Whether an X is better than a blue bird remains to be seen. For now, it can be said that Elon Musk’s strategy of changing the name of Twitter will entail a high economic cost.
According to the consultancy Brand Finance, Twitter would have an estimated value of 4,000 million dollars (more than 3,600 million euros). Another study cited by Bloomberg from Vanderbilt University raises the number of Twitter to a higher range, between 15,000 and 20,000 million dollars. A money that Elon Musk has erased with a stroke of the pen by launching the new logo, called X.
In the case of Twitter, we find ourselves with a brand that has been consolidated for 17 years, to the point that the expression tweeting is already part of the RAE as current vocabulary. It is something that branding specialists describe as vulgarization: when a brand becomes so strong to the point that it becomes part of the common jargon (it also happens, for example, with Kleenex).
Elon Musk is now betting everything on an X. But it takes a long time to build a brand until it is trusted and recognizable by consumers. And this letter of the alphabet “could only be registered as a trademark if it was proven that the logo had a distinctive capacity,” says lawyer David Muñoz, a partner at RMA. The problem is that in the EU alone there are almost 20,000 registered logos that evoke an X shape.
Not only does this run the risk of confusing the consumer with the name (think Microsoft’s Xbox), but it can also lead to lengthy and expensive lawsuits for trademark infringement (in the US there are even 900 companies that have registered the X).
That it is a risky bet is recognized by the same company. “It’s very rare in business life to get a second chance to make another great impression,” admitted Twitter (or X) CEO Linda Yaccarino, commenting on the new strategy.
Why then risk killing the bluebird? Brand Finance had calculated that since last year it had lost 32% of its price. The reason: “Musk has overlooked one of the most important values ??for a brand: people. Twitter has problems when it comes to its reputation”, justified Brand Finance at the time. A fall that was also reflected in advertising revenue, which since October fell by 50%.
Also blamed for Musk’s eccentricities, the reality is that the Twitter brand was in the doldrums. “It has never entered the Best Global Brands ranking (the 100 most valuable brands in the world), prepared by Interbrand, especially due to the difficulty that the platform has always had to achieve profitability,” Carolina Aishemberg, director, reminds this newspaper. Interbrand Growth Associate.
Getting rid of the bird is the first step on a new path, because Elon Musk plans to make Twitter something totally different. X is intended to be an application that offers a wide range of services, an ecosystem that, “powered by AI, will connect us all in ways we are only beginning to imagine,” according to Yaccarino. “Therefore, we are talking about an important turn in the business strategy to expand it far beyond its main business. If we start from this base, then the name change is justified”, indicates Aishemberg.
In this sense, this expert believes that the strategic shift makes sense if we analyze the strategy followed by the strongest brands in the world today: instead of creating a product and then branding it, building the brand, they put the brand first and, subsequently, they build an integrated ecosystem of products and services around it. The example of this new paradigm is Apple: the power of its brand is what has allowed the company to expand its reach towards new services (entertainment, health, finance, etc.).
“Taking into account the personal style with which Musk has built his career, X is still the mark of his own imprint, a simple symbol with which he aspires to identify everything he develops (as is the case with the i of so many products from Apple). And the original Twitter, deep down, was not his creation ”, they point out from Interbrand. “In the end, Elon Musk’s personal brand turns out to be much more powerful than Twitter itself,” ironized Todd Irwin, from the Fazer agency. Neither X, nor blue birds. The brand is him.