Marketing faculty Michael Myers analyzes each platform’s strategic decisions—and the implications they could have
Summertime brought a shakeup to the social media landscape. For months, Twitter had weathered instability and confusion—caused by new corporate ownership, changes to its verification system and limits to how much content users could view. In July, Twitter’s new CEO, Elon Musk, announced the platform’s signature blue bird logo was no more. In its place stood a single letter: X.
Around the same time, social media giant Meta launched a rival platform, Threads. Within weeks, more than 100 million users flocked to this new place for text updates, which looked pretty darn similar to its rival.
To make sense of a tumultuous summer, the Daniels College of Business Newsroom turned to Michael Myers, academic director for the Denver MBA and a teaching associate professor in the Department of Marketing. In an interview, he explained what makes a successful rebrand, and how well each company followed the blueprint.
Let’s start with the rebrand of Twitter into X. What was the thinking behind this? And what are some of the benefits and risks of changing something that’s so established?
I think Elon’s goal was to make it his own and so a rebrand, in his mind, made sense. He’s been very fond of the X name throughout his professional career. I think he realizes that he’s lost Twitter’s core audience, so maybe he wants to create a [new] audience, one that’s all about free speech. But there are several examples of him saying, “Free speech is great as long as it’s free speech that I like.”
When a company makes such a big rebrand decision—changing a name that is ingrained in the global lexicon—what should be considered?
You need to think about how it’s received by your original community. What’s the message with the X? I get a reinvention, I do, but, from my perspective, you tore down everything that you had and are building something new. Twitter’s primary strength was an information network first and a social network second. But there was community. There were tech-savvy business people and business-savvy tech people. And those people love the platform. Especially if a brand is tied to a community, you need to think about the impact of that rebrand on that community. I don’t think that that was weighed or considered.
I feel like people have been getting turned off for a while now, whether it was Twitter taking away the checkmarks for verified users, the rollout of Twitter Blue or throttling of how much you could read.
Well, and you probably know this, but the reason that those view limits happened in throttling is because Twitter wasn’t paying its Google Cloud bill. So they had to cut back a whole bunch. I mean, Elon, if anything, is an operations person and a product person, but losing money is losing money. And I know that half their advertisers went away within the first month or two [of his ascent to CEO]. And honestly, it doesn’t necessarily have to do with Elon’s long-term personal brand. It has more to do with his recent personal branding.
During all of this change, Facebook, or Meta, launched a competitor, Threads—some say before it was fully baked. What do you think the strategy was here?
I think the strategy was, “I want to capture that core market: business-savvy tech people and tech-savvy business people. Get those people on board, maybe some celebrities as well and the primary users.” I know at one point 80% of the content was created by 20% of the user base. Most people are just [re-sharing]. They’re not adding content. But Twitter’s audience and Facebook’s audience aren’t necessarily the same.
If Walmart is going to open up a high-end store with amazing clothing that costs thousands of dollars, you’re not going to get many people there. So I think the gut reaction is: Wow, this thing that’s happening over here to something that I love is making me very frustrated, so I’ll go try this out. But I think I heard that Threads’ usage went down 70% after two weeks. It’s this quick adoption, you check it out, but it’s not habitual. And it sure sure isn’t loyal.
And I was reading about people who are unhappy with Threads, went on to check it out and then found out that if you wanted to deactivate your Threads, you also had to deactivate your Instagram. Meta linked them together.
I have to tell you, that kind of weaseliness does not [play well]. Anytime you try anything like that, it feels very old school, like buying a used car. [Consumers do not want to] be pressured into anything. Facebook’s ad numbers are way up; Meta is very, very happy. But that trick does not go over well in an on-demand medium.
So do you think Meta went about this the wrong way? And does this have implications to hurt its brands beyond Threads?
I think that Meta’s brand is already pretty damaged with the privacy issues, the Metaverse, etc. Will this hurt them long term? I don’t think so. I think Facebook, Meta, whatever you want to call it, is large enough that its impact over time [will be diminished]. It’s got almost 3 billion users worldwide and a massive amount of active users every day. They’re not impenetrable, but they’re also not really in danger.
I wonder if both of these companies feel like they’re playing with house money. You know, the idea of: Consumers hate them and have been hating them for years, but we still use them because our lives are there.
For sure. I think last time I heard it was about 70% of adults in United States use Facebook. That’s a huge stat. I think what’s interesting about this rebrand is that Elon’s personal brand interacted and kind of collided with what was going on. And he’s actually admitted, “By the way, the only reason I bought this in the end is because I thought they were going to make me buy it.” So it’s not like he’s on some kind of mission.
And so I think this isn’t your standard rebrand, because you have his personal brand riding shotgun. That’s what turned off the core audience, which is primarily liberal, and [doesn’t like that Elon is] saying things that offend them. “And you want us to use your toys and buy your cars?” So all of a sudden it was like, “Oh, wait a minute. Rivians (a Tesla rival) are nice.” The undercurrent of all this is what a personal brand is doing to this effort.
What do you see as the final result? How does all of this play out and who, if anyone, wins in this battle?
Twitter’s market value is now less than half what it was. I don’t think that core audience is going to come back unless Elon or anyone he’s selected are not involved in the day-to-day decisions. I know that Jack Dorsey, one of the three original creators of Twitter, stood something up as a competitor because he wants that original audience. I think it’s a lesson that CEOs, leaders of companies are being watched and can help derail the success of a company, even if it’s an established company, not just a rebrand.
What’s interesting is that user behavior has changed from text to visual things. So if your thing is not primarily a visual medium, you’re already in an uphill battle because, yes, people can read, but is that the majority of content online? No. It’s video—increasingly live video—and images. That niche is already kind of filled [with Instagram]. As a matter of fact, when the description of X came out, it sounded a lot like just the internet. It’s going to be this and it’s going to be this, and it’s going to be this. A successful product usually picks a very thin slice and does it very, very well.
I don’t think it’s wise to bet against [Elon], but if [X] is successful, it’s not going to be the same audience. That audience has moved on to Reddit (and Reddit users are very angry now and standing up Discord servers in place of their subreddits). Slack communities have grown because people like [what it can offer].