By Aisha Counts and Jesse Levine | Bloomberg
It’s uncommon for corporate brands to become so closely associated with everyday conversation that they turn into verbs. It’s even rarer for the owner of such a brand to announce plans to deliberately dismantle it.
On Sunday, in the midst of a quiet summer weekend, Elon Musk declared that the product name of Twitter would be changed to “X,” and that he intends to eliminate the bird logo and all associated words, including “tweet.” Musk’s decision resulted in a loss of value estimated between $4 billion and $20 billion, according to analysts and brand agencies.
“It took over 15 years to earn that level of recognition worldwide, so losing the brand name Twitter is a significant financial blow,” stated Steve Susi, director of brand communication at Siegel & Gale.
Musk, whose company has already experienced a significant decline in value since his acquisition of it for $44 billion in October, announced the change on Saturday night. By Monday morning, a new black “X” logo, designed by a fan over the weekend, began appearing across the site. New Chief Executive Officer Linda Yaccarino outlined the company’s vision for X to become a platform for audio, video, messaging, payments, and banking.
Analysts and brand agencies view the renaming of the product as a mistake. Twitter is one of the most recognizable social media brands, according to Todd Irwin, founder of brand agency Fazer. Bird decals can be found on small businesses and websites worldwide, along with Instagram and Facebook logos.
Twitter’s popularity has also resulted in verbs like “tweet” and “retweet” becoming part of modern culture, regularly used to describe how celebrities, politicians, and others communicate with the public, said Joshua White, assistant professor of finance at Vanderbilt University.
X will require the company to rebuild that cultural influence and linguistic consensus from scratch. However, this may be part of the motivation, so that users stop comparing the post-takeover Twitter to what it was before. “It’s an exceptionally rare thing — in life or in business — that you get a second chance to make another big impression,” Yaccarino tweeted.
On Monday, the company began removing the word “Twitter” from the sign at its headquarters. The brand change was so spontaneous that the city of San Francisco requested the crane to stop removing letters, leaving only “er.” “Twitter, or X, never proactively gave notice or inquired about sign removal/updates to the City, so it’s on pause until the Planning Department gives guidance to the Department of Building Inspections,” a spokesperson for Mayor London Breed said in a statement.
Other tech companies have recently renamed themselves. Google transformed into Alphabet Inc. to allow different businesses within the company to grow independently of search. Facebook changed to Meta Platforms Inc. to emphasize the company’s commitment to the metaverse. However, the product names remained the same; we still use Google as a verb to search for things.
This distinction holds tremendous value. Brand Finance estimates Twitter’s brand value at about $4 billion. The firm values the Facebook brand at $59 billion and Instagram at $47.4 billion. Vanderbilt University estimates Twitter’s brand value at $15 billion to $20 billion, which is comparable to Snapchat.
Brand valuation is challenging to determine, and there are multiple approaches, which is why estimates vary, explained Dipanjan Chatterjee, an analyst with Forrester Research Inc. However, several analysts and agencies agree that the company’s brand has already suffered a significant blow since Musk’s takeover. For example, Brand Finance estimates that the Twitter brand has lost 32% of its value since last year.
As the perception of Twitter’s brand has shifted, advertisers have fled. Musk’s controversial behavior and support of rule-breaking tweeters have raised concerns among advertisers. Musk himself has stated that advertising revenue at Twitter has dropped more than 50% since October.
“Twitter’s corporate brand is already heavily intertwined with Musk’s personal brand, with or without the name X, and much of Twitter’s established brand reputation has already been lost among users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.
From a business and brand standpoint, it’s “completely irrational,” said Allen Adamson, co-founder of the marketing and brand consulting group Metaforce. He called it an “ego decision” on Musk’s part. “To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever.”
There’s also risk to Musk’s future goals. Building banking and payments into the app will require customer trust — something that’s difficult to establish with a brand-new product name. “I just think that customers outside of Musk’s sort of core fan base would really struggle to use Twitter to exchange their money,” added Vanderbilt’s White.
One advantage working in Musk’s favor is “The Elon brand,” according to Irwin. “His personal brand might be more powerful than the Twitter brand.”
With assistance from Karen Breslau.
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