In a dramatic move, Facebook has rebranded itself and renamed its parent company to 'Meta'. The change does not apply to its individual platforms, such as Facebook, Messenger, Instagram and WhatsApp – only the parent company that owns them.
In an announcement on Thursday, CEO Mark Zuckerberg said the rebrand marked a leap into futuristic technologies such as virtual reality. This will be a part of the 'metaverse' which he hopes will reach a billion people and generate business in digital commerce.
The company said it intends to start trading its shares under the new stock ticker MVRS from 1 December. Facebook has also unveiled a new sign at its headquarters in California, replacing its thumbs-up "Like" logo with a blue infinity shape.
While devices such as the Oculus Quest 2 and Playstation VR are making this metaverse more accessible than ever before, take up of VR and AR technologies is still in its nascency. Revenues are tiny compared to that generated by the social ads run across Facebook’s core social platforms.
So what are the real reasons driving this huge rebrand now? We look at the four most compelling causes, and the implications for performance marketers.
1. Diverting from a PR crisis
The most cynical takes on the rebrand stem from Facebook's ongoing struggles with accusations of monopolisation, privacy and the spread of fake news. This has been compounded by Frances Haugen’s testimony in Washington this month, where the former employee leaked information demonstrating that the company put profit before safety.
This rebrand can be seen as a 'reputation reboot'. It lets Facebook distance itself from its social media platform and renew itself by aligning with a growing number of users that do not currently use its platforms, especially in the growing Asia-Pacific region. While launching Meta will help shift focus away from its brand reputation issues somewhat, the overall damage will take a long time to fade.
Tom Bianchi, VP Marketing, EMEA, at Acquia, says: “Given the scale of the Cambridge Analytica scandal and the recent whistleblower revelations, it’s clear Facebook has a long way to go before it regains consumer confidence. Along with its redirection, Facebook needs to ensure that the positive steps it’s taking to improve data privacy and reduce misinformation need to be properly promoted to its users. While the metaverse is an exciting prospect and one that deserves column inches, Facebook needs to focus on rebuilding its foundations first and foremost.”
2. Diversifying from an increasingly restrictive ad ecosystem
Facebook is primarily an advertising company, but that is slowly changing. Traditional social media has been a crowded space with the likes of TikTok and WeChat capturing younger audiences.
What’s more, it has been locked in a battle with Apple over its audience data as the tech rival looks to ramp up its user privacy. Combined with the phasing out of tracking cookies and increased governmental pressure, now is a good time for Facebook to start diversifying its business model.
3. A cleaner ‘umbrella’ brand, like Alphabet
The rebrand echoes 2015, when Google rebranded to 'Alphabet' and created a series of subsidiaries under a new parent and stock ticker. Facebook is doing the same here, looking to extend beyond its legacy portfolio as a technology conglomerate and not just as a group of social and messaging utilities funded by ads.
The choice of 'Meta' as a name reflects Facebook’s future plans. Free of the shackles of social, it can take the company anywhere as technology and users habits evolve. This isn't about profitability in the next five years; it's about profitability over the next 30.
4. Owning the operating system of the future
Finally, and perhaps most importantly, this rebrand is about beating the likes of Google, Amazon, Tencent and Alibaba in the race to own ‘Web3’. Rebranding as Meta is a power-move from a company that intends to own that single sign-on from users in the operating system of the 3D future, controlled by headsets rather than touchscreens. While the sector is not huge now, Facebook is betting it will be in a few years' time. And it wants to be there first.
For marketers and advertisers, this is another move into a more personal, immersive world.
Dave Kelly, chief executive officer and founder at AnalyticsIQ, says: “Facebook’s recent rebrand to Meta proves the immersive world of AR and VR is upon us, further blurring the edges of reality and what people understand today. For marketers and advertisers, this [makes it more important to have] rich data [that provides] insight into not only who people are and what they do, but also — and perhaps most importantly — the ‘why’ driving their decisions. Gone are the days of relying on traditional demographic or behaviour-based audiences for targeted display campaigns. The Meta brand represents a need to leverage predictive and contextual audiences rooted in cognitive psychology that go beyond age and gender and speak to the hearts and minds of individuals in order to invoke a response.”