X Set to Cause Billions in Brand Losses for Twitter

It is uncommon for corporate brands to become so deeply embedded in everyday conversations that they transform into verbs. Even more unusual is when the owner of such a brand publicly declares their intention to deliberately dismantle it.

On Sunday, in the middle of a quiet summer weekend, Elon Musk ordered that Twitter’s brand name be changed to “X” and that he ditch the bird logo and all associated words, including “tweet.” Analysts and brand agencies estimate that Musk’s move destroyed $4 billion to $20 billion in value.

“It took more than 15 years to earn that much equity globally, so losing Twitter as a brand name is a significant financial hit,” said Steve Susi, director of brand communications at Siegel & Gale.

Musk, whose company’s value has already fallen significantly since he bought 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 on the site. New CEO Linda Yaccarino outlined the company’s vision for X to become a site for voice, video, messaging, payments and banking.

Analysts and brand agencies call renaming the product a mistake. Twitter is one of the best-known social media brands, says Todd Irwin, founder of brand agency Fazer. Bird stickers adorn small businesses and websites worldwide, along with Instagram and Facebook logos.

Twitter’s popularity has also made verbs like “tweet” and “retweet” part of modern culture, regularly used to explain how celebrities, politicians and others communicate with the public, said Joshua White, associate professor of finance at Vanderbilt University.

X requires the company to rebuild this cultural appeal and linguistic consensus from scratch. But that may be part of the motivation, so users stop comparing Twitter after the takeover to what it was before. “It’s an extraordinarily rare thing – in life or 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 rebranding was so spontaneous that the city of San Francisco asked the crane operator to stop removing the letters, leaving only the “er”. “Twitter or X never proactively notified or inquired with the city about the sign removal/updates, so it is on hold until the Planning Department provides direction to the Building Inspection Department,” a spokesperson for Mayor London Breed said in a statement.

Other tech companies have rebranded themselves in recent years. Google became Alphabet Inc. to allow the company’s various businesses to grow without being tied to search. Facebook changed to Meta Platforms Inc. to emphasize the company’s commitment to the metaverse. But the names of the products remained; we still google things by going to Google.

It’s worth a lot. Twitter’s brand value is estimated at around $4 billion, according to Brand Finance, a brand valuation consultancy. The company 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, comparable to Snapchat.

Brand equity is difficult to determine and there is no one-size-fits-all approach, which is why estimates vary, said Dipanjan Chatterjee, an analyst at Forrester Research Inc. However, several analysts and agencies agreed that the company’s brand has already taken a significant hit since Musk’s takeover. For example, Brand Finance estimates that the Twitter brand has lost 32 percent of its value over the past year.

As the perception of Twitter’s brand has changed, advertisers have fled. Advertisers were concerned about Musk’s treatment of controversy and his embrace of tweets that broke content rules. Twitter’s advertising revenue has dropped more than 50 percent since October, Musk has said.

“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 at Insider Intelligence.

It’s “completely irrational from a business and brand perspective,” said Allen Adamson, founder of marketing and brand consulting group Metaforce. He called it an “ego decision” on Musk’s part. “For me, it will go down in history as one of the fastest-dissolving companies and brands of all time.”

Musk’s future goals are also at risk. Adding banking and payments to the app requires customer trust – which is hard to get with a brand new brand name. “I just think that customers outside of Musk’s kind of core fan base are really going to have a hard time using Twitter to exchange their money,” Vanderbilt’s White said.

One thing is working in Musk’s favor: “The Elon brand,” Irwin said. “His personal brand may be more powerful than his Twitter brand.”