Will Twitter’s X rebrand have an impact on how advertisers view the platform?

Brand identity is important, and Twitter is definitely a recognized brand, but X doesn’t have the same weight, which could be a factor in determining ad spend.

Certainly, X itself seems aware of a shift in perception, as it’s making a big push to win back ad partners, and highlight the benefits of X ads.

The official X handles, and Elon Musk, have taken to amplifying ad campaigns in the app, boosting their reach and exposure, which could be another way for X to enhance the value of its ad offerings.

But they can’t retweet (there’s no X equivalent for retweet yet) every campaign, and based on the latest moves from the company, its ad intake is still well-down, despite Elon’s recent assurances that July performance was improving.

This week, X Corp has been pitching 50% discounts to ad partners in a bid to keep them aligned to the app, while it’s also threatening to remove official checkmarks from brands that don’t keep up their regular X as spend.

As reported by The Wall Street Journal, X representatives have been meeting with ad partners in the U.S. and U.K. to share new opportunities, as it works to maintain relationships with big brands.

As per WSJ:

“X this week began offering some advertisers reduced pricing on video ads that run alongside a list of trending topics in X’s ‘Explore’ tab […] It’s offering 50% off any new bookings of those ads until July 31, among other discounts. ‘The goal of these discounts is to help our advertisers gain reach during crucial moments on Twitter such as the Women’s World Cup,’ one of the emails read.”

So ostensibly, these new discounts are designed to showcase the value of the platform during major events, like the Women’s World Cup, but they also reflect the declining state of Twitter’s ad business, with Twitter’s total ad revenue intake still down 50% year-over-year, according to Elon’s most recent statements.

That ‘debt load’ relates to the $13 billion in bank loans that Musk took on as part of his $44 billion acquisition of the company, which saddles Twitter with an extra $1.5 billion per year in interest payments, and continues to rise in alignment with market rates. And because Musk has loaded that debt into the company, it’s the business that absorbs this debt, not Musk himself.  

In other words, Twitter not only needs to get back to its regular revenue intake to break even, it also needs to significantly improve on that, due to the increased debt burden, and despite Musk cutting 80% of staff, it’s still not close to this as yet.

Will the X rebrand help in this respect? Probably not, but it’s also been Musk’s vision for more than 20 years that he would one day create an ‘everything app’, which he remains confident will be profitable.

Another part of that push is its new verification offering, and X building its income stream via subscriptions. That’s still a minor element, bringing in only a fraction of the company’s ad intake, but as noted, X representatives are also looking to pressure brands to keep up ad spend, under threat of losing their verification marker in the app.

Brands that spend over $1,000 per month on X ads get a gold Verification for Organizations checkmark by default, but X is now threatening to remove it if they don’t keep up that spend, which could put them at risk of impersonation in the app.

Which smells like extortion, but X maintains that this is an anti-scam measure, designed to keep brands safe in the app.

I mean, the previous verification system effectively then offered the same, free of charge for businesses, but nevertheless, the X team remains confident that through its expanded verification push, and developing ad approach, it can get back to even footing, at some stage, before taking the platform to new heights.

It’s a tough road, and a big task for new Twitter CEO Linda Yaccarino, who’s now tasked with selling X. But maybe, there’s more to the plan that we don’t see as yet, and there will be a way for Twitter to return to viability.

But if it doesn’t, the X experiment could be short-lived.