While third party app users probably had a larger proportion of contributors, Reddit is big enough to still have plenty of content. Moderators are more interesting and it remains to be seen over time if an erosion of quality moderation happens which would make Reddit even shittier. Especially since Reddit seems to keep fumbling when it comes to providing good first party mod tools, see the whole r/Blind fiasco.

am I wrong in thinking that the users are the product and the advertisers the customer?

As long as profitability is the goal then you are correct.