Diply feels viral chill: Facebook’s algorithm change leads to plummeting traffic and layoffs

Diply has been one of the great success stories of Canada’s startup boom, winning innovation awards, drawing international fanfare and tens of millions of readers for its punchy listicles, articles and videos on lifestyle issues, humour and online culture.

However, since Facebook changed its branded content policies and moved to restrict the amount of content from publishers in users’ News Feeds in January, Diply’s web traffic has tumbled, and its ability to draw viral clicks from Facebook has fallen dramatically.

As a result, Diply’s position as a leader in the viral content business may be in question, according to former employees.

According to data from BuzzSumo, a content marketing and SEO firm, 15 posts published by Diply received over 100,000 engagements on Facebook in the last six months of 2017. In the first half of 2018, that number fell to two posts. In the last six months of 2017, 62 posts received over 50,000 engagements on Facebook. In the first half of 2018, that number fell to seven.

“We depended almost solely on Facebook for pushing social traffic and didn’t diversify enough across other platforms—whether Pinterest or Twitter or Reddit—and, because of this, there was unsurprisingly a decline when the algorithm shifted,” said one former employee, who left earlier this year and spoke on the condition of anonymity.

Web traffic to Diply has declined for two years, with total visits falling over 85 per cent from January 2016 to June 2018. According to SimilarWeb, an internet research firm, Diply generated 110 million visits in July 2016, falling to just over 50 million by March 2017, 32 million in January 2018 and finally to 13.7 million last month.

Diply did not respond to several requests for comment from The Logic, and the data from research firms cited in this story were sent to its public relations director.

Despite the drastic traffic loss and industry-wide trends, several former employees—who declined to speak on the record because of future employment concerns—told The Logic that the company wasn’t forthcoming about the immediate impact of Facebook’s changes.

“We were told that other publishers had been hit worse [by the Facebook algorithm change] than we had, and that at the end of the day we would still have jobs,” said one former staffer at Diply, who was let go in February. “The same week, we were laid off.”

Diply, whose parent company is GoViral Inc., was founded in 2013 in London, Ont.. Co-founders Taylor Ablitt, Dean Elkholy and Gary Manning launched the site with the single goal “to create a content publishing platform that had the visual appeal of Pinterest, BuzzFeed’s captivating titles and Tumblr’s full-body content, but with a more engaging and intuitive experience,” according to a 2014 press release.

The next few years were marked by praise for Diply, which has been celebrated as one of Canada’s most innovative and fastest growing companies. In January 2016, the company received venture funding from BDC Capital and grew to 150 employees by September of that year. During this time, the company hired Kirstine Stewart, one of Canada’s best known media executives who had also served as the head of CBC English services and vice-president of Twitter. Stewart left in January to join the digital firm TribalScale. Diply currently boasts offices in New York, Chicago, Los Angeles and Toronto, as well as its headquarters in London, Ont..

In November 2017, it was named the fastest growing company in Canada by Deloitte’s Technology Fast 50 program.

And industry accolades continued into this year when, on February 22, Diply accepted a distinction for best media and entertainment company at the Canadian Innovation Awards.

One week earlier, though, the company had quietly laid off staff. Several accounts and sales personnel who worked on the company’s influencer program, which courted prominent social media personalities to share its content and drive up web traffic, were let go. Others who worked on the program were reassigned. Diply did not reply to requests for comment about the number of positions impacted.

Weeks before, Facebook had changed its branded content policies to bar page owners from accepting compensation for sharing content they weren’t involved in producing, massively reducing the so-called “influencer marketing” business those staff worked on, which drove traffic by generating social shares.

“Whenever a new form of distribution comes along, you see companies that try to optimize for it,” said Joshua Benton, director of the Nieman Journalism Lab at Harvard University. “That happened when we saw the rise of Facebook sharing in the early part of this decade. The unfortunate thing about building your business around a platform you don’t control is you can’t do anything about it when it changes.”

The founders of Diply pose for a photo after accepting a distinction for best media and entertainment company at the Canadian Innovation Awards. A week earlier, though, the company had quietly laid off staff. Feb. 23, 2018. Source: Facebook

In previous interviews, the company has openly acknowledged that the bedrock of its business model depends on social sharing.

In 2015, CEO Ablitt told USA Today that social media accounted for 80 per cent of Diply’s traffic, adding that over 70 per cent of that social traffic came from Facebook.

According to SimilarWeb, the company’s dependence on Facebook hasn’t waned over the past two years. Roughly 89 per cent of Diply’s worldwide desktop traffic from July 2016 to June 2018 came from social media; 97.6 per cent of it came from Facebook.

“The most fundamental thing for Diply is the understanding that consumers discover lifestyle and entertainment content in their social feeds,” said president and chief revenue officer Dan Lagani in a September 2017 interview. “They’re finding our videos and stories by following Diply, [arts and crafts vertical] Crafty, and/or [food vertical] Delicious through shares, comments and recommendations from family and friends.”

Diply is hardly alone among viral publishers when it comes to falling audiences in the wake of Facebook’s changes. Others, including Bored Panda (which went from 56 million total visits in January 2018 to 24.9 million last month, according to SimilarWeb) and Viral Thread (4.2 million to 2.6 million over the same period) have seen similar declines.

LittleThings, another competitor that scaled its audience by circulating stories and videos on Facebook, shut down on February 27.

CEO Joe Speiser told Business Insider that the January algorithm change eliminated 75 per cent of LittleThings’ organic traffic and dragged down profit margins.

In Diply’s case, some believe that there were warning signs that went ignored by the company’s leadership.

“Facebook had already made News Feed tweaks to try and stifle clickbait in 2016 and 2017,” said the former Diply employee who was laid off in February. “In my opinion, [the company] should have been more on top of this, knowing that more drastic changes were always possible.”

Diply has not said whether the company will pivot in light of the steep drop in Facebook traffic.

“My hope,” said the former employee, “is that they are now considering new ways to drive traffic and revenue from different social networks, and are looking at other kinds of paid social media promotions that don’t hinge on the discretion of one company.”