Facebook won't be able to escape its recent controversies with a new corporate identity, Madison Avenue leaders say in response to reports that the social media behemoth is gearing up to announce a rebrand at its virtual reality summit next week.
According to reports, Facebook is considering adopting a new corporate identity while still retaining individual brands, which include the Facebook app, Instagram, WhatsApp and Oculus virtual reality, among others. It would be a similar move to the one Google made in 2015 when it rebranded its corporate umbrella as Alphabet.
A Facebook promo for next week’s Connect VR event said, “big news is coming … infinite horizons.” There were suggestions that Facebook could play with names that include “meta,” “infinite” or “horizons,” in a vaguely futuristic title that propels itself into the “metaverse.”
Regarding the reports, a Facebook spokesperson only said, “We don’t comment on rumor or speculation.” Advertising industry insiders, who spoke with Ad Age on the condition of anonymity, said that if there is a name change, it would be an attempt to deflect from Facebook’s troubles — bad publicity, congressional inquiries, regulatory lawsuits, advertiser weariness and whistleblowers.
There is a negative aura around the name “Facebook,” said one creative agency executive who has worked closely with the company. “Can Facebook do anything in the metaverse if it has to drag all of the brand baggage with it?"
As Facebook looks to open new business avenues in the virtual world, the executive said the brand is "vulnerable" and "in trouble" with the very people it would need to work with in the metaverse. "So, if you’re trying to open new businesses and find new ground to conquer, it’s hard to do that with the ‘Facebook’ name on your door.”
The Connect event is a chance for Facebook to show it can reinvent itself in the metaverse — the virtual paradise just around the corner if you are to believe tech “visionaries,” who dream in NFTs, wear augmented reality glasses, and dabble in cryptomarkets. And the real world has only been dragging Facebook down, anyway, with questions like: Are you harmful to teens, democracies and public health?
"It's like the artist formerly known as Facebook," said one tech consultant, also speaking on condition of anonymity, adding that a name change doesn't make sense.
Facebook CEO Mark Zuckerberg should not celebrate the launch of a brand into the metaverse, or throw a tarp over the old Facebook, like nothing happened, and expect his company’s doubters to disappear, according to Kate Watts, CEO of Long-Dash, a creative consultancy with plenty of experience in the rebranding game. “If anything it will double-down on public scrutiny,” Watts said. “Especially if it’s a celebration. It will neither deflect from, nor mitigate, Facebook’s controversies.”
It is still unclear exactly how Facebook would reveal a new identity. Facebook declined to comment, and people close to Facebook have said the "rebrand" is a closely guarded secret. It could be a "corporate umbrella" moniker that allows Facebook to build new companies without being tied to its original name, according to advertisers.
Facebook is expected to reveal new products and its metaverse roadmap at Connect. Facebook owns Oculus virtual reality devices, and it has been developing augmented reality glassed with Ray-Ban. Zuckerberg is watching the rise of alternative realities in cyberspace like Epic Games and Roblox, and the interest in non-fungible tokens, and he sees the future like so many of his peers. Last month, Twitter became adjacent to the metaverse with some new interoperability with NFTs and Bitcoin.
Facebook has launched VR products within the past year called "Infinite Office" and "Horizon Workrooms" that open virtual reality worlds to the work-from-home crowd.
The prevailing sentiment from many Facebook critics, though, is that any rebrand would be "just a distraction,” as another advertising executive at a top media holdings company described it. “They’re trying to intentionally distract.”
Facebook has been dealing with what it considers to be a brand perception problem, while legions of attackers think it is a uniquely malignant actor, the ad exec said. “There are many schools of thought on this,” the ad exec said. “There are those who think Facebook is benign and that there’s nothing that 'good marketing' can’t solve. Now, I don’t agree with that at all.”
The advertising world has stuck with Facebook, though. It has 10 million-plus advertisers and generated nearly $85 billion in ad sales in 2020. While there are daily reminders that the company is in public trouble, it also is very publicly raking in money. On Wednesday, the District of Columbia attorney general updated a privacy complaint against Facebook, adding Zuckerberg directly into the lawsuit over alleged data breaches related to Cambridge Analytica. That was one of the founding scandals of the 2016 election that cast a shadow over Facebook. Cambridge Analytica was a data scraper, which revealed exploits in Facebook’s marketing machine. Facebook had to rebuild how it shares data with the rest of the advertising industry following the affair. And Cambridge Analytica showed that Facebook could possibly be used for twisted political purposes.
The mood hasn’t gotten much brighter since. During the 2020 U.S. election season, there was civil unrest and racial justice protests, and extremists rallied on Facebook, according to civil rights groups. In July 2020, there was a monthlong boycott with more than 1,000 brands freezing ads on Facebook. The boycott was organized by the Anti-Defamation League and NAACP. Just this week ADL CEO Jonathan Greenblatt described social media as “nothing less than a super-spreader of disinformation and hate. No service exemplifies this fact moreso than Facebook.”
Greenblatt was sharing prepared remarks in the wake of the Facebook whistleblower, Frances Haugen, an ex-employee who leaked documents from the company and testified to Congress about its alleged harmful effects on society. Haugen claimed that after Facebook studied the negative effects it had on some teens’ self-esteem, it did not act when alerted by its own research.
Now, that all sounds bad, but Facebook's leadership has been able to hold advertisers close by convincing them that these are larger societal problems with the entire internet. Plus, where would advertisers go? Chinese-owned TikTok will join Snapchat and YouTube in a Congressional hearing next week, during which those companies will also be grilled about the effects of social media on teens. That hearing is set for Tuesday, just ahead of Thursday’s Facebook Connect event, where it could celebrate the metaverse.
Meanwhile, Facebook is in the middle of a $1 billion media review process, in which three of the largest media holdings companies, Dentsu, Havas and Publicis, are vying for its business. At the same time, WPP still works with Facebook as a media buyer, but is not part of the review process. So, Facebook has deep relationships in all parts of the advertising world, as both a buyer and purveyor of media.
The winning agency could find itself in the role of having to reimagine the Facebook brand. People close to the review process have told Ad Age that Facebook has been running exercises with the agencies that include crafting their thought leadership and strategies for dealing with crises. The winner of the review could be named as early as the end of this month, a person close to the process said.
This is an interesting challenge for the winning agency that has to steer Facebook's brand, Watts said. Facebook needs to have an “elevated” discussion about what this rebrand means for the company and its values, she added.
“If it hopes this legacy won’t follow them,” to the metaverse, Watts said. “We’re way past that. The legacy is already there.”
Greg Paull, principal at R3, the agency consulting company, said that Facebook is still well-positioned despite all its setbacks. Facebook has nearly as good a claim as anyone to seize the next shift in computing, Paull said. “The umbrella strategy is clearly trying to redirect and focus on the next big thing. No one has a larger user base than them, and they clearly see this as the first critical step to building deeper relationships with them.
“Their investment in Oculus, for example, is yet to pay off,” Paull said. “But it is a potential cornerstone of a much larger metaverse solution that can be leveraged through the world’s largest user base.”