Elon Musk, who acquired Twitter last year, announced on Sunday that Twitter’s brand name has now changed to “X”, and that he was attempting to dispose of the bird logo and all the related terms such as “tweet”. According to analysts and brand agencies, this has resulted in a loss between $4 billion and $20 billion in the brand’s value.
Steve Susi, director of brand communication at Siegel & Gale, said, “It took 15-plus years to earn that much equity worldwide, so losing Twitter as a brand name is a significant financial hit.”
The company’s value has deteriorated significantly since he acquired it for $44 billion in October last year and Musk decreed the change on Sunday. A new black “X” logo, designed by a fan during the weekend, began appearing across the platform by Monday morning. Linda Yaccarino, the new Chief Executive Officer, highlighted the company’s aim to rise as a site for audio, video, messaging, payments, and banking.
Analysts and brand agencies believe that renaming the company is a mistake. Twitter is among the most popular social media sites in the world, said Todd Irwin, founder of brand agency Fazer. Apart from Instagram and Facebook logos, bird images are visible on the websites of small businesses across the world.
Joshua White, assistant professor of finance at Vanderbilt University, said that Twitter’s success led to verbs like “tweet” and “retweet” becoming a part of the modern culture and was widely used by celebrities, politicians, and others to communicate with the masses.
The company will have to rebuild that cultural and linguistic popularity from the ground up. But that may be encouraging, and put a stop to comparing Twitter post-takeover to its former glory. Yaccarino tweeted, “It’s an exceptionally rare thing — in life or business — that you get a second chance to make another big impression.”
It’s an exceptionally rare thing – in life or in business – that you get a second chance to make another big impression. Twitter made one massive impression and changed the way we communicate. Now, X will go further, transforming the global town square.
— Linda Yaccarino (@lindayacc) July 23, 2023
In the past few years, many tech companies changed their names. On one hand, Google renamed itself to Alphabet Inc. to enable the growth of its different businesses without being attached to the search engine. Users still google things on the search engine. Facebook too turned into Meta Platforms Inc. to promote the company’s loyalty to the metaverse.
As per Brand Finance, a brand valuation consulting firm, Twitter has a brand value of $4 billion, while the firm estimates the values of Facebook and Instagram at $59 billion and $47.4 billion, respectively. Vanderbilt University estimates Twitter’s brand value at $15 billion to $20 billion, in comparison to Snapchat.
An analyst with Forrester Research Inc., Dipanjan Chatterjee, stated that it is difficult to measure a brand’s value as there is no single approach, and this is why estimates may differ. But since Musk acquired the company, its brand has significantly declined. For instance, Brand Finance estimated a loss of 32% of Twitter’s value since 2022.
Advertisers left when Twitter was changed. They worried about Musk’s controversy and incorporated tweeters who disobeyed the content rules. At Twitter, advertising revenue had reduced to more than 50% since October 2022, Musk said.
Jasmine Enberg, an analyst with Insider Intelligence, said, “Twitter’s corporate brand is already heavily intertwined with Musk’s brand, with or without the name X, and much of Twitter’s established brand equity has already been lost among users and advertisers.”
Co-founder of the marketing and brand consulting group Metaforce, Allen Adamson, said, it’s “completely irrational from a business and brand point of view.” He described the renaming of the brand as Musk’s “ego decision”. “To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever”, he said.
Musk’s future aims are also at risk. The company’s vision includes building banking and payments into the site which will need users to trust the company, which may be difficult to acquire after renaming the product name. Vanderbilt’s White said, “I just think that customers outside of Musk’s sort of core fan base would struggle to use Twitter to exchange their money.”
Irwin said, “The Elon brand”, is working in his favor as “his personal brand might be more powerful than the Twitter brand.”