(Bloomberg) — Corporate brands rarely intertwine with everyday conversations so that they become action. It is still rare for the owner of such a trademark to announce plans to deliberately destroy it.
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On Sunday, in the middle of a quiet summer vacation, Elon Musk decreed that Twitter’s product name would be changed to an “X,” and that it would get rid of the bird logo and all associated words, including “tweet.” Musk’s move wiped out between $4 billion and $20 billion in value, according to analysts and branding agencies.
“It took more than 15 years to gain this much worldwide share, so losing Twitter as a brand name is a huge financial blow,” said Steve Susi, director of brand communication at Siegel & Gale.
Musk, whose company has already plummeted in value since buying it for $44 billion in October, announced the change Saturday night. By Monday morning, a new black “X” logo, designed by a fan over the weekend, began appearing across the site. New CEO Linda Iaccarino outlines the company’s vision for X to become a site for voice, video, messaging, payments and banking.
Analysts and branding agencies call product rebranding a mistake. Todd Irwin, founder of branding agency Fazer, said that Twitter is one of the most popular brands on social media. Bird stickers adorn small businesses and websites around the world, along with Instagram and Facebook logos.
The popularity of Twitter has made verbs like “tweet” and “retweet” part of modern culture, said Joshua White, a professor of finance at Vanderbilt University, used regularly to explain how celebrities, politicians and others communicate with the public.
X will require the company to rebuild this cultural attraction and language consensus from scratch. But that may be part of the motivation, so users stop comparing the post-takeover of Twitter to what it was before. “It’s very rare – in life or in business – that you get a second chance to make another big impression,” Iaccarino wrote on Twitter.
Other tech companies have rebranded themselves in recent years. Google turned to Alphabet Inc. To allow the different businesses within the company to grow without being restricted by search. Facebook changed to Meta Platforms Inc. In order to confirm the company’s commitment to Metaverse. But the product names remained; We still google things by going to google.
This is worth a lot. The Twitter brand is valued at around $4 billion, according to brand valuation consulting firm Brand Finance. The company values the Facebook brand at $59 billion and Instagram at $47.4 billion. Vanderbilt University values the Twitter brand at $15 billion to $20 billion, which is comparable to Snapchat.
Brand valuation is difficult to quantify, and there is no one-size-fits-all approach, which is why estimations vary, said Dipanjan Chatterjee, an analyst with Forrester Research Inc. But many analysts and agencies agree that the company’s brand has already taken a hit since Musk’s acquisition. For example, Brand Finance estimates that the Twitter brand has lost 32% of its value since last year.
As the concept of the Twitter brand changed, advertisers fled. Advertisers were worried about Musk courting controversy and embracing tweeters who broke content rules. Musk said that ad revenue on Twitter has fallen by more than 50% since October.
“Twitter’s brand is already heavily overlapped with Musk’s personal brand, with or without the name X, and a lot of brand equity has been lost on Twitter between users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.
“It’s completely inconsequential from a business and brand standpoint,” said Allen Adamson, co-founder of marketing and branding advisory group Metaforce. Call it an “ego decision” on Musk’s part. “For me, it will go down in history as one of the fastest business and brand breakups ever.”
There is also a risk to Musk’s future goals. Building banking and payments into an app will require customer trust — something that’s hard to come by with an entirely new product name. “I just think customers outside of Musk’s core fan base are going to really struggle to use Twitter to trade their money,” Vanderbilt’s White said.
One thing works for Musk, Irwin said: “the Elon brand.” “His personal brand may be stronger than Twitter’s.”
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