According to analysts and brand agencies, Twitter, recently renamed to “X”, will lose between $4 billion and $20 billion in value.
Background
On Saturday night, owner Elon Musk announced the change and said that he is also getting rid of the bird logo and all the associated words, including “tweet.”
By Monday morning, a new black “X” logo began to appear across the site.
CEO Linda Yaccarino spoke about the company’s vision for X to become a site for audio, video, messaging, payments and banking.
Identity
Analysts and brand agencies called the massive change a mistake.
Twitter is one of the most recognizable social media platforms and the bird logo is attached to most brand accounts, alongside Instagram and Facebook logos.
“It took 15-plus years to earn that much equity worldwide, so losing Twitter as a brand name is a significant financial hit,” said Steve Susi, director of brand communication at Siegel & Gale.
Cultural significance
Twitter is one of the very few names, like Google, to become part of everyday lingo.
Verbs like “tweet” and “retweet” have become part of modern culture. These are activities celebrities, politicians and others participate in to communicate with the public.
X will require the company to rebuild its cultural identity from the ground up to get the public used to it, if at all it is possible.
Brand value
Twitter’s brand value is estimated at about $4 billion, according to Brand Finance, and has already declined significantly in value since he purchased it for $44 billion in October.
Although the method to determine brand value is difficult with no single approach, the consensus is that X’s brand has already taken damage since Musk’s takeover.
Brand Finance Estimates a loss of 32% of its value since last year.
Advertisers
Along with the loss of brand value, advertisers have also quit the platform amid concerns of Musk’s penchant for controversy and leniency towards users who broke content rules.
“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 equity has already been lost among users and advertisers,” said Jasmine Enberg, an analyst with Insider Intelligence.
Advertising revenue at Twitter is down more than 50% since October, Musk has said himself.
Dumb decision
It’s “completely irrational from a business and brand point of view,” said Allen Adamson, co-founder of the marketing and brand consulting group Metaforce.
It appears to be an “ego decision” on the part of Musk.
“To me, it’s going to go down in history as one of the fastest unwinding of a business and brand ever”, commented Adamson.
It will also hurt chances of building banking and payments into the app, one of Musk’s future goals, to take off.
It will require and depend on customer trust, which is lacking outside of his core fan base.
