Advertisers were already skeptical about Twitter. Will ‘X’ rebrand make things worse?

Linda Yaccarino, the company’s chief executive officer and ad industry veteran who took the post last month, tweeted on Monday morning: “Lights. Camera. X!” alongside an image of a blue ‘X’ logo projected on the facade of the company’s San Francisco headquarters.

The rebrand underscores Musk’s ongoing efforts to revamp the platform‘s business model. It follows months of chaos at the company, including aggressive cost-cutting measures, significant layoffs and the loosening of content moderation policies – moves that have alienated top advertisers and tanked the app’s revenue.

However, experts predict that the new name and look are unlikely to help fortify the company’s bottom line, which has suffered significant losses in the wake of Musk’s acquisition due largely to a drop in ad spend, which has historically been the company’s biggest revenue-driver.

Musk confirmed earlier this month that the platform’s ad revenue has nearly halved, despite saying in April that “almost all” advertisers had returned. Major spenders, including Unilever, Coca-Cola, Merck, Chevrolet and Chipotle, have stopped advertising on the app in light of brand safety concerns.

• ‘An appalling instinct for branding’: designers react to Twitter’s ‘X’ rebrand

Brand equity: the baby in the bath water

Leaders in the media buying and advertising space suggest that, with the rebrand, Musk is forfeiting a key asset: the platform’s brand equity and ubiquity. It’s a decision that could hurt the company’s chances of success.

“There’s a lot to be said for brand equity – Twitter’s reputation and recognizability weren’t created overnight,” says Becci Salmon, a design director at IPG-owned ad agency FCB London. “Twitter, tweets, tweeting – it’s all part of the vernacular, a familiarity that’s been built up over 17 years. [Musk is] ripping down a brand that’s been a cornerstone of social media … my gut reaction was that this is something only a billionaire on an ego trip would do.”

Others have flagged the same concern. Ben Parr, a journalist and entrepreneur who helms the AI firm Octane AI, tweeted: “Something tells me destroying 15 years of brand equity is a bad business decision.”

Something tells me destroying 15 years of brand equity is a bad business decision. pic.twitter.com/2fuHMbUXUP

— Ben Parr (@benparr) July 23, 2023

A Muskian move of ‘X’-cess?

But the new name and design should perhaps not come as a surprise. In 1999, Musk co-founded the fintech company X.com – which eventually became PayPal. The entrepreneur then acquired the domain X.com from PayPal in 2017, saying it held “great sentimental value” to him. And it’s easy to see the X motif across Musk’s various endeavors – he heads spacecraft manufacturer SpaceX as well as electric vehicle company Tesla, the flagship product of which is the Model X. Not to mention he has a son with Canadian musician Grimes named X AE A-XII. In April, Twitter alerted partners that it would begin operating at a corporate level under the new name X Corp, though the company’s app would still be called Twitter for some time.

From a design perspective, however, the platform’s new X logo was conceived and rolled out hastily; Musk took to the app late on Saturday to solicit design ideas from users. He reportedly selected one of the submissions and quickly replaced his profile picture with the chosen logo. However, some users have discovered that the new logo appears to be a standard X unicode character pulled from a widely-available typeface, Monotype’s Special Alphabets 4. If true, this would mean the company cannot copyright the logo. It’s also unclear whether or not Musk acquired the appropriate licensing requirements to use the font as the company’s new logo.

Though Musk has said in replies to users that the logo “probably changes later” or will “be refined,” it has been a divisive decision no less. Some users have lauded the change as “cool,” while others have derided it as unoriginal and bad for the brand.

For her part, Salmon believes that “for what it is, it works,” as the forward slash and backslash-like elements of the X “nod back to being a tech company.”

Other media leaders, however, are not so generous in their assessments. “The new logo seems to reveal a surprising lack of understanding about deep-rooted human realities. While the idea of a fresh logo might sound appealing, it is akin to applying a Band-Aid to an opportunity that requires more than superficial treatment,” says Sue Daun, executive creative director at Interbrand. Daun argues that a truly effective rebrand demands more foundational-level changes to the company’s vision and values. The platform would do well, she says, to “seize this opportunity to manifest genuine brand leadership” and work to repair tensions among users and advertisers and “unite individuals more effectively.”

The making of an ‘everything app’ could spell the death of ad spend

At any rate, a new vision and direction is precisely what some experts believe Musk is working toward. In fact, it may have been a long time coming. Before he even acquired Twitter last fall, Musk met with Twitter employees where he suggested that he was interested in replicating WeChat, an app owned by China’s Tencent that includes social media, messaging and mobile payment capabilities. In early October, he tweeted, “Buying Twitter is an accelerant to creating X, the everything app.”

One critical distinction of WeChat is that, unlike many popular social media platforms, its business model isn’t overly-reliant on advertising. Much of its revenue is generated via payment processing fees and ancillary services such as gaming and e-commerce.

Musk has already made a significant push to diversify Twitter’s revenue streams and shift away from advertising. In particular, he overhauled the platform’s verification system and instituted a pay-to-play subscription model that gives users a swath of perks – and a once-coveted blue checkmark – for a monthly fee. All the while, however, the company has continued to bleed ad revenue.

But some believe the rebrand will help accelerate Musk’s vision. “It’s tempting to see this rebrand as another example of mismanagement: so much brand equity down the toilet,” says Chris Chapman, creative director of design at ad agency Adam&EveDDB. “But Musk has been saying he has plans to create something new, and X is presumably intended to stand for a new offering that includes much more than tweeting. Maybe a rebrand was necessary.”

Not everyone is so confident. Becky Owen, a Meta alum and global chief marketing officer at influencer agency Billion Dollar Boy, agrees that the company “needed a facelift” due largely to its profitability being “under significant pressure.” However, she estimates the rebrand could do more harm than good. A key concern: further ostracizing the platform’s traditionally loyal user base. “These users have already become disillusioned with the platform under the new ownership after a suite of updates rendered the user experience almost unrecognizable,” she tells The Drum. “The rebrand, as we understand it today, will only further push these users away – a dangerous move, especially in such economically choppy waters, with more and more sharks circling for blood.”

Owen admits that the rebrand may be just the first step toward realizing Musk’s vision for an “everything app,” which could potentially add value and woo users and advertisers. But, as it stands, “there is little substance yet to how it might look and feel different to already available platform models within a crowded social media landscape.” In short: neither users nor brands have evidence that X will offer anything new.

To orchestrate a real change, Owen says, would require more than a makeover. “This is likely only to have limited success in reassuring brands and convincing them to invest again in the platform. The root cause of the problem remains the new leadership itself, which has overseen some controversial and deeply unpopular platform updates – including a relaxation of the platform’s content moderation policies. The perception is now baked in that, under this ownership, Twitter is an unstable platform with uncertainty for ad investment and plenty of brand safety risks.”

Andrew Graham, founder and head of strategy at Bread & Law, a New York-based PR firm, goes further. He suggests that the decision to rebrand indicates that Musk has entirely abandoned his efforts to re-engage advertisers. “If Musk’s new gambit is to fully pivot the company to become an ‘everything app’ for consumers as opposed to an ad-driven social media platform, then that’s probably for the best because it would eliminate the charade that the company is trying to woo advertisers back.”

As it stands, Graham says, the rebrand has not revealed any sign of a renewed focus on brand safety or congeniality toward advertisers. “Musk is no longer pretending to care about brand advertisers; he’s focusing instead on building his ‘everything app.’ And that really can’t go any worse for him than his stint owning a social network.”

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