Brand tax is what employees referred to Facebook

With its name change to Meta (formerly known as Facebook), the company tries to discharge what some employees called a brand tax on apps, including WhatsApp, Instagram, and Messenger.

Last Thursday, Meta CEO Mark Zuckerberg declared the rebranding of his company after it went through some challenges resulting from some documents showing the harm its products caused. At the same time, the company refused to address them. However, the brand tax dates back to the presidential election in 2016, when Facebook became a haven of offensive content and misinformation.

According to people who understand the matter, Facebook’s other services, such as Instagram and Messenger, struggled to avoid the regular embarrassment plaguing their parent company over the past five years.

Throwback in 2019 and earlier

Brand separation became especially difficult in 2019 when Facebook said it would link all its services with Facebook. All the apps became apps from Facebook, for example, Messenger from Facebook, WhatsApp from Facebook, and Instagram from Facebook.

In 2019, Facebook said that the company intended the rebranding to provide certainty to users. The same thing happened to its Oculus virtual reality unit offering Workplace. It also got the label – from Facebook.

In 2019, the company said in a press release that the brand change intended to improve the communication between the people and businesses using their services to share, connect, and build community while growing their audiences. However, behind closed doors, the company did not express concern about customer confusion. 

Several former employees told CNBC that instead, the company tried to recover the power of its name after a series of public relations difficulties, most prominently the Cambridge Analytica data hijacking scandal in 2018. The anonymous former employees said that Facebook’s brand was in trouble, so Zuckerberg decided to combine the branding. He did that because he thought connecting Facebook with less-stained services would help. The source said that some employees recommended Zukerberg to follow Google’s path by creating the parent company (Alphabet in 2015) instead of attaching Facebook to every app and service.

Instagram got hurt the most during the rebranding

Instagram experienced a serious hit during the 2019 rebranding.

The app users are primarily teens and young adults with a negative view of Facebook. The audience of Facebook perceived the app as the place where parents and weird uncles go to comment on their relatives’ posts.