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Joanna Seddon, Managing Partner, Presciant

We are being deluged with hype about Facebook’s rebrand. The commentary is all over the place. We need to take a step back and take a brand perspective.

I believe that, from the point of view of brand strategy, the change of the Facebook corporate brand to Meta is a masterstroke. It simultaneously accomplishes three things:

  1. Distraction: The announcement has successfully deflected attention away from the scandals and lawsuits which had been doing serious damage to Facebook’s reputation. As we all know, there has been a torrent of negative publicity. Facebook is accused of amplifying lies around election cheating, intensifying right-wing extremism and contributing to the January 6 attack on the US Capitol. The Biden administration has blamed it for spreading misinformation about the harmful effects of vaccines and causing government to miss its initial vaccination goals. Documents leaked by the former Facebook employee, Frances Haugen, have revealed that the company was well aware of the harmful effects of Instagram on teenagers’ self-esteem, but had deliberately kept quiet about them. All for the sake of advertising revenues and financial gain. The company has been compared to Philip Morris, the tobacco company, which changed its name to Altria, to restore its reputation after years of damage from covering up the deadly effects of tobacco. We’ve seen Facebook and Mark Zuckerberg up before Congress and the Houses of Parliament. The company is under intense scrutiny and investigation with calls for legislation, regulation and splitting it up.
  2. Rejuvenation: The Meta concept rejuvenates Facebook and adds much needed coolness to a withering brand – a breath of youthfulness. Facebook’s relevance among younger generations has been declining for years. For GenZ, Facebook is ‘a brand for old people’. The company’s own studies, published in the Wall St Journal, show that, in the U.S., the daily number of teens using Facebook has fallen by 19% over the past two years, and is likely to decline by another 45% by 2023. Facebook paid almost $20 billion for Instagram, to increase its appeal to the young. But even Instagram is beginning to look old and losing ground to TikTok and Snapchat. The Facebook name is antique, harking back to the printed college year books from which it originally started. In desperation, its management initiated some questionable research, to identify how to create versions of its apps that will appeal to 9-year old’s. The announcement reverses a lot of this. It makes the company look cool again. Meta is a sexy name, even or because no-one is quite sure what it means.
  3. Ambition: All Facebook’s businesses circle round and round within a narrow construct – traditional social media networking. Groups of friends or followers talking to each other. There has been no breakthrough innovation in social media networking for many years. All the social media offerings, even TikTok, WhatsApp and Snapchat, are tweaks on the same theme – adding videos, encrypted global messaging, free calls, disappearing posts etc. Facebook’s name change communicates a big ambition and future thinking. Ideas of us jumping from virtual encounter to virtual encounter, across technologies, channels geographies, all our data coming with us, unstintingly, and in a way that connects directly to our real lives and the physical world.

From the point of view of business strategy, the new brand strategy does one thing very cleverly. The name change directs investor focus away from the social media behemoth, to Facebook’s smaller and emerging future businesses, which were almost totally drowned out by it. This isn’t a new idea. Zuckerberg copied it from Sundar Pichai at Google. The intention of Google’s 2015 rebranding to Alphabet was to get investors to realize that the company was about more than search, to draw attention to its ambitions and investments in multiple other areas designed to bring future benefits to society – everything from electric cars, to anti-aging. And it worked, quite brilliantly. After a period of lagging behind the S&P 500, Google stock has consistently outperformed the S&P 500 since the Alphabet reorganization.

How real is the ‘Metaverse’ strategy? What is it? It is completely unclear. The name, as critics are pointing out, is taken from a 30 year old science fiction novel by Neal Stephenso, Snow Crash, full of conventional ideas, white men, and, like most science fiction, backward looking. Facebook says it is investing a lot in the Metaverse – $10 billion in 2021 alone and has 10,000 people working on it.  But so far, all that has come out of it is Oculus augmented reality headsets and a prototype of a virtual reality developer platform, called Horizon Worlds. The headsets may be gaining more traction now the price has come down, but are another old idea, one that many companies have tried and failed to make work over many years. Surely we should be thinking bigger. Chips implanted in your skin perhaps?

How risky is the strategy? Not very. Zuckerberg may be attempting to accomplish too many things at once—see off whistleblowers and anti-monopolistic regulation, escape dependence on rivals Apple and Microsoft’s platforms and privacy rules, create a renewed appeal to younger generations, and position the company as an exciting, relevant and purposeful future investment. The company is doing incredibly well financially, with around $84 billion in advertising revenues. It will continue to enjoy a gigantic stream of profits from advertising for many years to come.

So is this all ‘lipstick on the pig’? Quite possibly. But at least it is innovative, future forward and aimed at bringing social benefit. Zuckerberg may lack charisma. But his statements aren’t wholly focused on his own ego. Contrast that with other billionaires such as Jeff Bezos and Elon Musk who are spending billions on taking trips into space and trying to find ways they can live forever.

P.S.  have you noticed the striking similarity of the Meta logo to the new Webex logo?


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