Twitter may have lost $4 billion to $20 billion in brand value

Medium & Message

31 July 2023 – 15:41

With information from Ad Age and Bloomberg

It’s rare that corporate brands become so popular that they spawn verbs. And it is even rarer that the owner of such a powerful brand has plans to destroy it.

The other Sunday, the 23rd, on a quiet summer weekend in the Northern Hemisphere, AIon Musk has decided that Twitter’s name will change to Xand that it will get rid of the bird logo and all words associated with it, including the verb “tweet.”

According to agencies and brand analysts, this action by Elon Musk wiped US$4 billion to US$20 billion from the company’s value.

“It took more than 15 years for me to acquire so much wealth in the world. So losing the Twitter brand is a significant financial blow,” said Steve Susi, director of communications and branding at Siegel & Gale.

Musk, whose company has fallen significantly in value since he bought it in October for $44 billion, announced the rebranding on Saturday night.

Our headquarters in San Francisco tonight pic.twitter.com/VQO2NoX9Tz

— Elon Musk (@elonmusk) July 29, 2023

On Sunday, the new “X” logo, in black, designed by a fan of the company, began to appear on the social network. ONE Company CEO Linda Yaccarino outlined the company’s vision about X, which would be an app that would add audio, video, messaging, payments and banking.

Brand analysts and international organizations consider rebranding a mistake. Twitter is one of the most recognizable brands on social media, according to Todd Irwin, founder of branding company Fazer. Images of the bird adorn small businesses and websites around the world, along with the logos of Facebook and Instagram.

Twitter’s popularity has also spawned verbs like “tweet” and “retweet,” parts of modern culture, regularly used by celebrities, politicians and other public communicators, according to Joshua White, assistant professor of economics at Vanderbilt University.

X will require the company to rebuild that cultural attraction and linguistic consensus from the ground up. But that may be part of the incentive for users to stop comparing the social network to what Twitter was before the acquisition. “It’s an extremely rare occasion – in life or in business – that you get a second chance to make another great impression,” tweeted Linda Yaccarino.

Other tech companies have also changed their names in recent years. Google became Alphabet Inc, to support different businesses beyond the Search service. Facebook became Meta Platforms Inc. to highlight the company’s commitment to the metaverse. But product names have stuck: people are still looking for things by searching on Google.

And that’s worth a lot. Twitter’s brand value is estimated at $4 billion, according to Brand Finance. Facebook’s brand value is $59 billion and Instagram’s is $47.4 billion. Vanderbilt University estimates Twitter’s brand value to be between $15 billion and $20 billion, comparable to Snapchat.

Branding is difficult to define and there is no one-size-fits-all approach. That’s why estimates vary, according to Dipanjan Chatterjee, an analyst at Forrester Research Inc. But analysts at many companies agree that the platform’s branding has had a significant impact since Musk took over.

Brand Finance, for example, estimates that Twitter has lost 32% of its brand value since last year.
As the perception of Twitter’s brand has changed, advertisers have fled. Brands were concerned about Musk’s controversial actions and how he appeared to encourage tweets that violate content rules. Twitter’s ad revenue has fallen 50% since October, according to Elon Musk.

“Twitter’s corporate brand is already heavily intertwined with Musk’s personal brand, with or without the X name, and much of Twitter’s established brand value has already been lost among users and advertisers,” said Jasmine Enberg , analyst at Insider. Intelligence.

“It makes absolutely no business and brand sense,” said Allen Adamson, co-founder of marketing and branding consultancy Metaforce. He calls the move an “ego decision” by Musk. “For me, it will go down in history as one of the fastest growing businesses and brands of all time,” he believes.

There are also risks to Musk’s future goals. Integrating banking and payment services into the app requires trust from customers – something that is difficult to achieve with a completely new product. “I think customers outside of Musk’s fan base will have a hard time using Twitter for financial transactions,” Valderbilt said.

One thing Elon Musk has going for him”: the Elon brand, according to Irwin. “Your personal brand can be stronger than Twitter’s,” he concluded.