Interbrand Thinking
Sam Ashken,
Play Collective

Can Meta Circumvent Facebook’s “Brand Tax”

Insider view

People play to reconnect with their authentic selves. This idea is at the core of how we think about the Play Arena at Interbrand. As such few brands are more central to play than those of Facebook.

The timing of Friday’s announcement make the stakes clear: can Facebook become Meta, ie the leading social technology brand for the metaverse era? Or has the pile-up of crises mangled trust beyond repair?

Four questions:
• Do people want the technologies which together comprise the metaverse?
• Are they willing and able to pay for them?
• Do they want these technologies from Facebook?
• Could they want them from Meta?

Let’s start with what the technologies are: simplifying a little, we’re talking virtual reality headsets, augmented reality and smart glasses.

VR has not yet set the word alight and is currently largely a technology for gamers. But it wouldn’t be right to talk VR down too much: CAGR has been 30% for five years and is projected to stay at this level for the next five.

Augmented reality is a less proven technology. And smart glasses have had at least one and maybe two false starts and will come with a number of privacy and cultural challenges.

So do people want these technologies? Well kind of. But two of the three are long shots and none of them have dead-cert mass potential globally.

Getting consumers to buy into these technologies is one thing. Getting them to pay for them is something else altogether.

Across all their brands, Facebook famously reaches nearly 3 billion people around the world.
The foundation for this extraordinary achievement is their success as a software developer for mobile. But they’ve built this success without ever needing to convince a consumer to shell out for hardware . In theory VR headsets and smart glasses could be paid for over the course of a contract too. And no doubt Facebook will believe they will be able to make the hardware more cheaply once they get production up and running. But still huge questions remain about Facebook’s ability to produce hardware which consumers will be willing to pay for at any meaningful scale.

Will customers want to buy them from Facebook? User engagement has for the most part weathered the barrage of reputational hits very well. But failures like Libra and marginal successes like Portal indicate that, as their own leaked documents would have it, there is a “brand tax” on Facebook innovations.

And perhaps that’s the point of Meta: a way to give their innovations a fighting chance, a way to reduce or eliminate the brand tax.

Will the strategy work? Too early to say. But when the leaks keep coming and when the Founder-CEO is so indelibly associated with the brand, it’s hard to think that a name change and a bold new technology vision will be enough.