Technology

Meta removes firms from Fb trademark tax

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With the name change to Meta, the company formerly known as Facebook is trying to abolish the “brand tax” on apps such as Instagram, Messenger and WhatsApp, which some employees call “brand tax”.

Meta CEO Mark Zuckerberg announced the renaming on Thursday after a brutal seven weeks of document dumps showing Facebook knew of the damage its products were causing and refused to look into it. But the brand tax dates back to the 2016 presidential election when Facebook became an oasis of hateful content and misinformation.

Facebook’s other services, most notably Instagram and Messenger, have struggled to distance themselves from the constant embarrassment that plagued their parent company for the past half decades, according to those with expertise.

A pedestrian walks in Menlo Park, California on October 28, 2021 in front of a new logo and the name “Meta” on the sign in front of the Facebook headquarters.

Justin Sullivan | Getty Images

Branding became particularly difficult in 2019 when Facebook announced that it would mark all of its services with Facebook at the end of their name. Messenger became Messenger from Facebook, and the other apps went from Facebook to Instagram and from Facebook to WhatsApp.

Facebook said at the time that the rebranding should give users clarity. The same applied to the Oculus virtual reality unit and the Workplace business software offering, which also received the “from Facebook” label.

“This brand change is a way to better communicate our ownership structure to the people and companies who use our services to connect, share, build a community and grow their audience,” the company said in a press release dated Jan. November 2019.

But behind closed doors, Facebook did not express concern about consumer confusion. Rather, the company has tried to restore the strength of its name after a number of public relations setbacks, particularly after the Cambridge Analytica data hijacking scandal in 2018, several former employees told CNBC.

Facebook’s own brand was on the dump. Zuckerberg decided to consolidate the branding because he thought it would help associate Facebook with the company’s less polluted services, said the former employees, who asked not to be named because the information was confidential.

With a picture of himself on a screen in the background, Facebook Co-Founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill on October 23, 2019 in Washington, DC.

Chip Somodevilla | Getty Images

Some employees advised Zuckerberg to follow the path taken by Google, which created the name of parent company Alphabet in 2015, rather than attaching Facebook to everything, sources said.

Zuckerberg’s decision to showcase Facebook instead was not driven by data. On the contrary, he was presented with research showing that the association of one of the company’s products with the Facebook brand caused trust to wane, a former executive said.

Another employee said this was found in research on Facebook’s video calling device portal announced in 2018. The data showed that using the Facebook name would reduce public trust. The company went anyway with the name Facebook portal.

When asked for comment on the story, a CNBC spokeswoman led CNBC to a post from Meta Chief Marketing Officer Alex Schultz on Thursday.

“In 2019 we introduced a new branding that links all of our products together, but kept the Facebook name for both the company and our original app,” wrote Schultz. “But over time it became clear that the common Facebook name could cause confusion, not only for people who use products like WhatsApp or Instagram, but also for voters with whom we work. App is an important reason for this change. “

Instagram hurt the most

Instagram was hit particularly hard by the 2019 rebranding.

The photo app is mainly used by teenagers and young adults who have long viewed Facebook negatively. The “Big Blue App”, as Facebook is called, was considered a place where parents and strange uncles exchange stories and comment on the posts of their relatives.

Instagram’s marketing reps began to see from the quarterly brand tracking results that the new label was causing damage.

They tried making the “from Facebook” font smaller, not using it at all, or playing with the colors to hide the Facebook name, ex-employees said. Ultimately, they were outvoted, according to a former employee.

Zuckerberg insisted that Facebook had made Instagram a screaming success since it was acquired for $ 1 billion in 2012, and it was time for Instagram to give back, recalled a former manager.

After all, Instagram marketers would be measured by how well they connected the brands together. It was commissioned by Zuckerberg and is non-negotiable.

In contrast, Messenger was given permission to create a sense of separation, according to several employees.

Unlike Instagram, Oculus, and WhatsApp, which have all been adopted, Messenger was developed in-house. In 2014, Facebook turned it into its own app. To attract younger users, Messenger got the “blessing” a year ago to take some steps to improve the brand, said two former employees.

Messenger last year introduced a new logo with a gradient, predominantly purple, similar to Instagram’s logo. It was part of the Messenger team’s effort to position the app for Millennials and Generation Z users flocking to other services like TikTok.

Remove the Facebook name

As a meta, the company has no guarantee that Facebook’s trademark tax will be eliminated.

But Zuckerberg at least changed his approach less than two years after adding “from Facebook” to all of his company’s core services.

The company has already started renaming several of its units. The hardware division previously known as Facebook Reality Labs will now be called Reality Labs. The payments division, which was known as F2 or Facebook Financial, will now be Novi, the name of the company’s cryptocurrency wallet product.

Zuckerberg remains defiant after a series of document leaks by ex-employee Frances Haugen, the whistleblower, and the many stories that followed from the Wall Street Journal and other publications. One of the most notable stories showed that the company knew Instagram was detrimental to teenage mental health and did little about it.

“In my view, what we are seeing is a coordinated effort to selectively use leaked documents to paint the wrong picture of our company,” Zuckerberg said after the company’s quarterly earnings report earlier this week.

Some of the documents released showed that the number of teenage users of the Facebook app in the US has decreased by 13% since 2019, with a projected decrease of 45% over the next two years, according to The Verge. Additionally, Facebook researchers found that the company didn’t expect people born after 2000 not to join the social network until they were 24 or 25, if they ever did, Bloomberg reported.

Facebook addressed this issue in its earnings report on Monday. The company said it will start panning both Instagram and Facebook to show more videos of the Reels product to attract young users.

Zuckerberg said the company will seek to make all of its services attractive to young adults, but acknowledged that “this transition will take years, not months, to be fully implemented”.

The move away from the Facebook brand is the first big step.

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