October 28, 2021 – Facebook, Inc. reveals its new name: Meta. Social feeds paused the discussion of the latest Squid Game episode and quickly shifted to the one they call ‘Zuck’. In a statement, the founder and CEO of Facebook, Mark Zuckerberg, said this drastic rebrand is at the heels of a larger change:
“We are at the beginning of the next chapter for the internet, and it’s the next chapter for our company too.”
While Meta is now the official name of the parent organization, its primary social media site with 2.9 billion users, doesn’t appear to be changing.
Meta is an homage to Facebook’s imminent dedication to the metaverse. If, like many, you don’t know what the metaverse is, you are not alone. Wikipedia describes it as “a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.” It’s essentially access to a digital universe, and Meta is racing there full steam ahead.
If this sounds a bit like The Matrix, that’s because it’s not far off. In fact, readers should not forget Facebook acquired the virtual reality company Oculus VR in March 2014 for a cool $2 billion. Oculus, a headset that completely covers the eyes for an immersive 3D experience, may draw a lot of similarities to this world and ones seen in recent movies, including Ready Player One.
But we are not there yet, and it is unclear when we will be. A metaverse is only accessible through VR headsets or augmented reality glasses, which most of the US population doesn’t yet have access to. Emarketer expects “58.9 million people will use VR and 93.3 million will use AR at least once per month in 2021,” representing 17.7 percent and 28.1 percent of the US population, respectively.” Meta is betting that the growth of the connectedness of its sites like Facebook and Instagram will soon become an interconnected experience
Occulus is also just one of the billion-dollar acquisitions in the last decade. Instagram was acquired for $1 billion in 2012, WhatsApp for $19 billion in 2015, and Kustomer, a CRM platform, for $1 billion in 2020. In fact, the company has spent over $24 billion in acquisitions since 2005. Yeah, that’s with a ‘B’.
The success of these acquisitions is just another driving factor in rebranding Facebook, Inc. into a larger, more cohesive name like Meta. Facebook-owned properties like Instagram, Messenger, and Whatsapp have their own monthly active users that rival (and even exceed) the biggest competition in the space, including Pinterest, Snapchat, and TikTok. While this rebrand is far more inclusive of the full product suite, it also shifts focus from a stagnant Facebook to a future of possibility–one that can live within any of Facebook’s owned properties, including future acquisitions.
There are some, however, that feel this rebrand isn’t so one-dimensional.
A TATTERED PAST
Let’s rewind to just 4 weeks before this announcement. A fiery 60 Minutes interview featured a Facebook whistleblower alleging Facebook consistently (and knowingly) chose profits over public well-being in a mere tens of thousands of documents. These findings revealed a culture of calculated decisions to keep users engaging with content, despite their own research indicating harm could follow. The allegations include actions leading to the capitol riot, prioritizing divisive content for increased engagement and usage of their product, and driving increased suicide and eating disorder rates among teenage girls.
Fast forward 1 day later: Facebook, Instagram, and WhatsApp were offline and unavailable globally for more than seven hours, setting fire to a fresh news cycle. Users scrambled to adjust to life without their technology as the world experienced a rare silence from their smartphones.
While this may seem like a rough month for any company, it’s not far from what they have consistently battled for years. Public outcry, criticism, and call for action have become commonplace. There have been blackout protests, calls for content moderation, senate hearings, antitrust lawsuits, and large-scale campaigns against the platform, such as Stop Hate for Profit.
The largest of these critiques, however, comes down to privacy concerns most notably revealed within the Cambridge Analytica scandal where 87 million Facebook users had their data harvested without their consent. This, among many future violations, has led to organizations and governments demanding users’ rights to privacy and controlling their personal data.
Apple: Enter Stage Left. In April 2021, Apple unleashed IOS14.5. This ignited a battle of the titans between themselves and then-Facebook, Inc. The update included a new feature: App Tracking Transparency. This allows consumers to opt-out of sharing their data outside of the app they are currently using. Meta took a loud opposition to this update saying it would hurt the growth of millions of businesses around the world, but we all knew this loss of data just highlighted the company’s reliance on cookies and that this update would disrupt their business model.
Despite the pressure and recent signal loss, Facebook’s success rarely stalled. With continual growth since its inception, 60% of the world’s population accesses Facebook at least once a month. Not to mention, their stock price is up a whopping 779% since its IPO in 2012, making the internet mogul one the world’s most valuable companies.
In recent years, Meta has implemented policies in place to address a portion of the outcry. This includes introducing an oversite committee, policies around bullying and content moderation, and user features to better control personal data on the platform. However, most argue that it’s not enough. Senator Richard Blumenthal took to Twitter after the 60 Minutes interview to say that “Facebook’s actions make clear that we cannot trust it to police itself. We must consider stronger oversight, effective protections for children, and tools for parents, among the needed reforms.”
As long as lawlessness exists in this space, Meta will only do what it must while keeping users leaned in along the way. It seems absolute power does corrupt absolutely, and this rebellious teenager phase may become permanent if not unchecked.
ALL THINGS CONSIDERED
Maybe the future won’t be so bad–Meta surely doesn’t think so. This was best stated near the end of Zuckerberg’s letter: “Our hope is that within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.”
Will fortune favor the bold? History would tell us so. Facebook has been able to dominate the industry with profitability in ways companies like Myspace couldn’t have dreamt of. Through its acquisitions like Instagram, which is now generating half of the company’s US revenue for the first time ever, this change in name and company vision would suggest they are only setting themselves up for success as the concept and access to the internet continues to evolve.
The mounting and relentless pressure on the company cannot be ignored though, and brands will undoubtedly begin to rethink their investment in the company’s properties if Meta’s reputation and values start to put their brand’s reputation at risk.
In the wild west of digital media, we know that change is the only constant. Change is instilled in the DNA of how these companies operate. Brands need to be prepared to not only adapt to the ever-changing nature of platforms they run media on, but also the evolution of the partners they choose to work with.
As brands are considering how to adapt to both the values and new direction of Meta, the below can serve as considerations depending on risk tolerance and partnership values:
- Continue Meta investments as planned, testing into new formats brought forth by the new direction as they become available.
- Pros: This allows you to continue to leverage Meta properties and prioritize Meta where it drives the best performance. This lets you develop test and learn strategies to adapt to the metaverse as new offerings and their timelines become more solidified.
- Cons: Brands who continue to advertise with Meta may begin to feel the effects of the platform’s criticism and negative PR until calls for change are implemented across its properties.
- Devise a test and learn strategy on other social platforms to increase agility and bring confidence to decision-making ahead of future updates.
- Pros: This approach provides diversified go-to-market strategies that aren’t reliant on Meta properties. If a brand needs to switch due to future circumstances, they can do so confidently with a data-first approach on the consequences.
- Cons: The above brand safety risks from the first option apply, but in a lesser degree. Performance may also decrease during test and learns while future budgets without Meta properties (and their best-in-class tech) are identified.
- Identify your brand values and pause your advertising with Meta (and other partners) until your values are in sync.
- Pros: This approach prioritizes brand safety and applies pressure where Meta will feel it the most–their wallet. It’s the safest way to ensure that the priorities you hold as a brand are in sync with where your dollars are being invested.
- Cons: Many advertisers see their best performance across Facebook and Instagram, regardless of funnel phase. Everything from household penetration to digital revenue goals will need to be re-evaluated during this shift.