Why do organizations rebrand by themselves?

OF ALL THE points a enterprise needs itself compared with, cancer is much down the record. But which is what Fb got from Alexandria Ocasio-Cortez, a far-left congresswoman, right after rebranding by itself as Meta: “Meta as in ‘we are a cancer to democracy metastasising into a world wide surveillance and propaganda machine’”, she tweeted. Fb is barely the initially business to rebrand. Why do they do it?

The Economist today

Handpicked stories, in your inbox

A every day e-newsletter with the most effective of our journalism

From time to time rebrands abide by mergers: neither organization needs to show up the lesser, so a new identify is hatched. Often they sign a broadening of ambition, as when France Télécom turned Orange and commenced growing outside the house its dwelling market. Google metamorphosed into Alphabet soon after venturing outside of lookup into sexier realms, these types of as autonomous driving and surgical robots. Facebook’s rebrand seems equally encouraged. In a online video in which he appeared just about lifelike, Mark Zuckerberg, Meta’s chief govt, said the name was intended to mirror that the firm’s main reason for remaining is now to build items for the “metaverse”, a networked digital truth. And outside of its namesake social-media system, the agency owns other applications, which include Instagram and WhatsApp, and hardware models, this sort of as Oculus. The new umbrella identify resolves that “inherent awkwardness”, stated Mr Zuckerberg (its subsidiary products and solutions will continue to keep their names).

Sometimes firms rebrand to polish their reputation. As any marketer can attest, makes have equity that can depreciate. Occasionally they are greater ditched, so as to acquire distance in the consumer’s head from a tarnished good. Philip Morris, a tobacco agency, is now Altria—though it still sells cigarettes, which however cause cancer. The reverse can come about as well, exactly where firms find to bolster themselves by way of their marquees: that is how BSN, a soulless acronym, became Danone.

Separating the company entity from the product also allows corporations express diverse messages to distinct audiences. Companies interact with investors, politicians, regulators and workforce even though goods speak to buyers. This permits for two-keep track of messaging without showing up contradictory, suggests Laurent Muzellec of the company school at Trinity College or university in Dublin. Diageo can help liable consuming while Guinness advertisements on Tv set inform tipplers to guzzle the stuff. Meta, speculates Mr Muzellec, could sponsor initiatives to minimize teen on line habit although Fb carries on hooking the children.

Rebrands are not often thriving. In 2001 Britain’s Royal Mail, for some cause, resolved to call by itself Consignia, which expense £2.5m ($3.4m). It then unrebranded, which price yet another £1m. PwC Consulting turned the butt of company jokes when it took the title Monday, which was scrapped in a takeover by IBM.

No rebrand can deal with underlying issues with a merchandise. Far better, additional engrossing competitors are just a faucet away—as TikTok’s increase demonstrates. And it cannot be coincidence that Fb rebranded following decades of unfavourable stories. The rebrand will make none of them go absent, nor does it make its leader any extra credible. Meta could have just 50 % the letters in Facebook’s title, but it retains all of the company’s difficulties.