29 NOV 2021
Into the Metaverse: Can Facebook rebrand itself?
Mark Zuckerberg wants to lead consumers into the metaverse, but it’s unclear whether they will follow.
The enigmatic Facebook founder raised eyebrows last month when he unveiled the company’s new name and logo — Meta. Branded with a distended infinity symbol, Meta is meant to reflect the future of the world’s largest social media platform. Facebook, Instagram, WhatsApp, and Oculus now fall under the Meta umbrella, along with Zuckerberg’s vision for an immersive, virtual reality world where people can meet in a digital space.
“Our mission remains the same. It’s still about bringing people together,” Zuckerberg said in a video announcement. “We are still the company that designs technology around people. But now we have a new north star to help bring the metaverse to life.”
Wharton marketing professor Patti Williams isn’t sold on the stated reasons behind the name change or the timing. Embroiled in controversy, Facebook is facing intense scrutiny over data privacy, monopolism, and allegations that its algorithms help to spread disinformation. The company has long been the target of policymakers who want to reform it, especially after whistleblower Frances Haugen testified before a Senate subcommittee last month about the company’s allegedly harmful practices.
“The truth is a brand name doesn’t change what’s going on in an organisation,” Williams told the Wharton Business Daily show on SiriusXM. “The dilemma they’re facing now is, do people want to be part of dystopian metaverse that’s run by a company that seems to have the kind of values that Facebook has? I don’t know if consumers really do.”
Williams said companies typically rebrand themselves or their products when there is a merger or acquisition that requires an updated corporate identity, when there is a shift in strategic direction, or when the existing brand name no longer fits or reflects outdated norms (think Uncle Ben’s rice changing to Ben’s Original, or Weight Watchers dropping to WW).
“I think what you see here is Facebook hitting point No. 2 and point No. 3,” Williams said. “There’s a shift in strategic direction, and they’re facing a lot of baggage with their current brand name. Both of those things combined seemed to have led them to decide that the new name is one that maybe has more positive potential in the marketplace.”
Google rebranded in 2015 when it renamed its parent company Alphabet, a change that allowed it to restructure its portfolio for the markets. But consumers still don’t call the company Alphabet, and the phrase “just google it” is likely to remain in the lexicon for some time. Facebook is facing a similar fate, Williams said, because the name resonates in popular culture even if there are negative connotations.
She said the company can spread the new name if they help consumers form meaningful associations with Meta. That would be a smart move, considering Facebook’s aging customer base. Younger social media users are flocking to other platforms, including Snapchat and TikTok.
“I think Facebook as an organisation really is feeling crimped by the fact that they run software on other people’s platforms,” Williams said. “That might reduce their profitability, reduce their options, and they see this metaverse as a way to become not just a software social media player, but also have a whole ecosystem of hardware and software and things they can offer consumers more broadly.”
Ultimately, the Facebook platform may not continue in its current iteration, especially if it begins to damage other businesses in the Meta portfolio, Williams said.
“Who knows what the future looks like for Facebook,” she said. “Maybe over time it declines so much that we no longer think of Facebook as the end-all, be-all for them.”
Knowledge@Wharton is the online research and business analysis journal of the Wharton School of the University of Pennsylvania.