Facebook is reportedly mulling a rebrand next week to indicate its focus on creating the metaverse, multiple media outlets including Reuters said, quoting The Verge. According to media reports, the name change would likely position the flagship Facebook app as one of the several products under a parent company with brands such as WhatsApp, Instagram, and Oculus, Reuters said. The rebranding reportedly aims to showcase Facebook's aspirations of becoming more than just a social media company, The Verge added. Facebook's spokesperson told MARKETING-INTERACTIVE that it does not comment on rumour or speculation.
In July, CEO Mark Zuckerberg said he hopes for Facebook to transition from a social media company to a metaverse company. Last month, Facebook invested US$50 million in a XR Programs and Research fund for a period of two years to collaborate with industry partners, civil rights groups, non-profits and academic institutions to build the metaverse responsibly.
Should Facebook choose to rebrand, it would not be the major first tech company to take on these steps given in 2015, Google created holding company Alphabet to house YouTube and its search business, among others. Co-founder Larry Page was then named CEO of Alphabet while Sundar Pichai was named Google CEO. The purpose of the reorganisation by the company was to make it "cleaner and more accountable".
In Facebook's case, the rebranding comes at a time when the tech giant faces scrutiny over the platform's ill effects following The Wall Street Journal's investigative series "The Facebook Files", as well as the testimony of former Facebook employee and whistleblower, Frances Haugen. Haugen had alleged that Facebook's products are causing harm to users, such as mental health issues among teenagers, and that the tech giant prioritised profit over user safety and well being. Zuckerberg and Facebook VP, global affairs Nick Clegg have since defended the allegations, with Clegg adding in a recent CNN interview that it plans to nudge teens to look at other types of content if they are found to be repeatedly browsing the same content. Facebook also intends to introduce new controls for adults of teens, on an optional basis, to allow them to supervise their teens' online activities.
Over the years, the Facebook name has taken a beating, from the Cambridge Analytica scandal to The Facebook Files. In 2019, Facebook even renamed Instagram and WhatsApp to "Instagram from Facebook" and "WhatsApp from Facebook" to be clearer about the products and services it owns. While the supposed rebranding would come at a contentious period, there is still potential for the rebranding to work out in Facebook's favour, say industry players.
Rishad Tobaccowala, author and Publicis Groupe's former chief growth officer, told MARKETING-INTERACTIVE that the name change puts some distance between the reputation issues of Facebook and the newer brands that are well regarded, such as Oculus. The move allows for recruiting of new talent for a brand with no reputational damage. It also allows for multiple new CEOs with more power to attract and retain talent, Tobaccowala explained.
"The rebranding also reflects the reality that the Facebook brand is now smaller than the combined Instagram and WhatsApp brand, and is growing slower and is the least important part," he explained.
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On the other hand, the rebranding can also potentially be interpreted as Facebook attempting to run from its "massively tarnished identity", Bob Hoffman, author of Advertising For Skeptics and an influential figure in the ad scene, said. He added that this move "could not come at a worse time" for Facebook.
In a LinkedIn post, Hoffman explained that every report about the new Facebook brand will reference and rehash the latest series of allegations against the tech giant, which is the last thing it needs. "Consumers pay no attention to corporate holding company identities. How many average people know or care that Google’s corporate name is Alphabet?" he said. Hoffman added that not only will the financial community not be fooled nor impressed by this name change, but regulators and governments that are mulling breaking up Facebook might also even view this as a provocation. Reiterating that this is "a big mistake" on Facebook's and Zuckerberg's part, Hoffman said sometimes the best media strategy is "just to sit down and shut up".
According to Hoffman, Zuckerberg's ego is the one reason for such a move at this time. "Zuckerberg has proven to be a one-hit-wonder. Every asset that Facebook (the parent company) currently controls besides the eponymous Facebook product itself, was either bought or copied from someone else," he explained. Hoffman described Zuckerberg's track record of introducing new initiatives as "dismal" and briefly cited Oculus as an example, which Facebook snapped up in 2014 for US$2 billion.
The reported rebrand and Zuckerberg’s obsession with the metaverse is a last-ditch effort by Zuckerberg to rescue his image as a fumbling, flailing one-hit wonder, and reposition himself as some sort of futuristic 'visionary'.
Aside from Facebook's branding, Zuckerberg might also have to contend with rescuing his brand image. Just yesterday, he was named a defendant in a complaint concerning the Cambridge Analytica scandal that was first brought against the tech giant in 2018 by Washington DC Attorney General Karl Racine. According to CNBC, this is the first time a US regulator has named Zuckerberg in a complaint. Both Facebook and Zuckerberg might be required to pay civil penalties, attorneys fees as well as restitution or damages to victims if they are found to have violated the law.
Racine alleged that Zuckerberg had "knowingly and actively participated" in each decision that resulted in Cambridge Analytica, adding that the Facebook CEO "helped mislead the public and government" about the company's involvement in the scandal, CNBC reported. Facebook has since called the allegations "meritless" as they originated more than three years ago when the complaint was filed.
Facebook reported a 56% in ad revenue growth to US$28.5 billion during the second quarter of 2021 ended 30 June. According to the company, this growth was driven by a 47% year-over-year increase in the average price per ad and a 6% increase in the number of ads delivered. Similar to the second quarter, Facebook predicted then that advertising revenue growth will be driven primarily by year-over-year advertising price increases during the rest of 2021. At the same time, it also continues to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the iOS updates.
Meanwhile, Facebook's daily active users were 1.91 million on average for June this year while its monthly active users were 2.90 billion. Both saw a 7% year-over-year increase. The tech giant, however, does not offer metrics for Instagram and WhatsApp.
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