”
In addition to Memorable AI, Reddit previously acquired machine learning experimentation infrastructure platform Spell in September 2022, textual analysis and semantic processing software MeaningCloud in July 2022 and audience and contextual insights platform Spiketrap, also in September 2022.
From Memorable AI to these earlier deals, the acquisitions, Reddit told AdExchanger, all tie back to its goal: to make it easier for advertisers to be successful on the platform through each phase of their campaign, from ad creation to delivery.
