Facebooks Philip Morris moment How name changes worked out for other brands

By Jacob Bogage October 30, 2021 â€" 3.00pm

Enter the company formerly known as Facebook. The tech giant announced on Thursday it would henceforth be known as Meta, a nod to its grand - if hazy - aspirations beyond its flagship social media platform.

Company founder and chief executive Mark Zuckerberg said earlier this month the social network will pivot its experience toward the “metaverse,” a science-fiction-based expansion of the internet through virtual reality.

“We now have a new North Star,” Facebook CEO Mark Zuckerberg raved at its rebranding announcement.Credit:AP

The name change plus the new business focus show Meta officials attempting to unite the corporation’s holdings - Facebook, Messenger, WhatsApp, Instagram and Oculus - into a more cohesive offering, experts say, in a bid to lure investors and new talent.

“Now we have a new North Star,” Zuckerberg said during Thursday’s announcement. “From now on, we’re going to be the metaverse first. Not Facebook first.”

But the Facebook and Zuckerberg brands could be difficult to change, experts say, after whistleblower Frances Haugen gave regulators thousands of internal documents that show the company and its founder prioritised profit and engagement over user safety.

Companies generally change their names because they are actively expanding into a new clearly delineated line of business, said Allen Adamson, a longtime branding executive and founder of the firm MetaForce. The renaming process involves massive amounts of financial and legal resources, and they’re most likely to be successful when a business quickly and effusively moves away from its old products and into new ones.

Now Meta is faced with that challenge: Convince investors, employees and consumers that it truly means business beyond social media, and that its new overarching brand will behave differently - and is more than a cosmetic fix for its budding reputational concerns.

“The big opportunity for them is to tidy up the brand set up and to show they’re taking a new direction,” said Manfredi Ricca, global chief strategy officer for consultancy Interbrand. “The big risk is nothing really changes.”

Here are five other landmark corporate brand transformations, and how experts say they stack up to Facebook’s renaming.

Andersen Consulting becomes Accenture - 2001

Andersen Consulting was legally required to take a new name after splitting from its sibling professional services firms Andersen Worldwide and Arthur Andersen. But its move to Accenture is hailed by branding experts as the gold standard for renaming, Adamson said.

Andersen Consulting’s rebranding to Accenture is hailed by branding experts as the gold standard for renaming, Credit:Renee Nowytarger

The name is catchy - which always helps - but executives of the rebranded firm immediately outspent competitors on advertising to make Accenture a household name, Adamson said. The Andersen companies were thought of as legacy accounting firms. Accenture leaned into its 21st century provenance and billed itself as a forward-thinking competitor to power players McKinsey and Booz Allen Hamilton.

“Arthur Andersen, its brand was accounting, it was about telling you what already happened,” Adamson said. “Consulting is telling you what the future holds.”

Google becomes Alphabet - 2015

The world’s dominant search engine spent the early 2010s aggressively branching into other technology services and product lines: Android smartphones, Waymo autonomous electric vehicles, Calico life sciences, and more.

Consumers still largely know the company by its old name Google, but Alphabet has been a success with investors.Credit:AP

The Google name, Ricca said, was not elastic enough to cover all of the corporation’s businesses. It needed a holding vessel that told investors Google was about more than typing something into a search bar. And the Alphabet name has meaning, too: alphabet is the core of language and represents Google’s search origins, company co-founder Larry Page said; it also alludes to the company’s “bets” on ambitious products that could create “alphas,” or returns above investment.

Ricca said the Alphabet name has done its job. It’s a strong brand for investors and gives its subsidiaries uniting themes. Under the best circumstances for Facebook, its Meta brand will follow a similar trajectory.

“To investors, you’re essentially seeking a higher multiplier by saying, as an organisation, we’re headed to another future that has lower risk and higher opportunities than the current business as you know it,” Ricca said. “A new name to reflect that is important. You’re trying to use the name to tell a better story to investors.”

Kraft creates Mondelez - 2012

Kraft Foods in 2012 had two branches of food products. The first was its low-growth, but revenue-steady grocery division, which sold brands including Velveeta, Kraft Macaroni & Cheese and Oscar Mayer. Its snack division included rapid growth brands such as Oreo cookies, Cadbury chocolates and Ritz crackers.

Mondelez left its products names unchanged, holding on to household brands such as Kraft and Cadbury.Credit:Kraft/YouTube

Shareholders chose the name Mondelez - a name concocted by employees and meant to evoke the words for “world” and “delicious” in Romance languages - to spin off its snack business.

The spinoff went over well, Adamson said. It was transparently aimed at Wall Street; consumers could still buy Oreos and Ritz crackers in the same packaging and employees still made the same products in mostly the same factories. To investors, Adamson said, the name Mondelez conveyed the company’s ambitions: spread delicious snacks all over the globe.

British Petroleum becomes Beyond Petroleum - 2001

The company is still known almost universally as BP, but its rebrand to de-emphasise its fossil fuel holdings was a well-conceived, but poorly-executed effort, Adamson said.

Beyond Petroleum? BP’s new branding didn’t reflect its business strategy.Credit:AP

BP, he said, did not move swiftly enough to expand its renewable energy practice, and even as it did make renewable investments, they were not well publicised. It left both investors and consumers muddled on what the company truly stood for.

And then, of course, its Deepwater Horizon oil rig in 2010 was responsible for what many consider to be the largest marine oil spill in American history.

The catastrophe, Adamson said, flew in the face of the company’s overtures about investing in renewables. By 2013, it announced that it had divested of its wind-power assets and doubled down on oil and gas extraction.

“If you’re going to change your name, make sure you have a business plan, and you can deliver on that product,” Adamson said.

Philip Morris becomes Altria - 2003

The Philip Morris-Altria transition is the worst-case scenario for Facebook, Ricca and Adamson said. Philip Morris, one of the world’s largest tobacco and cigarette producers, took on the name Altria to shield its other brands - including Kraft Foods and Miller Brewing - from negative associations with the tobacco industry. (The company spun off Kraft in 2007 and sold most of its stake in Miller to Anheuser-Busch in 2016).

Was Big Tobacco, still is Big Tobacco: Philip Morris’ rebranding to Altria didn’t improve its image.Credit:AP

Researchers at the University of California-San Francisco found in a 2003 study that internal Philip Morris documents released as part of litigation discussed for more than a decade changing the name of the company for reputational purposes. Deliberations about a rebranding dated to 1989.

The strategy backfired, Ricca and Adamson said. Consumers and investors alike recognise the Altria name as one linked to tobacco and tobacco-caused death and illness, though antismoking advocates played a large role in consumer education.

Facebook’s rebrand to Meta could have similar consequences, if the company’s potentially damaged reputation from the whistleblower’s disclosures endures.

“Right now,” Adamson said, “Facebook is going through a Philip Morris moment.”

The Washington Post

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